What Took so Long? After Years of Brick & Mortar Meltdown Punctuated by the Pandemic, Two Mall REITs File for Bankruptcy

CBL and Pennsylvania Real Estate Investment Trust were both toast long before the Pandemic. The banks are stuck.

By Wolf Richter for WOLF STREET.

Two publicly traded mall landlords filed for bankruptcy on Sunday: CBL & Associates Properties and Pennsylvania Real Estate Investment Trust. Long before the filing, the shares of these REITs were reduced to near-nothing, and CBL’s unsecured bonds were totally trashed in 2019.

CBL Properties, which owns 107 properties with a total of 66.7 million square feet of space, in 26 states, announced this morning that “CBL & Associates Properties, Inc., CBL & Associates Limited Partnership (the “Operating Partnership”), and certain other related entities” had filed for Chapter 11 bankruptcy. On its balance sheet as of June 30, it lists total debt of $3.8 billion.

The REIT specializes in B and C malls, many of them serving less affluent areas. Its tenants have been closing stores for years, and CBL was a basket case before the Pandemic. During the Pandemic, the process of years was compressed into a few months, and some of its tenants that hadn’t already filed for bankruptcy then filed for bankruptcy, with  massive store closures, including Ascena Group (Dressbarn, shut down in December, Ann Taylor, LOFT, Lou & Grey, Lane Bryant, Cacique, Catherines, and Justice) and J.C. Penney.

CBL’s bankruptcy filing was well telegraphed. On June 5, CBL issued a “going concern” warning after it failed to make an interest payment on one of its unsecured notes. It then entered into a forbearance agreement with the “noteholders,” which kicked off discussions on restructuring this debt. On July 17, there were reports that CBL was preparing to file for bankruptcy. On July 22, CBL disclosed that it was able to extend the forbearance period as negotiations continued with the noteholders.  On August 18, it entered into a Restructuring Support Agreement (the “RSA”) with some of the noteholders.

Today, CBL said that noteholders representing over 62% of the principal amount of $1.37 billion of the three unsecured notes, due in 2023, 2024, and 2026, entered into the restructuring agreement. And now the company will seek to implement this restructuring agreement in bankruptcy court. These unsecured notes are all trading today in the range of 36 cents on the dollar.

The price of these notes had been dropping since 2017 when it became obvious that the brick-and-mortar meltdown was hitting CBL. In early 2019, they started collapsing. By the end of 2019, before the Pandemic hit, they were trading at 20 cents on the dollar as CBL’s fate – a default and bankruptcy filing – appeared sealed. Here are the 4.6% notes, due October 2024:

CBL expects that it will emerge from bankruptcy with $1.5 billion less in unsecured debt and preferred obligations, with noteholders getting equity in the restructured company, and with some debt maturities getting extended.

Negotiations with lenders over CBL’s secured credit facility are continuing, CBL said today, “in an effort to reach a tri-party consensual agreement between the Company, noteholders and credit facility lenders during the bankruptcy process.”

Shedding $1.5 billion of its debts will relieve the company of some of its debt burden – though it doesn’t reopen the shuttered stores on its properties. Current shareholders are left out in the cold and will likely end up with nothing or nearly nothing.

Trading in its shares [CBL] was halted this morning, but after trading resumed, shares plunged and are now down 40%, trading at 9 cents, giving the company a market capitalization of $18 million, having plunged from nearly-nothing all the way to next-to-nothing.

Pennsylvania Real Estate Investment Trust, the largest mall landlord in Philadelphia with 22.5 million square feet of retail space, including 19 malls, and $1.8 billion in debt at the end of Q2, announced on Sunday that it filed for a “prepackaged” Chapter 11 bankruptcy, under which it “will be recapitalized and its debt maturities extended.” Negotiations with its bank lenders had been going on for a while, and in October, the company announced that it had entered into a Restructuring Support Agreement with them.

As part of the agreement, the banks have committed to an additional $150 million in new loans, extend the debt maturities of existing loans, and modify other aspects of the loans. The company said that 95% of the creditors agreed to the restructuring agreement. Vendors, suppliers, and employees will be paid during the bankruptcy proceedings, and the pre-bankruptcy petition claims of its “suppliers and other trade creditors and business partners will be unimpaired,” the company said. So, if the court approves, everyone will get paid.

For shareholders, nothing will change, PREIT said, and it expects its common and preferred shares “to continue to trade in the normal course.” But they have already gotten mostly wiped out by the brick-and-mortar meltdown long before the Pandemic: For PREIT, 2020 will be at least the sixth year in a row of net losses.

Back in 2017, PREIT’s shares [PEI] were still trading in the $17 range. In February, before the Pandemic, they were in the $3.70 range. At the moment, they’re at 48 cents. The only surprising thing is how long companies can drag this out.

The banks are stuck. Clearly, the banks don’t want to clutter their balance sheet with a bunch of mall properties dotted with closed stores, shuttered movie theaters, and bankrupt tenants. Better to lend another $150 million, extend the dates when the loans are due, and pretend everything is just fine, while hoping for a miraculous solution to the brick-and-mortar meltdown.

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  152 comments for “What Took so Long? After Years of Brick & Mortar Meltdown Punctuated by the Pandemic, Two Mall REITs File for Bankruptcy

  1. Concerned American says:

    We live in an extend and pretend world these days.

    • 2banana says:

      Well, from the above, not anymore for some.

    • Trinacria says:

      Yes, even though it’s a “mell of a hess” out there.

      • BuySome says:

        Good one. In more poetic license…this line from about two years ago, still on a post-it but never expanded, which sums up where we have now arrived, “Thinly vieled shells of their former selves”. This one the final line of a long and lost poem of jibberish in rhythm written some 15 years before Beck put the same style to music, and predicting all of what was coming even if we couldn’t see the date, “Urbanotes in zygotes form the bed of shellfish canning”.

    • Old School says:

      If anyone doesn’t think we are in a fed bubble just look at the Walmart chart back to it’s ipo. You can see the bubble burst around 2000 and then stock took about 11 years to recover. I can only imagine when it bursts this time, unless the Fed does some kind of magic.

      • Lisa_Hooker says:

        It is not magic, it is simple slight-of-hand. And not particularly well done.

    • M says:

      More and more malls and real estate holding companies will follow these into bankruptcy. Note that does not mean that they will dissolve but their shareholders will lose everything or nearly everything.

  2. Tony22 says:

    Bulldoze ’em Dano!

    That is one thing that would help to restore what’s left of main street family owned businesses, and to employ the larger number of local people than these malls ever did.

    • Seneca’s Cliff says:

      Bulldoze em and turn me back in to sheep pastures and potato fields. We will need more food close to population centers as the dollar peters out.

      • Trailer Trash says:

        That will have to be very high-dollar lamb chops and gold-plated potatoes to pay the restoration costs. Corn at $3.50 a bushel ain’t gonna do it.

        With all the rich people escaping the cities, there will be no one left to buy $15 a pound chicken, and no business case for doing anything with the malls. Instead they will look like a trip on Amtrak’s Lake Shore Limited – miles and miles of industrial wasteland.

        The malls will have to be bulldozed (and then abandoned) to keep out the homeless. Everything must be done to make their lives miserable so they will go someplace else.

      • economicminor says:

        Ever hear of hydroponics and Aquaponics? Good food and lots of it can be produced in those old malls. Putting lots of locals to work. I even could envision a type of farm to table community.

        • Trailer Trash says:

          Every look at the cost of light, heat, humidity control, and pest control? The price of the food produced under electric light is far beyond what regular folks can pay. Media reports on indoor growing studiously ignore the economics. It’s almost like the reports are actually marketing…

        • economicminor says:

          You don’t need a lot of heat and the lights can be very efficient LED with the right spectrum.

          As for the cost, I guess if you don’t have to count the cost of global warming in the production of the chemicals and fertilizers or the cost of shipping from a continent away, then it might be more expensive still. I think the time is coming when it won’t be.

        • M says:

          Amen. That is probably the future, whether in malls or more likely, in cheaper real estate that is away from the centers of cities.

          Also, the cost of electricity can be met either with solar cells that then power the lights for the plants or alternatively as to some malls, lighting for the plants can be obtained by piping in daylight in malls where creating some holes in the roofs will not damage their structural soundness. Fertilizer can be generated from local waste, at least composted waste.

    • Harvey Mushman says:

      No don’t Bulldoze them… Turn them into gigantic indoor Go Cart race tracks!

      (electric go carts)

      • wiley says:

        Sounds good!Also climbingwalls,hydroponic greenhouses,circus style workout area,affordable housing,indoor bike/rollerblade track,microbiz,organic garden,catshelter,minimanagerie,minimuseum-niche/weird stuff,chairmassagers,stimuli deprivation tanks.

      • BuySome says:

        Multi-level bumper car tracks. Going fast in circles gets boring too soon. Smashing into things and visiting new doctors is endless fun. See the ball, be the ball, nananana.

    • Javert Chip says:


      Before waxing all nostalgic about small-town mom & pop retail and the good ‘ole (pre-WalMart) days, the cold reality is those stores:

      o Wages were even less than WalMart (or whatever boogeyman you wish to demonize)
      o Few paid any benefits
      o Inventory was sketchy
      o Customer service was sketchy
      o Prices were higher

      There is a reason most mom & pop stores were decimated like a hot knife thru butter (not sure this rhetorical flourish actually makes logical sense, but you get the drift).

      • Minutes says:

        I’m sorry what? You mean if you actual outsource labor to monkeys via taking down coconuts that main street will suffer. Notice Costco stopped the sale of those products. How dare you act as if main street was ever the problem in this country.

        • Javert Chip says:


          The gifts of melodramatic virtue signaling and difficulty understanding an English sentence have led you to divine mysteries about monkeys & coconuts, and accuse me of “…act[ing] as if main street was ever the problem…”.

          I simply stated he underlying facts resulting in American consumers quickly & vigorously switching to shopping at WalMart (et al). Your problem is with literally hundreds of millions those consumers, not me.

          At the risk of being judgmental, I’d guess monkeys (and coconuts) are no more impressed with self-proclaimed moral superiority and a demonstrated inability to understand simple English sentences than I am.

      • Seneca’s Cliff says:

        When I was a kid I lived in a middle class neighborhood in SW Portland in the 60’s. It was walking distance to a small “village” shopping area. On my street alone there was a family that owned the drug store, one that owned the sporting goods store, one that owned the hobby shop and another that had a pancake house. They all had respectable houses, a station wagon and tree forts in the back yard. Now even the manager at the Walmart is lucky to live in a trailer park. With a society like that we put a man on the moon, now not so much. There is more to a strong country and strong middle class than low prices.

        • Chase metz says:

          Deténte then WTO; Just like my parents they tried hard to not buy Japanese and I have done the same with Vietnamese. I wonder if today’s Gen Z will realize that the CCP just won WW3 and act accordingly.

        • Zantetsu says:

          Chase, the Japanese make good products and they need jobs too. I am happy to buy their stuff when it is better than anything else I can find. It’s why I always buy Japanese cars.

        • MCH says:

          They didn’t so much win as all of their opponents surrendered due to the need to ensure a flow of the mighty dollar, euro, pound, etc into the coffee of private companies that then go on a stock buyback binge

        • Paulo says:

          Excellent comment Seneca, and so true.

          My favourite example is the kid I grew up with on mid Vancouver Island. His Dad was the appliance and furniture manager of a small department store. (Eatons, located in an old three story wooden building on the main drag). They had a small house, had a car, and the mom stayed home while the kids were little, as least as long as I knew them). This was lat ’60s -1970). Now, Eatons has been shuttered for 20-30 years and Lord knows what happened to the family. And, the family that owned the hardware store lived down the street from me. Home Depot sells washers and dryers and we know what they pay their staff and how poor the ‘associates’ knowledge base is about what they flog.

          We are going to buy a new stove this year. The one we have is at least 50 years old. Will probably use Costco (.ca) as their products are usually pretty good and their staff is union. The local furniture/appliance stores are still small chains and two of them are family owned sweat shops.

        • wkevinw says:

          The retail and other “derivative” businesses thrived off of the material wealth created by processing and manufacturing of tangible goods. This created some high income working class people who purchased retail items at “fair” (higher) prices than today.

          Look at the real price of most manufactured appliances today. Those prices are much lower.

          Other items, like shelter, medical care and higher education also drain retail spending power from the working class.

          It’s pretty simple.

          Bring back basic manufacturing (and “processing” industries), and you will have a better economy.

          Establishment elites of neither major political party want that.

        • economicminor says:

          The government actually had a progressive tax system where the top income earners and big corporations actually paid taxes back then.

        • Clete says:

          Just FYI: the store manager at a Walmart earns about $180K/year.

        • Trinacria says:

          Seneca: that is exactly my experience and that of my wife. She grew up in SE Portland near Reed College/Woodstock area. Her dad had a grocery store. Once Fred Meyer started opening up on Sundays, it was all done hill from then. I was born in Italy and came to the US when I was two. I remember in the early 60’s a place called MacArthur Park on Wilshire Blvd. just west of downtown LA (LA was actually livable)….the place was pristine and I have pictures to prove it !!! We used to roll on the lawns as kids, the lake had paddleboats, flower beds carefully attended to, etc. In summer of 1963 moved back to Italy (my dad had business there to wind down), then we moved back to LA in 1966 ….went to MacArthur Park (my parents liked it) and in that short of time it had been destroyed. My parents were shocked -never went back. Pretty much tells the story. Now places like Amazon will finish the job. But folks keep anesthetizing themselves by shopping into oblivion. This is biblical if you ask me, which is why I say gird your loins.

        • roddy6667 says:

          The manager at a larger Walmart makes about $150,000 a year.

      • otishertz says:

        Wrong, in so many ways.

        Walmart subsidizes its wages with welfare. Walmart wages are sub poverty level and they pay no benefits unless you are management. . People made a living in small town mom and pop retail for a couple hundred years.

        Inventory was the entire business in retail before ecommerce began renting out their shelves, so to speak. Brick and mortar retail operations were called stores because things were stored there for local use. The new paradigm is amazon ebay and the like renting out their virtual shelf space and taking on no inventory risk.

        All part and parcel of the so called “tech” business where they really are just internet intermediaries that make money by monetizing the efforts and assets of their suppliers and “employees” while skimming off the top.

        I don’t know about you but at a big box hardware store compared to a neighborhood ace hardware I’m sure to find a greater diversity in offerings at the local store – as well as bins where I can by screws by the pound.

        Customer service was weaponized by wal mart. It was very difficult to compete with their return policy. For years, they would take anything back on return no questions asked. This was because of the leverage they had over their suppliers. Wal mart could force their suppliers to take everything and anything back on return. Funny how those liberal return policies vanished when all the local shops were dead in the water.

        Low prices always = low quality always. For every penny shaved off in price there is a corresponding loss in value and quality. With wal mart mass merchandising, prices went down but at the cost of quality. So, you get a disposable society filled with cheap plastic cartoons pretending to be real things.

        • economicminor says:

          In my small town there was a hardware/lumber store that would order you anything you wanted from weird replacement parts for tools to special siding. There was a Sears Catalogue store where you could order anything Sears sold and not pay shipping. Now I just go on line and order what ever I want and it is delivered to my door. The world has changed and then changed again. What’s next, replicators like on the Star Ship Enterprise?

          I have No idea what the world will be like in another 50 years.

        • Lisa_Hooker says:

          Small screws were never sold from bins. Nails were sold by the pound from bins. Screws were in boxes. My hardware store would sell individual screws from one open box they kept for that purpose. One store in a neighboring town (every town had a hardware store) did have some carriage bolts and lag bolts (screws) in bins.

      • Sit23 says:

        Can one American please use the word decimate in it’s correct sense; i.e., to take out each tenth one. We all know that every tenth mom and pop store was not closed, so your instinct was correct about your rhetorical flourish.

        • LoneCoyote says:

          The definition of words changes as their usage changes over time. If you’re mad about ‘decimate’ being used that way, better take it up with Oxford Dictionary, who lists the first definition as “Kill, destroy, or remove a large percentage of.” (The ‘remove 1/10’ is listed second as the ‘historical’ definition.)

        • It's its says:

          Only if you use the word “its” correctly, which you didn’t

      • Petunia says:


        I consider myself an experienced shopper. All the best stuff I’ve purchased has been at mom & pop shops and mostly off the beaten track. Two of my favorite boutiques of all time were in Scranton, PA. My favorite shopping street was Main Street in Philadelphia and the shops on the Mainline and New Hope are remembered fondly . This is considering that I am a born and bred NYC girl.

        There are some malls I still like, in spite of the extremely bad service, they include, Bal Harbor and Valley Forge.

      • Clete says:

        A friend of mine in the advertising business said years ago: “Walmart didn’t kill downtown. Closing at 5:00 killed downtown.” What he means is that Walmart won because of convenience as well as price.

      • Russell says:

        I agree with you completely. My sister-in-law is always railing about Wal-Mart, yet she owns a small boutique, pays her employees minimum wage with no benefits or heathcare. It’s easy to judge others when you don’t have any morals yourself. Catering to the well-off makes you think you are better than others like them, I guess.

  3. Yort says:

    “What took so long” (time), you asked? Well let me give you my nerd thesis, all dorked up for your audiences amusement.

    If the Fed prints infinite free money, is not the natural order of future capitalism somewhat impossible to predict, as the future relies on our perception of time. I simply cannot logically compute how printing infinite free money works on a long-term time scale, as it removes the time value of money from our system of order and thus stability. From what I have read, everything we define as our “existence” is simply energy, vibrational energy to be exact, down to the smallest particles we can currently can define. Even time itself is thought to be a vibration concept that does not exist on a universal scale according to Carlo Rovelli, who wrote “The order of Time”. “Time” is sort of a perception that humans are forced to exist within due to our inability to absorb the entire universe at once in its entirety (we are simply data limited to the extreme). My question is what happens to human order, on a macro “time” scale, when we attempt to remove the temporal reality of our perceptive existence?

    Perhaps it is only a matter of “Time”…

    • Intelligent yet idiot says:

      Time is there to make sure not everything happens at once.

    • andy says:

      Time clearly exists outside of human mind. And therefore isn’t just a perception.

    • andy says:

      And as far as manifestation of vibrational energy we clearly did not get much past philosophers from a millennia ago.

    • Stephen C. says:

      If a person perceived Time on the universal level, his mind would in a way explode, and cease to function in all the normal ways. At very least one who actually experienced this sort of enlightenment, instead of just thinking about it, would stop caring about working but would go out preaching the word.

      Hence why others on this site predict a collapse in production and functioning of society if there is no time value of money for an extended period of . . .

      Your thesis on Time is not “alternative” or quirky. My Great Courses professor from Caltech says much the same as you do, Yort.

    • Crush the Peasants! says:

      As people live longer and longer, shouldn’t interest rates go down? If you lived forever and ageless, would you care when your loan was repaid?

      • economicminor says:

        When a loan is repaid is sort of irrelevant isn’t it? As there is the asset and that is what matters.. Not the loan. The loan only matters to the one who wants that asset and only can obtain it by borrowing from future labor/income. If you can obtain that asset with no extra cost as in interest on that loan, then the only cost/risk is that the asset wears out and is depreciated in value. Thus the length of the loan should not be longer than the useful life of the asset.

        So we’ve reached a point where assets, as in cars or washing machines, etc., can be produced in such large quantities beyond the ability of those with incomes to consume them, that the banks are basically giving you your future income to just consume them with no appreciable interest costs added. All the while the numbers of persons who have such incomes are also declining.

        Times when there is a huge and still growing disparity in incomes which are dependent upon the working class buying what they can’t afford has its limits.

        Seems to me a dilemma that has a Time Horizon. Suggesting a contraction in production at some point OR more income for the working class who right now are considered marginal workers.

    • Engin-ear says:

      – “If the Fed prints infinite free money”

      Is it infinite? It’s big money, but in no way infinite in the context of our finite planet.

      It it free? Nothing is free. The debt contracting may be free, but the debt rolling – unlikely.

      • Old School says:

        A simple question deserves a simple answer? Zombie businesses were propped up for 5 -10 years longer than necessary by the Fed.

        • Engin-ear says:

          Tell this to the Japanese.

          “Zombie firms have long been associated with Japan’s lost decades. Initially identified in the late 1990s and early 2000s by journalists who labeled prominent overleveraged firms like Yamaichi Securities and Daiei as “zombies” (Henry, 1997; Wehrfritz and Takayama, 2002), zombie firms became a distinct topic of academic study in the 2000s,…”

      • Yort says:

        Engin-ear – I’m assuming you have a science background, and understand what a non-linear finite element analysis entails. In simple terms, it is a “simulation”. Another example would be a video game, again a “simulation”. What the Fed is running right now is a financial “simulation”. And as with any simulation, the input constraints and various mathematical input equations and variables determine if the simulation is “infinite” or finite. I would say the Fed has set up an “infinite simulation”, extremely non-linear and unpredictable in nature. Why? Because the Treasury in theory can buy unlimited Fed debt until the end of time, as long as the parties involved can fool the world forever (because they have created a electronic fiat currency simulation). At some point there will be constraint inputs that could very well crash the simulation, yet that could take years or lifetimes for that matter. The Fed is hellbent on certain input variables such as higher inflation. Like any simulation, the system can be pushed beyond the constraints and crash in the process. A FEA analysis can run for days or weeks to only crash suddenly and without warning. The Fed simulation could very well act in a similar way. And at that point, “The Great Reset” will need to happen, but unfortunately it will not be as easy as pushing the computer reset button. I wish the Fed “luck” as the simulation they are attempting is well beyond the intellectual limits of a mere 1,000 PhD economists (or 100,000 PhDs IMO), as economics is not as absolute as real science, and the data inputs are delayed, manipulated, and horribly lacking. The hopium they are smoking unfortunately could have a lot of unpredictable human consequences. The global central banks, IMHO, are the most dangerous organazations on the Earth. If the Feds ends up “nuking” the entire global financial system, the fallout could last decades. What we have right now is a financial Manhattan project “simulation”, that is being skewed by politics, and lacking the most brilliant minds on Earth as was theh case with the original Manhattan Project. That is deeply concerning, even perhaps why the super wealthy intellects are attempting to escape the planet in their shiny billionaire rocket ships, so they can build their own “Elysium” in space…HA

        • Lisa_Hooker says:

          Non-linear functions are a bitch to integrate. Some can’t be. Your mileage varies. Non-linear FEA models only survive by artificial constraints selected by the modeler. Dividing by zero is hard. So is using infinity in an exponent. I’ve always had an affection for analog computers – they are directly connected to reality. (I still have a 20″ K&E analog computer. ;-)

        • Engin-ear says:

          Many interesting points.

          We’ll certainly come to it later.

          The story – told by Wolf – is about two significant RE companies with unprofitable operations and sinking business model. They ran out of cash and credit, so they initiated a 30% haircut request. Wolf thinks that the banks were unwilling to recognise toxic assets earlier for a very clear rational motive.

          What was not discussed – the actions of the FED, the Bank of banks.

          Whatever mathematical model the FED uses, it has some uncertai

        • Yort says:

          Lisa – I once ran two SGI (Silicon Graphics Incorporated) computers at the same time, each one costing about $150,000 each (the simulations ran for daysto weeks). After a few years I was able to overclock and unlock high end consumer grade hardware and build my own mini “super-computer” for around $25k, yet had to pirate the software for a few years as it was $80k at the time…(yes, not all companies start out glorious…ha). Yet once “out-sourced” Chinese PhD engineers started billing 10-15x less per hour than my going rate (and doing somewhat excellent FEA), the gig was over quickly. Yet forced change has worked well for me as I usually jump into something even more enjoyable, which oddly usually ends up more profitable in the process. And yes, I do remember “fixing” the models in space to keep them from moving, yet the fix point became critical to the analysis and somewhat difficult to mimic reality at times. I’ve read some of your posts and knew you had some sort of math/science/physics/engineering background. “Geeks” have trouble hiding their past…regards…=)

  4. A says:

    Extend, pretend, then run to the FED money printer when the problem becomes “too big to fail”

    There’s no Innovation in America, no capitalism in America, just the socialism of the FED and the billionaires. The rest of us are just roadkill.

    • Jonas Grimm says:

      I’m so sick of people calling this insanity socialism. It’s CRONYISM. It’s quid pro quo. It’s legal bribery. It is only socialism by technicality.

      • IdahoPotato says:

        It’s Corporate Socialism.

      • Trailer Trash says:

        We are living under a criminal conspiracy, as in RICO: Racketeer-Influenced Corrupt Organizations. When Dear Leaders talk and sound like gangsters, that’s because they are.

      • Jdog says:

        No, it is socialism.
        At the point where government gives special privileges and advantage to one group as it does by issuing a corporate charter, and the legal, regulatory, and tax advantages that go with that, they have socialized business.
        The taxpayers are subsidizing business, and exempting them from laws that pertain to everyone else.
        You either have free markets where everyone is treated equally under the law, or you have socialism where government intervenes to give advantages to some. Those are the only two options.

      • Absur Ditty says:


        YES! SOCIALISM! I am inspired by socialism because life is/was so much better in the pure socialist country of . . .

        hmm, help me out here, which country does or did socialism right?

      • roddy6667 says:

        Rule by a partnership between government and a few big corporations is called fascism.

    • MonkeyBusiness says:

      A bit much saying there’s no innovation. Our tech giants invented plenty. They are not the kinds I want though. I’d rather have things like the Japanese automatic bidet.

      We supposedly lead the world in high tech, but you just don’t feel it around the house, the city, anywhere.

      • Don says:

        “Our tech giants invented plenty.” Our tech giants imported the best and brightest brains from places like India and China to do the inventing. The typical American would rather scrub toilets then do anything sciency.

        We may think that we are some kind of tech super power, but without the constant importation of foreign brains our tech industry would collapse. If Chinese scientist and engineers decide to stay in China, and not come to the U.S. then U.S. tech will suffer greatly.

        • MonkeyBusiness says:

          I disagree it’s just the Indians and the Chinese. I work in tech and there’s plenty of Americans able to do hardware/software work at a high level. The real problem is management/VC. Their specialty seems to be inventing the next “Great” Peeping Tom app/platform.

          Honestly, there’s not a single day that I don’t feel like quitting.

        • Zantetsu says:

          Don you apparently know *NOTHING* about high tech development. The Indian and Chinese engineers and developers brought over on H1B do not “do the inventing”. They do the dirty and unpleasant and mundane work. I’m talking about industry here.

          In academia there is a lot of foreign participation because of the sheer number of people from the Asian continent who flood into American institutions of higher learning. You’d expect that given that they outnumber Americans 4:1 though wouldn’t you?

          But you clearly weren’t talking about academia since you said “our tech giants”.

          Of course there are *some* people of every race and nationality that have contributed to corporate innovation, don’t get me wrong. But you certainly spin it completely opposite of reality when you make the blanket statement that “our tech giants imported the best and brightest brains from places like India and China to do the inventing”.

        • Zantetsu says:

          Don you don’t happen to be from the midwest or Florida or something do you? Because that’s the kind of stuff I hear from the ill informed and willingly ignorant like my dad (who lives in Florida).

        • Petunia says:


          All the innovation you think came from India and China actually came from ATT, Bell Labs, Western Electric, and their sub contractors. It was the atrocious management all of these companies that allowed others to ensconce it.

          Silicon Valley should be renamed Poseurville.

        • Zantetsu says:

          Petunia you also have no clue. The companies you mention haven’t been producing innovations since the 1960s and 1970s.

          It’s very true that they were the hotbeds of tech research four decades ago. But not much since then.

        • Petunia says:


          You think google and twitter are innovation? You are the one who doesn’t have a clue.

        • Anthony A. says:

          ……………”You think google and twitter are innovation? You are the one who doesn’t have a clue.”

          Exactly! Anyone in the world could live a full life without those two ever being around. Just remember, when the power is shut off, so are they.

      • Stephen Cavaliere says:

        Shopper’s alert. Last week I saw Toto brand bidets at Costco in Novato (Northern California.) I nearly bought one but need to watch a Youtube first to see if I can hook it up with my outdated apartment house plumbing. Perhaps you can find them at other locations or online.

        • MonkeyBusiness says:

          People have been buying them from Amazon as well. But honestly, the ones in Japanese homes are the best. There’s all sorts of integration with the water system that makes them eco friendly.

          Then there’s the whole intercom + water system + alarm system integration. The intercom allows you to see visitors through a screen, but wait, it also tells you if there’s a water leak!! and if there’s a fire, you can use the intercom to alert your neighbors.

          Add to that, a console in the bathroom that would allow you to use a specialized A/C unit to dry your clothes indoor as well as control the temperature in your bathtub.

          These are only some of the tech available in a regular Japanese house.

          Meanwhile, in America we get Alexa and all sorts of stupid “tech”, and people buy them in droves just to get a giggle or two. WTF.

          So what if they are not as cool as self driving cars, or VRs, they make daily life more comfortable.

        • Zantetsu says:

          Hey MoneyBusiness, your examples are stupid. Alexa is very useful. I suppose you don’t have one, and are just commenting based on your personal bias against certain types of technology.

        • MCH says:

          Alexa is a fun toy if you want to devote time to it. At this point I have all three of the major VAs at home, and Alexa is the most useful by virtue of the fact it got there first, and Siri kind of was cool until you realize Apple hadn’t devoted any real effort to it.

        • Paulo says:

          Meanwhile, In Canada real men pee outside. Considerate men light a match.

          Bidets? Even if they hot dry and act as surveillance and fire wardens I just have to ask, can you sit on one and finish your book?

          Alexa is creepy. My sister talks to Alexa….it was a horrifying experience for me. :-) This is a World our family chooses to avoid.

        • Tbone says:

          Wife and I got a. “biobidet”.
          40$ no power or heat we love it will never go back.
          10 min install

        • Lisa_Hooker says:

          We had a power failure and the bidet died. When I called Edison they said 2-3 days, so I’ll try to not shit for a few days. Wish we had an old fashioned Thomas Crapper. Must have some TP stashed around here somewhere.

      • Brant Lee says:

        Tech has to monopolize to stay in business. When was the last time you got excited about anything from Microsoft? An operating system, cloud, Xbox. Woo. Who can’t produce an operating system these days?

        Google controls search and advertising with Control being the company advantage . Where’s the value in the tech?

        Facebook controls social media. Anything innovative comes up, they buy it.

        Amazon controls online shopping. Their biggest advantage is the gigantic shipping discounts and buying power compared to small business. Search for a product online, Amazon comes up even before the product website itself. See Google, above.

        Apple is innovative with superior products, yes. But the world is catching up.

        Tesla. Write your own.

      • Don says:

        This is a reply to all the responses that are in agreement with you, and think that America is some intellectual powerhouse. First of all I’m not talking about the H1B visa holders. Nor am I talking about the people creating the latest and greatest app. I’m talking about the academics, and the kind of people that brought you the internet.
        May claims are based on several factors. First I’ve worked with chinese researchers. Second, I’ve gone through a lot of english language research paper from china. If you feel motivated go to Google Scholar and look for research on electric motors; I think that you will be surprised how much of it comes from China, and how little comes from the U.S.

        But my personal experience is only part of the reason that I feel that the U.S. is not the tech superpower that it thinks it is. There is some kind of annual survey of high school students from around the world. And in the areas of math and science, China ranks at the very top, while the U.S scores below every industrialized country in the world. In the U.S., calculus is considered to be a college topic, and only “the best and brightest” of our students will take calculus in high school. But in much of the industrialized world calculus is a high school topic, and basic calculus is not even offered at the university level. And it’s not just high school, the very same trend continues at the university level.

        • Lisa_Hooker says:

          Engineering degree = hard work, continual learning absolutely necessary, adequate compensation.

          Finance degree = hard work, Rolodex, retire young.

          What path do you suggest your kids follow?

    • wiley says:

      Necessity is the mother of invention!There is invention,but it may not reach scale due to lack of mentoring.Apps are inventions,but we need tangible,everyday inventions at scale.Bring on the tinkershops!!

      • Old School says:

        Seems like a lot of these phone apps are just the tithing model where they insert themselves between the consumer and the service provider and take a cut. Hit the button on your phone to find a carpenter, plumber, take out food, an apartment, insurance. Dave Ramsey uses that as ‘an endorsed local provider’. It’s America and people can have nearly any kind of business they want, but I try never to do business with these skimming operations.

    • Javert Chip says:


      Plainly, you’re looking for love in all the wrong places:

      o You REALLY want to go back to watching 1980s style TV?
      o Are you typing on your smart phone or laptop?
      o Are you using a 4G or 5G network?
      o Did you know in about 25 years telecomm bandwidth has gone from 52kbs to gigabytes?
      o Do you realize there have already been 3-4 (capitalist) roll-outs & obsolescence of major telecomm technologies?
      o Are you aware there a 3 organizations (NASA, SpaceX, Blue Origin) competing to go to the moon & Mars, and NASA might not be first to get there?
      o Are you aware some darn nice EVs (eg: Tesla) cost less than the average new car?
      o Are you aware wave after wave of new commercial jet engines massively reduce fuel/seat-mile consumption?
      o Are you unaware automation will very soon massively replace $15/hr burger-flippers (talk about capitalism in action)?

      You need to get out of the basement more often. That thing following you around is your shadow – it won’t hurt you.

      • Stuart says:

        “$15 burger flippers” ? I defy you to name one place that pays that.

        • Wolf Richter says:


          $15.59 is the minimum wage — “living wage”– in San Francisco and some other cities in California and maybe elsewhere.

        • MCH says:

          In and Out.

        • Javert Chip says:


          YOU SAID: “$15 burger flippers” ? I defy you to name one place that pays that.

          MY RESPONSE: San Francisco, NYC, Seattle & undoubtedly unknown others (I hope you feel sufficiently defied).

        • BuySome says:

          MCH-close, but read the old version bumper sticker. Properly altered, the full name is “In ‘n Out XurgeX”. [Could not resist the historical footnote. I detest corporate white-washing.]

      • VintageVNvet says:

        nice start as usual jc,
        but THE most clear and happy signal of the advancement of all of WE the PEEDONS ( thanks, Unamused) is the availability of music:
        Just think for a minute how many people were able to hear Bach, Mozart, Beethoven, etc., not to mention Scarlatti, Chopin, etc., etc., etc., when they made the most beautiful music of their day…
        And now compare that very very very limited number with those people who can hear whatever music they think is the best today.
        Of course our species has advanced in almost every metric, if not every single reasonable measure;
        when and if we are able to take the local and global social and maybe spiritual steps to take the next step is the question.
        If so, we advance physics and other physical sciences and congruent understanding of where we are and what needs to be done to take the next step(s).
        If so, something like ”gravity mirror” to supply unlimited energy!
        If no, 1850 here we come, or maybe even 1815 when wind was the way of most efficient world travel, far better than walking.

      • Lisa_Hooker says:

        $20/hour minimum wage. Just wait a few years. I say $150/hour. Let the poor enjoy themselves, if only for a little while.

    • Stuart says:

      “Socialism of the Fed” ? I think you meant socialism for the rich and capitalism for the poor.

    • Mira says:

      The trick is how to get money out of the government coffers legitimately ..
      In Australia money is fed into .. example: a public hospital, in the front door, divided at the kitchen table & out the back door via private pockets.
      Welfare / charity / community transport / medical health facilities ..
      Not Socialism .. theft.

  5. 2banana says:

    Until the Robinhood zombies kick in.

    Then it’s back above $10 for a few hours.

    “Back in 2017, PREIT’s shares [PEI] were still trading in the $17 range. In February, before the Pandemic, they were in the $3.70 range. At the moment, they’re at 48 cents. The only surprising thing is how long companies can drag this out.”

  6. cas127 says:

    Well, at least the CBL unsecureds had that mighty 4.6 coupon to compensate them for a risk that started to capsize, what…maybe 3 years after issuance?

    In the late 90’s, 1 yr T Bills (zero default risk), yielded 5%.

    That is a measure of how manipulated/crippled the US economy has become from 2000 on.

    Junk bonds able to get T Bill rates…and still going BK.

  7. George W says:

    The last 90 year cycle was marked by the 1929 stock market crash that ushered in the great depression.

    Today’s 90 year cycle has not seen a stock market crash as many had expected but rather the work from home malaise.

    Entire industries are being wiped out as the WFH crowd cheers on their own destruction.

    • Cas127 says:

      WFH really means WFA…work from anywhere.

      It is hard to see where greater flexibility is a bad thing…except for a handful of elephantine metros that, largely through historical accident, ended up with a superabundance of corporate HQs and the highest paying jobs.

      • George W says:

        The WFA tent cities, supporting extinct industries continue to grow.

      • Old School says:

        I believe that most innovation comes in a crisis. Probably going to be a lot of permanent societal changes from this pandemic. Overall society is going to be materially poorer from lost production and resources diverted to dealing with the health costs. Election is going to determine to some degree who is going to shoulder the cost.

        Read interesting article by Andrew McCarthy that if election is close it’s going to come down to supreme court ruling on if ballots that arrive after polls close in pennsylvania will be counted or not. Seems like there was a complicated penn legislative agreement that supreme court is going to have to rule on. Ballots are being segregated to those that arrive before and after election. Hopefully it will not come to this as elections decided by supreme court will cause heartburn.

        • Mira says:

          Health costs ??
          We are told “Oh God .. Oh God .. healthcare is so unaffordable . don’t even bother.
          Nothing could be further from the truth .. HEALTHCARE both private & public is a most lucrative business ..
          IF YOU WANT TO WORK .. If not it is so easy to bludge off the system & that is why it does not work.
          Why work for a salary when you can steal it.

    • andy says:

      They say it’s not the 1929 crash that ushered in the depression (majority of people were never in stocks). But the banks going under in the next 2-3 years wiped out all of the savings regular people had.

      • Trailer Trash says:

        The crash lit the debt deflation conflagration. “Everybody” was buying stock on margin and the margin calls led to forced liquidation and drove prices to zero.

        Lack of cash depressed agricultural commodity prices and forced liquidation of the tenant farmers and crashed land prices. No problem for the big land companies that consolidated their holdings and replaced most of the farmers and horses with tractors.

        Debts that can’t be paid won’t be paid, and leads to debt deflation and “liquidate everything” [1]. This is what scares the Fed more than anything.

        [1] “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.” — Secretary of the Treasury Andrew Mellon

        • jm says:

          But Hoover did not take Mellon’s advice.
          He did the opposite. Murray Rothbard made plausible argumens that if he had taken Mellon’s advice the economy would have recovered sooner. We’ll never know whether he was right.

    • Jdog says:

      Covid is killing the weak. Not just people, but everything. Weak businesses, weak business models, weak investments and investors, weak performers of all kinds.
      This is a cleansing process. When it is all over, we will restart with a stronger foundation.

      • Lisa_Hooker says:

        I’d like to think that. But, I’m quite sure that we will restart with bank loans to well-connected people.

  8. edmondo says:

    The mention of Pennsylvania REIT rang a bell.

    These are the geniuses who sold a mall in NJ for $13 million – ten years after they had purchased it for $263 million . Wouldn’t you want your retirement savings tied up with this bunch?


    • Wolf Richter says:

      Yes, they got rid of some of their zombie malls — and that costs a lot. But likely the mortgage lender (CMBS) ate the difference.

  9. Bailing out 80-year-old billionaires doesn’t help;
    it’s a moral hazard.

    Tragedy of the Commons.

    • HowNow says:

      The NFL is an example of one “industry group” that has tried to front-run the effects of Tragedy of the Commons. They created their draft to distribute talent, they’ve created salary caps for that purpose, the rules of the game control the use of technology, their ownership and player behavior is factored in… It’s kind of a model of what an enlightened capitalism might look like, highly but cooperatively regulated, but with a moral component (decent behavior by both players and owners). Too bad the owners are typically billionaires with ill-gotten gain.

  10. Dan says:

    Questions that come to mind include:
    1. What will happen to the space? If not retail then what? ?Residential, ?Self Storage, ?Office.
    2. Will the property be maintained, to prevent mold, mildew, vandalism, homeless occupancy, security issues, insurance, utilities, insurance, real estate taxes etc. Will a bankruptcy attorney make sure those are paid for if there are insufficient funds going forward. Obviously court costs and attorney fees are probably the first claim.
    3. If no one buys the property to repurpose them, then government taking possession for back taxes can take years. And then government puts the property up for sale,??????
    4. Movie theatres and restaurants will some day return, so some of the property could be used for that; since pretty soon there will be enough self-storage space for every American, maybe they can build more in these properties and rent them out to aliens from other galaxies.

    • lenert says:

      You can search the world wide web for Abandoned Malls.

    • Javert Chip says:


      Call me crazy, but I long for the old Dave Letterman show, when he threw stuff (ie: watermelons, TVs) off of buildings (and other sophisticated physics experiments).

      Anyhow, I’d easily pay $100 to toss a watermelon off the Empire State Building; I think tens of thousands of others would too.

      Hell, I’d also pay to stand around the bottom just to hear melons smack into the street.

      • Zantetsu says:

        Javert, you probably wouldn’t though. If they let people pay to do that, enough people would have done it already and there’d be so many videos of the results that doing it wouldn’t even be novel. So by the time you got a chance to do it, you’d already be bored with the concept and wouldn’t bother.

        • Javert Chip says:

          Well, you could claim the same about sex, and obviously, that’s not true.

          I’m afraid I really would pay $100 to lob a watermelon off the Empire State Building. I know it’s a primitive emotion, but I had the same overwhelming feeling when visiting Dubai’s Burj Khalifa.

        • Brant Lee says:

          Before there was a barrier, people used to threaten to jump off the Space Needle, sometimes did. A crowd would gather below cheering them on. But maybe the main reason for the barrier were the watermelons, I don’t know.

  11. Dano says:

    Years ago I knew a senior mgmt person at Nordstrom’s. We were walking thru a mall snd I look at him snd said “How do all these small shops stay alive?” His answer was “beats me…”

    Now I wonder how even Nordstrom’s stays alive.

    • BuySome says:

      The execs put on white suits and dance to the Bee Gees of course! Not sure about those platform shoes coming back though.

  12. Earl says:

    People! this is capitalism! This is what capitalism does! This has been going on since the early 1800’s when capitalism and the first industrial revolution kicked off?! But, it is much more real when it happens to you personally, and not read in a book in economics class at school. And with computers and coming of AI and the alogo’s! lol get ready this is getting ready to go into overdrive! Creative destruction! Zuckerberg’s I want to “disrupt”
    The paid for economists tell us this just makes us stronger and better. Cleans out the weak!

    • Old School says:

      The Cary, NC mall is being demolished and a huge mixed use development is going in with some retail. It’s a good location and population growth is high. In that environment maybe a 30 – 40 year life for a mall was a good run. A lot changes in that period of time.

  13. Aussie Andy says:

    Big mortgage gone bad, might be time for a good old breakup and let the little guys/gals have a go.Manage local rather than from NY or wherever the big corporate is based.

  14. lenert says:

    What’s worse – abandoned mall or a mall?

  15. Len says:

    Waiting anxiously to see what’s happening in Paulo’s neck-of-the-woods

    • Zantetsu says:

      I mean hasn’t he already told us 100 times already?

      • Zant says:

        Here, I’ll write it for you:

        “Out here on Vancouver Island we have a local mall that went under. My brother in law had a shop there but he made out anyway because he managed to sell at the right time and retire to a comfortable lot near the shore. He invested in Canadian timber production which has been great for him since it’s so superior to American timber production.

        That’s all fine with me because I’m just canning the pumpkin that I grew in my greenhouse, I never bothered with malls anyway, I prefer to get my hands dirty and build my own shopping center every time I need to shop. Just can’t understand why other people live the way they do when it’s so much more fulfilling to own a house bought on Vancover Island 20 years ago when prices were cheap and retire early on the backs of millennials.”

        • Zantetsu says:

          You gonna reject me Wolf? It’s just (mostly) good-natured ribbing, honest.

        • Wolf Richter says:

          You changed your login by forgetting to add the second part of your alias — it’s like a new account. Typo or artistic variation?

        • lenert says:

          With all due respect, Paulo, fellow Northwesterner, Zant nails it.

        • Tom Pfotzer says:

          Zant / Zanetsu – that was great.

          Paulo, don’t let up. First they ignore you, then they mock you, then they fight you, then you win.

          They’re already on Stage Two, and it’s only been what….five years you’ve been messaging here @ WS?

          And for those complaining about the WFHers abetting the demise of mall and office building, may I offer my regrets if you invested in physical plant at the end of its life-cycle and became an unwitting bag-holder. That has happened to the best of investors.

          Mnuchin gutted Sears to sell its real-estate to bag-holders and made a bundle. That told me volumes.

          I remember a few decades back when I was sitting among the local chamber of commerce luminaries (/sarc) many of whom were high-tech communications folk, and I said that WFH was coming, and continued infrastructure devel (roads serving office and malls) was not well-advised…

          You can guess their reaction.

          They went on to ram massive projects including huge Metro investments through. Thr rug got pulled out from under those huge, 100-year-lifespan facilities at about year …. three.

          Taxpayers and REIT investors are holding the bag now. The developers and political operatives long ago “left the building”.

          I hope more of us somehow get the blinkers off in a timely way. I don’t want to be bag-holder for stranded assets any more than you do.

        • Anthony A. says:

          Zant, that post made my day!

          We all know everything in Canada is better than in the U.S. My Canadian neighbors a few house up the street always remind me of that,

        • Yertrippin says:

          While accurate to a degree, to Paulo’s credit he is at least aware of the changes and speaks to the difficulties facing those not as fortunate as himself.

          His narratives may be nostalgic but at least relatable. More than can be said for some other commentaries floating around here.

        • David G LA says:

          Spot on ripost, but in good fun. We love you Paulo

        • Russell says:

          I can’t count the number of Canadian nurses I know working in the states because socialized medicine in their home country doesn’t pay the bills. I once told my old boss, from Canada, that you often hear about third-world countries, but never second-world countries. That, my friend, is Canada.

        • Wolf Richter says:


          “…but never second-world countries. That, my friend, is Canada.”

          Just because you haven’t heard of it doesn’t mean others haven’t heard of it. The “Second World” — a phrase coming out of the Cold War era — was the Communist Bloc: the Soviet Union, China, Cuba et al. My understanding is that Canada was not in the Communist Bloc, despite assertions here to the contrary :-]

        • Lisa_Hooker says:

          Brings a new meaning – going on a Zant in the comments.

        • Russell says:

          Thanks, Wolf regarding Canada/2nd world country.

          Learned something today. Although Canada is highly socialist I would never consider them communist.

  16. DRVDOOM says:

    The over spray from Jeromes fab money printer would have cleaned this little problem up. It pays to be in the Empire Club. These cats were not and they goin’ down.

  17. MonkeyBusiness says:

    SPACs will be the new REITs one of these days meaning they will lose their investors a ton of money ;)

  18. Kasadour says:

    Who cares if the center just dropped as long as we all get paid? Do these people not see beyond what is right front of their faces? After they get paid then what? It’s not coming back. The longer these buildings sit unoccupied the more they deteriorate, and they are hella expensive to maintain. And they need daily maintenance. Who’s going to maintain these brick and mortar cartoon buildings?

    • Old School says:

      As a kid it used to be a puzzle when a saw an empty house falling in and my parents told me it was someone in a nursing home or caught up in an estate. Same thing for businesses as my parents said that factory went out of business.

      Now I realize these are private property investments meant to serve the owners needs. Sometimes that means life happens and the investment in a house or business didn’t work out. Someone eventually comes along and pays a marked down price and tries to invest best they know how for their benefit.

      • Kasadour says:

        Right, but for now, these buildings still need to be maintained. Dan Bell’s “dead mall series” really highlights the impact of deterioration, and how fast it sets in, and how difficult it is to reverse the effects of deterioration once it takes hold.

  19. Breamrod says:

    “the rent’s too damn high” has killed more mom pops than covid. Small shopping centers valued space to the point that small shops couldn’t make it. As one who grew up in a retail family it was a cardinal rule that ones rent factor should never exceed 10% of your sales if you wanted to make any money.

  20. Cobalt Programmer says:

    Lot of malls and stores in malls act as advertisements for the people.
    Longtime ago, you have to advertise TV- internet because people purchased offline. But another way is keep a small store next to walmart or other retailer. This will be seen by several people. Even inside walmart, where you place the item decides how man person see it. This will make your brand reach everyone and people might buy it online.

  21. Sam says:

    What’s to become of all plywood/strand board when building managements & retailers choose to ‘let the light shine in’?

    Same for all those acrylic barriers.

    Landfill, recycle, or ??

    Happy Trails……

    • Trailer Trash says:

      “What’s to become of all plywood/strand board”

      Homeless shacks next to the rivers, railroad tracks, and highway interchanges.

  22. Sierra7 says:

    RE: Death of Malls:
    “Nothing is forever”
    “Change or die”

  23. Mira says:

    So the pandemic cut a long story short.
    Enabling a cleanout of the dead wood.
    & a new beginning ??
    The universe / Matrix was impatient to move on & caused the pandemic.

Comments are closed.