Westfield Walks from Mall in San Francisco, after Walking from 2 Malls in Florida & others. Screws CMBS Holders, Said in 2021 it’ll Dump All Malls, but Suddenly Blames San Francisco?

Default rate of mall CMBS rose to 7%. Simon Property Group, largest mall landlord, walked from malls for years. Tens of thousands of stores closed. Ecommerce is killing them one by one, not San Francisco.

By Wolf Richter for WOLF STREET.

Back in February 2021, we reported that Unibail-Rodamco-Westfield (URW), the largest property REIT in Europe, had announced that it would dump all its 27 Westfield malls in the US, of which 16 were in California, including the Westfield San Francisco Center. URW had acquired them in 2018 from Australian mall operator Westfield.

Since 2017, I’ve been documenting what I call the brick-and-mortar meltdown in the US, driven by ecommerce, because everything you can buy at the mall, you can buy online, except online, they have everything, and at the mall they don’t. But these morons in Europe didn’t read my stuff, and didn’t know about the brick-and-mortar meltdown in the US. The Australians however did, and they dumped those US  malls while they could.

In February 2021, we also reported that these morons at URW had lost €7.6 billion in 2020, after large write-downs of its malls, that URW was buckling under €32 billion in debt, thanks to that Westfield purchase, and that its net rental income had plunged by 28%, and that it axed its dividend, and that it tried to raise funds with a €3.5 billion rights issue, which failed.

By that time, its US unit, Westfield Group, had already started defaulting on its mall loans.

In late 2020, Westfield walked away from two Tampa Bay, Florida, malls – the Westfield Citrus Park and the Countryside Mall. The combined interest-only $278 million of mortgages had been securitized into commercial mortgage-backed securities (CMBS) that had been sold to bond funds and pension funds and whatever. And Westfield walked away from those two malls in Florida and let the CMBS holders eat the losses.

When Westfield walked from those malls, their ownership changed from Westfield to the holders of the CMBS, who are represented by a “special servicer.” Foreclosing on the properties was the only recourse CMBS holders had.

In August 2021, Westfield walked away from the 1-million sq. ft. Westfield Palm Desert Mall in Palm Desert, California. A 575,000-square-foot portion of the mall, not including the anchor stores, served as collateral for a $125 million interest-only mortgage that was securitized in 2014 into CMBS and sold to bond funds and pension funds and whoever. At the time, Wall Street had that portion of the mall appraised at $212 million. By August 2021, it wasn’t worth the loan amount of $125 million?

And so Westfield Group dumped mall after mall, selling some, walking away from others, screwing CMBS holders along the way. And now it’s finally the turn of Westfield San Francisco Center, which it co-owns with Brookfield Asset Management.

A portion of the Westfield San Francisco Center is collateral for, you guessed it, an interest-only $558 million 10-year mortgage that was securitized in 2016 and sold to bond funds, etc.

Malls in the US are in horrible shape. Ecommerce is killing them.

Westfield is in good company: The largest mall landlord in the US, Simon Property Group (SPG) defaulted on and walked away from overindebted malls across the US, no problem, including the 170-store 1.2-million-square-foot Town Center at Cobb in Georgia in early 2021, the 1.1-million-square-foot Montgomery Mall in North Wales, Pennsylvania in mid-2021, and even in 2019, the 1-million-square-foot Independence Center in a suburb of Kansas City, Missouri, which generated what was then the largest loss ever by a retail CMBS loan.

Three publicly traded US mall REITs have filed for bankruptcy since November 2020: the SPG’s spinoff, Washington Prime GroupCBL & Associates Properties, and Pennsylvania Real Estate Investment Trust. And there are zombie malls everywhere across the US.

Retail CMBS have had enormous default rates for years. In May, the default rate rose to 6.7%, according to data by Trepp, which tracks CMBS. Retail CMBS are by far the worst of the CMBS categories, far worse than the next worst in line, lodging (4.3%) and Office, which we discuss a lot here at 4.0%:

As so many malls, Westfield San Francisco Center lost one of the anchor stores, Nordstrom.

Nordstrom has been closing lots of stores for years around the country even before the pandemic, like all department stores that are still alive, and the many that aren’t. But when it finally closed two stores in San Francisco, and blamed “the dynamics of the downtown San Francisco market,” rather than its own failure to compete with ecommerce, it became a national clickbait headline circus.

Brick and mortar retail has lost the battle against ecommerce, and more and more retailers will be taken out.

An endless number of retailers, from Sears Holdings and Toys ‘R’ Us on down to Bed, Bath & Beyond filed for bankruptcy and most of them vanished. All regional and nearly all national department store chains filed for bankruptcy and vanished. There are just a few left, including Nordstrom, Kohl’s, and Macy’s.

Macy’s closed hundreds of stores over the years and continues to close stores.  J.C. Penney, which finally filed for bankruptcy in 2020, was bought out of bankruptcy by SPG and Brookfield, because they didn’t want shuttered anchor stores doom their malls.

When Nordstrom announced that it would close the two stores in San Francisco, Westfield blamed in part “unsafe conditions” and “lack of enforcement against rampant criminal activity.”

In reality, ecommerce and retail executives’ inability to figure out how to compete with ecommerce have been the real enemy that has been killing mall after mall. Neither Nordstrom nor Westfield blamed their own executives and ecommerce for the failures across the US. They blamed San Francisco, which stimulates the braindead media circus that covers up their own failures.

Nordstrom has a large ecommerce business, and that’s doing fairly well, but its brick-and-mortar stores are doomed. That’s just how it is. And malls are doomed. They have been obviated by the big change in how Americans shop. Ecommerce is turning malls into dead meat, one by one. And San Francisco is the epicenter of ecommerce.

The other big mall in San Francisco, Stonestown Galleria, is being redeveloped by owner Brookfield; it’s adding nearly 3,000 housing units and parks to the retail spaces, at a cost of $2 billion. That’s the future of malls.

But the bitter reality of how ecommerce has been crushing brick-and-mortar retail – and particularly department stores – for years doesn’t make clickbait headlines in the fantasy media circus.

For your amusement, department store brick-and-mortar sales since 1998. That’s where Nordstrom’s brick-and-mortar store are. Do you see what the problem is? It’s not San Francisco:

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

  159 comments for “Westfield Walks from Mall in San Francisco, after Walking from 2 Malls in Florida & others. Screws CMBS Holders, Said in 2021 it’ll Dump All Malls, but Suddenly Blames San Francisco?

  1. Michael Testa says:

    I have to admit, you make a very compelling numbers based case. Well done.
    I guess the leaders of SF read your stuff and maybe it helps them to seemingly tolerate the “clickbait” excuses that the companies use. (By the way, do you really think those excuses are a zero percent factor)?

    • Wolf Richter says:

      Walgreens pulled the same crap. They’re all doing it. Walgreens had already closed 595 stores in the US in the two fiscal years through August 31, 2021, including some of the 200 Walgreens-branded stores that it had announced in 2019 it would close. This company is a store-closing machine. And no one cared, and it didn’t become global clickbait.

      But then in Oct 2021, Walgreens announced that it would close some of its huge number of stores in San Francisco. Even after these closures, there were 53 stores in SF, some of them only a few blocks from each other. Walgreens blamed San Francisco, same BS. And it triggered a global wave of clickbait.

      I ripped Walgreens apart, showing that it was a troubled retailer that was losing its pharmacy business in SF and elsewhere, and that’s why it closed the stores around the US and in SF.

      Walgreens recently admitted that much, which was published in local media, but no one paid attention, and it didn’t become global clickbait. People don’t want to see reality.

      Here is where I ripped Walgreens apart over its BS announcement:


      I’m not going to let them get away with this crap anymore.

      • WaterDog says:

        Drug stores are the worst.

        It’s like a Dollar Store threw up…

        Old candy from Halloween, crappy tourist crap. Everything else you can buy at Walmart/Target for 1/2 price.

        Their retail game sucks. I never buy anything in CVS/Walgreens except medicine.

        • joedidee says:

          few blocks away the CVS boarded up
          hadn’t paid attention and my wife said it was done months ago
          many of these stores I believe had like 75 year leases
          wonder how lender is doing

        • Dr L says:

          even prescriptions you can usually either get via a decent mail-order pharmacy or, if it’s something you need sooner, the pharmacy at any Kroger’s/similar grocery store where you might already have to stop on the way home, anyway.

      • Alton Magson says:

        A few years back I was on holiday in NYC and walked over to Walgreen’s on Times Square to grab a few beers to drink in my hotel room with my wife. I only had cash on me. I was 68 years old. They wouldn’t sell me the beer because they required ID proof of age . How stupid is that? No wonder they are having problems.

      • Richard says:

        Wolf, hoping you will write an article about the raging inflation and CPI data. Thanks

      • Occam says:

        When The Narrative decides that you are a problem it is relentless, regardless of the facts. It is a phenomenon of the social media age and the 24/7 news cycle, which create a ravenous appetite for content. “It’s a story too good to question” is a mentality that claims many victims. SF is the new poster boy for the phenomenon.

        • Russell1200 says:

          The sinking off the USN Maine -almost certainly through the spontaneous combustion of the unstable gunpowder they used back then- certainly got us rolling into war with Spain.

          That type of narrative steamroll has been around for some time. It might be garder niw because media and interests are so diffuse

        • JimL says:

          I was born and raised in Chicago. I don’t live there anymore, but I still visit frequently. Very frequently.

          The other day I was at a poker table and we were talking about where we were from. I mentioned I was from Chicago.

          Another player asked me how many times I had been shot at. He was serious.

          I couldn’t stop laughing.

          People who are ignorant (and I mean that in the literal sense, not an insulting sense) get fed this narrative and therefore think it is true. They think Chicago is where people get shit at.

          It doesn’t matter that Chicago doesn’t even make the top 10 of murder per capiita in the country. It doesn’t matter that it it’s murder rate is half of what it was at its peak. Narrative rules.

          Chicago is one of the most beautiful cities in the world (during the summer, don’t go in the winter when it fricking sucks). The lakefront is awesome. Wrigley Field is incredible. All of the touristy areas are perfectly safe.

          Sure there are bad neighborhoods, just like there are in any city, but tourists won’t be traveling to those areas.

          Millions of people has grown up and raised families there. They have never have been shot at.

          FFS, I wanted to yell that he should get better sources of information. Ones that do not take advantage of you. Unfortunately that wouldn’t work.

          The narrative exists.

    • Leo says:

      While shoplifting doesn’t really help malls, I feel that the biggest problems are deeper than E-Commerce.

      Technically, in ECommerce, you get more inventory choice, but not higher efficiency, because many products are shipped around 1/3 of the country! The logistics efficiency comes from batching and so Technically for this part big chains like Walmart can be as efficient as an Amazon warehouse close to city.

      Also customers go to Costco and buy 2 weeks worth of stuff in a batch. Compare that to multiple online orders shipped independently from different warehouses.

      However, the fact is despite all retail store efficiencies, ECommerce is competing well on price. A few reasons for this:
      1. Amazon didn’t need to make money for long, thanks to ZIRP. Even today some analysts doubt that Amazon’s profits come from cloud and retail division may be loss making!
      2. ZIRP asset bubbles is another culprit. It boosted prices of Commercial real estate and residential real estate in cities that in turn boosted rents. This in term boosted employee salaries in big cities as these employees need to make rent. Employee expenses is the biggest expenditure for retail business closely followed by store rent! Clearly the retailer stores took a 1-2 jab-cross combo punches here. The E-Commerce avoided this by hosting warehouses and delivery network outside of big cities where both labor cost and rents is lower.
      3. The persistent inflation and persistent asset bubbles has weakened employee commitments as more employees realize that their jobs will never meet their financial goals. This seem affect retailer stores more because they have to work in sync with customers. The ECommerce has async model. If lack of commitment results in you delivery getting a day or 2 late, you don’t really care. The website can just push schedule before hand.
      4. Another core culprit is outsourcing higher end manufacturing and moving more work force to retail. It caused retail margins to bloat as the goods cost was a small fraction of price (between 10% and 40%). This allowed inefficient retail that allowed E-COMMERCE a chance to enter.

      How can brick and mortar retail come back:
      1. Get rid of ZIRP for good: Raise interest rate 5% higher than Max of (core cpi, cpi) for 10+ years.
      2. Stop Fed Put on Asset prices: Fed must dump MBS, Treasuries. Let housing and CMBS correct 50% to 70%.
      3. Using reduce labor cost and high anti-dumping duties on import, bring back manufacturing. This will result in more productive society with lesser reliance on retail. This lower retail share will make it harder for ECommerce to compete.

      • candyman says:

        You and Wolf have 98% of the story. Wolf is correct, brick and mortar has been losing to ecommerce, bit let’s look at this from the side angle. A major reason is retailers ( large companies and malls) over built. We have too much excess in retail, we don’t need all those stores. Never did, so ecommerce pushed it over the cliff. The retailers also were highly leveraged. This, Wolf mentions, and has written articles about it, is the other major reason retailers are closing stores. They simply can not afford to make the interest payments. BBB, Nordstrom, Macy’s, Neiman Marcus, ALL have huge debt levels. This nonsense started in the late 80’S. Your pension plans, bond holders, have been making a load from sucking retail dry. This is good news when I see CMBS getting slammed. The debt these retailers have assumed is beyond reasonable expectation to be paid off.

        Inner city closings is more due to the fact workers are slow to return. Rents are high, employee payroll/benefits are expensive the stores are losing money. Crime may exist, but retailers through this out to the media, in my opinion, to bargain for tax breaks from the cities. Anything to reduce expenses.

        So, this is a mixed bag of issues, resulting in the net loss of retail space, that which we did not need. So, beware as well, ecommerce is not guaranteed success, simply because Walgreens , CVS, BBB, and others have closed. Amazon knows this.

        • Stevie says:

          I also question placing too much blame on e-commerce for brick and mortar failures, as I recall reading (just prior to Covid) that USA had about four times as much retail space as comparable developed economies. As Candyman says, a vast bubble driven by real estate preferences and subsidies, hype, TINA, but not actual need. Even before e-commerce, excess retail appeared obvious to me. implying that a lot of brick and mortar would have busted even without e-commerce.

  2. alx west says:

    Brick and mortar retail has lost the battle against ecommerce, and more and more retailers will be taken out.

    never understood why…

    you already have established physical location that people visit all the time, so just add decent e -commerce and you are golden!

    people need physical location to check stuff, receive one, or send back.

    everything that related to stuff w. color-size-taste variation need to be checked first and-or possible human consultation or iteration.

    you ordered some coat on-line , you did not like it, you returned
    on physical location, ordered other size-color, checked next time
    on-site, paid and took home.

    simple, less time consuming, affordable , etc .


    • Wolf Richter says:

      It doesn’t matter what you want or need. But “people” do what THEY want. And they want to shop online. It’s a huge gigantic business that’s eating up all the mall stores. Compare my department store sales chart in the article above to ecommerce sales.

      Since 2019, ecommerce sales have DOUBLED:


      • alx west says:

        m3 money aggregate in USA grew 50% since 2019! covid years!

        there are about 260-270 mln adults in USA.

        so those 280 bln $ per year is just -+1000$ per person, or less than 100$ per month.

        cable bill , or cell phone bil. that is it!


      • candyman says:

        BUT why do they want to shop online? There are many factors, not all about ease and price. This is where the retailers lost sight, or never had it. SEARS, had the catalog business sewed up, so how did they not transition to digital? Amazon ate them. Why? Ignorance, stupidity? They never thought retail could , would change. Same ideology to WFH and return to office. Many employers could never have believed the system could/would change. Adaptability is at play here.
        The retailers, cut employees, service. So why shop in a store and get treated poorly? The people left, and the retailers are still trying to understand why.

        • Ethan in NoVA says:

          People can shop online while at work.

          Online order takes 2 minutes versus an hour or more of driving and going into store. Also, B&M is often a disappointment with bad selection and poor stock.

        • Arnold says:

          There were a lot of catalog businesses in the 1990’s. None of which transitioned successfully to online.

          “The Innovator’s Dilemma” by Christensen explains quite well how they and Sear never could.

        • phillip jeffreys says:

          Not an attack: are you suggesting that ecommerce does not have vulnerabilities that will impact that business model downstream? i.e., that will undermine the long-term viability of that model?

      • JimL says:

        E-commerce is exactly the right answer.

        The only brick and mortar stores that are doing well are those that can offer something that online sites can’t. Really high end stores are doing just fine because they can offer personal service. If you are going to spend $1000 or more on a purse, you can go to a B&M store where you will get a clerk who will service your every need and kiss your a$$ while you decide which over priced purse you are going to buy. The other stores that are doing well are the home improvement/contractor stores (Home Depot and Lowe’s, with Ace hardware limping along). That is because they have a few things going for them. One, expertise. For the casual home improvement project, they provide service that just cannot be found online. Also, for the professional, they provide ease of access. No contractor is going to order 15 10-foot 2×4s online. For one, the shipping costs are to exorbitant, for two, the need is to immediate. They need it now, not tomorrow or Thursday or whatever the Prime Day is in that area.

        Retail is due for an overhaul. Physical locations that provide a service will make it. Those that do not are going to perish.

    • Sams says:

      “You already have established physical location that people visit all the time”

      Well maybe not. City planing and car culture may work against that in the USA. A lot of malls in the USA is sourounded by large parking lots and rather sparsely built up areas. A lot of people in a radius of half an hour driving, but you have to get into the car to drive there. After deciding to go shopping. What is the physical location then worth?

      Other places in the world the “mall” is at the railway station you walk trough on your way to work or home from work. A lot of people walk by in other errands, now what is the physical location worth?

      • ram says:

        Yes, in Australia the biggest, and truly impressive, malls ARE the railway stations, i.e. the station is below the mall. They seem to be doing pretty well. Not alot of retail vacancies.

    • El Katz says:

      It’s easy to buy commodity items online. Bars of soap, tubes of caulk, file folders, printer paper….. but I won’t buy things I actually wear unless I get to try them first. However, once I commit to a brand/source of clothing (for example), I’ll stick with it as the quality, durability, and sizing are consistent. Since I’m not “trendy”, that method works for me. An Hermes’ tie purchased in 2000 looks as good as one purchased in 2023 if you’ve properly cared for it.

      • Old Ghost says:

        El Katz wrote “….. I won’t buy things I actually wear unless I get to try them first. However, once I commit to a brand/source of clothing (for example), I’ll stick with it as the quality, durability, and sizing are consistent…”

        Clothing size is not always consistent. I went thru this yesterday at the hardware store where I buy blue jeans. The size 32 jeans I bought last month fit fine, and are even loose on me. But the size 32 purchased yesterday are tight, especially around my hips. Same maker (in Madagascar). They are being returned today. Others have reported the same experience.

        • VintageVNvet says:

          Very true in my recent experience buying shoes online OG:
          Sizes varied quite a bit across styles from same company.
          Fortunately, I have several fave friends and family to give away shoes, shirts, etc., that I buy and either don’t like, or they don’t fit…
          Also, it seems as though all the ecommerce folks do ”get it” and allow completely free returns if that’s the way you want to proceed.

    • bulfinch says:

      Online retail v brick & mortar does not scale evenly across all concerns. I can think of a few instances where I want a shop with actual shop hours & people with boots on the ground: footwear — particularly performance or athletic shoes, where establishing fit and consulting with an SME has real benefits; furniture — how do you know whether a chair that looks good isn’t a total ass-killer? Same for mattresses; eyeglasses or sunglasses; preowned media (misgraded books & records are the scourge of collectors); musical equipment…javelins and swords & such…

      The experience of buying from a good brick-n-mortar with sentient staff versus online retail is a bit like what reading material by a writer with soul is versus AI -generated blurb grafts

      • 91B20 1stCav (AUS) says:

        bul – think it’s perhaps a race between a generation remembering what good brick’n mortar can be vs. retraining a generation of online consumers who won’t know how to balk at the inevitable end of ‘free’ shipping/returns…

        may we all find a better day.

    • polistra says:

      Sears and Penneys didn’t need to add ecommerce. They were doing ecommerce via mail and telephone and teletype for 120 years before Amazon came along. They had perfected the order-taking and shipment facilities.

      They failed to switch to a new style of teletype, which should have been the EASIEST and least capital-intensive part of the change.

  3. GringoGreg says:

    Only a fool foreigner would invest in america when the feds will confiscate your investment! Not to mention the massive bubble which is yet to pop spraying its stench over the world’s economy!

  4. GringoGreg says:

    4 trillion more debt-stimulus being added to the insane 31.5 trillion$ unpayable debt and the CMBS keeps crashing! Will be hilarious when 50% of tax receipts will go to servicing the debt!

  5. Petunia says:


    Crime is the big reason malls are dying and it didn’t start in SF or NYC, but both are now the poster children for the demise of retail.

    I first started to feel uncomfortable at the mall when I moved to Florida in the early 2000’s. I didn’t grow up in the best neighborhood, so I know what a criminal element is when I see it. The local mall in my “nice” Florida neighborhood was “infested” with gangs. The security guys were their friends. I stop going alone because I felt uncomfortable and unprotected.

    The mall operators had to know this was going on for a long time because they know what the shrinkage is and how many police calls the malls generate. They didn’t increase security and they should have and now they have lost total control.

    I don’t like eCommerce and miss my days browsing at the mall. The truth is I save more using eCommerce because I don’t impulse buy as much. I shop a site when I get a notification of a sale, or when I’m looking for a specific item. eCommerce is deflationary because I can shop around the world for an item and arbitrage price, taxes, and currencies.

    Retail can come back when security is restored, which I don’t think will be anytime soon.

    • Anthony A. says:

      Petunia, you can forget about security coming back to life and saving the retail establishments. They don’t pay those people enough to risk their lives.

      My youngest daughter dated a Brinks driver here in Houston years ago. Brinks was paying those guys $7.50 an hour at that time. He got in a shoot out at at a location where he and his partner were ambushed coming out of the location with bags of money. He shot one of the bad guys and lost his job over that incident. Tough business being in “security”.

      • Harvey Mushman says:


      • bulfinch says:

        I remember those ambush operations on the news. Pretty well-organized, targeted operation. My understanding at the time was that it was a more dangerous caper given that Brinks drivers had cart blanche to open fire on a clear & present threat?

    • Herpderp says:

      Amazon is the reason malls are dying*

      • denisesail says:

        The delivery charge for amazon needs to be higher(Tax on delivery) and the younger gen needs to recognize the economic repercussions for failed bricks and mortar. Higher property taxes, higher sales tax, lower property values and more blighted shopping centers and down town communities. Not every shopping mall can be turned into housing and plowed down and redeveloped as pedestrian friendly shopping. Never mind higher interest rates all around. Powell really screwed up by holding rates at zero for too long.

        • Herpderp says:

          Property taxes will go up as needed. Property values will go down as needed. Since most of the younger generation will NEVER own property these are of little concern to them. Their landlords will raise rents higher than tax increases regardless. We dont need to keep around ugly inefficient strip malls just to maintain the status quo. Im sure the move to the automobile obliterated the stable-hand tax revenue at the turn of the century too. It will be tragic the coast to coast strip mall Louis and Clark envisioned slowly disappears as the land stops being parking lots and Dollar Generals, but I have faith America will continue.

        • gaston says:

          Why does it “need to higher”
          What kind of stance is that? Amazon delivery charge needs to meet Amazons needs.

          And yes, every closed shopping mall can be converted into anything if there is demand. That is what an open market is. You are proposing an artificial restriction on a market to suit what you think should happen.

        • Arnold says:

          Why save brick and mortar stores?

          Limited selection, limited hours, poorly paid staff, bad parking.

          That “shop ’till you drop” mentality needs to end.

        • bulfinch says:

          It’s not about shop-til-you-drop; you’re conflating unbridled consumerism with commerce in general.

          Malls suck, so forget that. There’re numerous good arguments for brick-n-mortar shops — particularly locally-owned. Creating a concern that provides for a local need helps define the tone and feel of a place. Sometimes entire generational cultures spring up around local industries. And paying patronage to your neighbor is about as organic a means for developing relationships as exists.

          As long as our GDP is grossly over-dependent on consumption, then we might as well have a vibrant homespun network of makers and shops. Living in hallowed -out hellscape populated by schizoid Amazon shoppers sounds real fun.

    • longstreet says:

      These entities pay taxes for police protection…..
      and it doesnt seem to be delivered.
      The safety of the employees as well. Citadel pulled out of Chicago for that reason.

      • Arnold says:

        Police have no obligation to protect anyone. This was established in the case of Warren v. District of Columbia, and more recently demonstrated in Uvaldi Texas last year.

        • longstreet says:

          Stopping crime protects people.
          Employees are people.
          The case you cite has nothing to do with my point.
          I do not suggest police stand at a post and guard people.

    • NoBadCake says:

      “Retail can come back when security is restored”

      We’re in a well established cycle stage of civilization where at the end we remember that a degree of self-restraint is necessary for all to thrive. We’ll get there! : )

    • Wolf Richter says:

      You’ve said that for years, Petunia, because you’re among the ever-smaller number of people who actually enjoy going to the mall.

      Brick and mortar malls will never come back. An increasingly huge number of people would never again waste their time driving to the mall, and driving from mall to mall, wasting hours trying to find what you’re looking for, when you can buy it in 10 minutes from your home and have it delivered. There is now a whole generation out there that grew up without ever going to a mall. They’ve grown up with the idea that everything is right at their fingertips.

      For the ever-smaller number of people who enjoy “going to the mall,” there will still be some malls around for a while longer. Each time a mall closes, part of its remaining business heads to the surrounding malls, the rest goes online. And so it goes, mall by mall.

      • RichardW says:

        Thanks, Wolf. I was feel some seller’s remorse after selling my SPG shares and then seeing the price go up. Now I feel better.

      • candyman says:

        so true..another reason malls will die is the expense of heating , air conditioning, all the assorted cam charges. Thats why so many Big Box stores now. Leave the walkers behind, they went to socialize, not buy. Parking is one of their best advantages.

        It is time for retailers to figure out what people will buy, want to buy, in person, and DELIVER on that. I buy Chewy, because THEY DELIVER. Food and litter is heavy, and it is harder now that Im not so young!
        I personally believe, the success lies in the service quality, knowledge of the retail employee. Nothing like going to ACE and speaking with a professional on how to tackle a problem, All things can not be googled as successfully as speaking face to face. Also a trait lost on the text junkies. There is room for retail success.
        These will not be low paying jobs either. Expertise, knowledge will be in demand.

        This is how I base my business. A niche, not an everyday bulk bin candy store. Overly simplified, a more exclusive, quality product, keeps them coming back.

        • Einhal says:

          candyman, the problem is that Chewy and many other online retailers don’t have a viable business model. With delivery, they end up losing money, but have only survived thus far because of years of malinvestment due to ZIRP.

          Once normalcy returns to the economy, a lot of people will end up paying a lot more for this convenience than they are used to.

      • Roger Davis says:

        Wolf, My wife and I are old. Ancient. My wife becomes 90 in two months. To us malls in the 60’s and 70’s, etc. were wonderful! Like instead of Downtown and spread over 15 city blocks the whole world was now totally encompassed within a few footsteps. Oh the pure joy of it!

        Petunia may have fewer years than us but obviously remembers the glory years of Malls.

        We still frequent Malls and local retail. We still walk everyday and usually end up at one local store or another for at least a look.

        About a year ago our local bookstore had a book my wife was considering but the price was, to quote her, “Disgusting.”

        She did the unthinkable. She found it online for less and ordered it. As with the Ukrainian dam the waters flowed, local retail was washed away and now my wife orders, even from the Grocery store – ON LINE. I agree she is a pestilence, but God I still love her so I must forgive her insanities.

        To add to the blasphemy I recently found a shirt, in a colour (yes I’m Canadian) that was not at the local retailer. I… I… bought it on line.

        On-line shopping may be a false god. But for my sins I’ve been converted. Now I must decide if I should risk having my IQ lowered by trying to watch Fox News. No, no – Fox News would be a blasphemy too far.

        • Ed C says:

          Yeah you are a Canadian alright.

        • Harrold says:

          I donate many boxes of books when I move. No more. If it’s not in the library or electronic form I don’t need it. I consider books wasteful because you read them once, then you have a heavy chunk of “wood” taking up space.

        • eg says:

          Harold, I must confess to a book addiction — I likely already own more than my lifespan will allow me to read. But the habit of annotation with a pencil I cannot seem to kick (I only read nonfiction anymore — two English degrees in 4 years almost 40 years ago killed any enjoyment of fiction stone dead). I very occasionally order e-books but the highlighting and annotation process will never come naturally to me.

        • Michael Gaff says:

          A great post. I am ashamed, somewhat, that I am part and parcel to the demise of malls.

          I knew Melvin Simon personally. He had no animosity towards anyone that I ever discerned. I even flew a couple of his jets that lived in Indianapolis.
          He enjoyed his wealth and spent years worried about the retribution from age-old anti-Jewish clowns, who apparently dreamed of his demise.
          Allah hu Akbar.

      • Harry Houndstooth says:

        Newspapers and malls may never disappear completely…

        You can still buy a buggy whip…


      • Swamp Creature says:

        I haven’t been to a mall for at least 10 years. The last time I went there was when my wallet was toast. I went into Macy’s at Westfields Mall 2 miles from me and bought the same wallet that I had. The dude could not make change and told me to use a credit card. I told him to accept cash or lose the sale. He went over to the other side of the store to get the change.

    • Sams says:

      Long time since last in the USA. Ok i did not always feel safe in the USA, but that was more about the chances of ending in the middle of a shoot out between trigger happy americans. Or run over/crashed into or some other accident with a drunk driver. Then as I was om business travels and when traveling to ships you end up at the docks. In places like Morgan City. Not at the Mall the middle class go shopping.

      What I noticed is that a lot of americans are quite scared, even when the souroundings is not that bad, even if they look rather run down. Actually after traveling the world I realized that traffic accidents, fires and the like due to bad work, scetchy maintenance and bad practices was the biggest risk most places.

      • bulfinch says:

        There’s a helluva lot more to life than feeling safe. Some of the best stuff you’ll find comes outta the moments where you feel the least amount of safe.

        • cd says:

          yes, like in an Ensenada bar or a 10 ft Ocean beach day and a fresh half eaten Seal on the beach
          Sharky big wave terror is heart pumping

  6. andy says:

    This area in SF is pretty safe. Unless you go there in person. Same with BART. Not for the faint-hearted.

    • Wolf Richter says:

      I take BART. Look, I don’t like the BART screech either. But other than that, it’s fine. I walk all over the city. The Tenderloin is bad, but that’s a small area of a few blocks.

      I lived in Tulsa for decades. It would never occur to me to walk anywhere. Tulsa has two to three times the homicide rate of San Francisco. There are homeless all over downtown. When I went to visit last time, I stayed at a hotel downtown (the converted old City Hall building). During the middle of the business day, homeless people were just about all the people I saw.

      • andy says:

        It is because you are brave guy, Wolf. You swim to Alcatraz and back fighting off sharks and sea lions along the way. Again, not for the faint-hearted.

        • Harvey Mushman says:

          Yes, he is a brave guy. Did you see him in the movie “Flight of the Intruder”? It was awesome!!

      • Petunia says:


        We recently spent a day at the Alamo in San Antonio, in that area we saw a bunch of BART cars being transported on trucks heading your way. Relief is on the way.

        BTW, the Alamo and the River Walk made for a great day.

        • bulfinch says:

          Did you make it down to basement?

        • Petunia says:


          Yes I did, and the bike wasn’t there. The area they dug up to show the foundation, I consider that the basement.

        • Wolf Richter says:

          We’ve had the new cars for maybe a year. I’ve been on them. There are more and more now. They’re nice, but they screech just as much as the old cars. It seems to be the rails that trigger a harmonic vibration somewhere. They said they figured out what it was and fixed it, and maybe it got a tiny little bit better, but it’s still a loud screech.

          Yes, I always enjoyed San Antonio (1980s).

      • Occam says:

        The Narrative isn’t interested in Tulsa because Tulsa lacks the cultural significance, history, and cachet of SF. When the famous and glamorous fall from their pedestal, everyone is very interested. When some guy in Oklahoma hits the skids no one cares.

    • Eric says:

      “This area in SF is pretty safe. Unless you go there in person.”

      Are you by chance related to a former catcher for the New York Yankees?

  7. Kent says:

    Some investor out of San Francisco bought out our old mall here in Titusville, Florida. The mall was anchored by Sears (Yikes!) and was built in the 1960’s during the heyday of NASA and Apollo. His plan is to tear the building down, and build multi-story housing with the first floor being shopping and dining. Sounds good, but the housing is going to be rental starting at about $2k for a one bedroom up to $3.5k/month for a 3 bedroom. Probably great prices in San Fran, but very steep for us yokels. Our older mall was torn down and turned into an outdoor, car-centric “shopping village”. Again, probably a great idea for San Fran, but its 98 degrees outside today, muggy with afternoon thunderstorms. Not ideal for outdoor shopping.

    • Herpderp says:

      Wow 3.5k for a three bedroom? You could put a couple bunks in there and probably have the most affordable housing in the country. Im incredibly jealous.

      • Kent says:

        Where I live, you could rent a 3 bedroom house for $1200/mo before COVID. The median per capita household income is only $50k. 12% taxes will knock down your take home to $45k. 3.5k is $42,000/year. Leaves a family of 4 with about $3,000 for everything else, including watching the children starve in paradise.

        Florida currently ranks 50th in the nation in housing costs relative to income, and that’s before including $6k in annual homeowner’s insurance. It’s rapidly becoming unliveable for the average guy or gal. 10 years ago it was the best place in country to live IMHO.

        • Escierto says:

          Your comments are exactly right. I could say the same thing about Texas today. A great place 20 years ago but completely unlivable today.

        • Petunia says:

          I know people in FL who make over $250K and complain about the cost of living. Mostly rent, insurance, taxes, and transportation. The train from West Palm to Miami is over $600 a month and parking is extra.

        • Einhal says:

          Petunia, it is not. The train from West Palm to Miami is $339 for a monthly.

          Your general point is well taken though.

        • Petunia says:


          The premium pass is $629 for a monthly and the parking is expensive as well. You don’t expect the one percent to mingle with the riffraff.

        • Einhal says:

          Ha, I guess I don’t consider a family earning $250k to be the 1% that has any business taking premium train rides…

    • bulfinch says:

      In Titusville??? Who’s clamoring to be rent poor in Titusville? There’s not only no there there, there’s no their or they’re there, either.


  8. greg says:

    Years ago I read an article somewhere that said the USA had something like 4 times more retail floor space per customer than Europe. It seems post-WW2 we have had waves of retail expansion: first, waves of department store chains, then malls, then strip malls and then stand alone chain stores such as Best Buy and BB&Y. Now we have Amazon and such with cargo vans running all over the place with deliveries. Each succeeding stage at least reduced or extinguished the growth of the preceding one.

    But, I suspect, we now need to go thru larger re-rationalization, hopefully a saner one. We’ve been building expensive brick and mortar buildings with a rational life of twenty or so years before destruction or changed redevelopment. Lots of inefficiency by an industry and set of consumers driven into a frenzy of buying–driven by advertising, not need. As I see it, much bigger losses in retail and commercial real estate over the next generation.

    • Oldpaperboy says:

      I read a similar article and came to the same conclusion…

    • Martín says:

      Europe does have way less retail space, but there’s also the fact that in Europe shopping malls are integrated in the cities, like you can literally be walking around the city and end up inside a shopping mall. This is way more uncommon in the US, because cities are made for cars and you have to drive to get everywhere. That’s why e-commerce hasn’t hit that hard european retail, because it’s better weaved into everyday life so it’s still convenient.

      • Denisesail says:

        Most “shopping malls” in Europe are in major Train Stations, Intersecting subway lines and grocery stores carry everything. Could not get over how compact you can get gardening and wood working tools (table saw) at Lidl in Italy. We are car centric. Germans have big cars like us to carry “stuff” but the French and Italians live in a less is more world.

        • Arnold says:

          Zoning is responsible for a lot of that in the US. Many regions use zoning to separate residential, shopping, recreational, and work areas from each other necessitating the use of an automobile to traverse.

        • Ed C says:

          Don’t forget airports. Schiphol has an amazing array of shops under its roof. Miss the days of traveling to Amsterdam on business.

      • Seba says:

        This is true, in US and Canada we have a lot of sprawl. There are still some very vibrant shopping districts across the continent though, the death of brick and mortar is not happening at an even pace. Toronto in Canada for instance you can walk into one of the major malls and be basically bouncing off of people to get to a store, I believe at the time when Nordstrom decided to pull out of Canada their TO stores were the only profitable ones in the country (Not too sure about the Van store, possibly that one as well). I spend more time traveling western Canada and US these days and the cities are a bit different out here. Some have nice attractive cores but for the most part the attractions are outside the city, there’s oceans, mountains, waterfalls and massive parks with giant trees etc. It’s a very different lifestyle which I’m sure has an impact on the pace of decline for brick and mortar.

        • Nick Kelly says:

          Nordstrom is completely out of Canada, filing for CCCA or bankruptcy with huge, one page announcement in Globe and Mail a few days ago.

          They don’t blame crime etc. in To or Van for their pull out as this would be a bit far- fetched even for a corporate flack.

          I’m glad WR addressed this hype cuz with so many outfits claiming this, I was tempted to ask about it, but was hesitant cuz it’s a bit touchy when a guy lives there.

  9. Xavier Caveat says:

    Simon says walk away.

  10. Citizen AllenM says:

    LoL, it just keeps going. Anything with the word collateralrized is garbage packaged for the inwestors. Tranche robbery. I feel so old seeing this stuff still going.

    And going. The most interesting part is that land is only part with any residual value. And only where there is housing demand. E-commerce is the Sears catalog nuking hardware stores. The folks across the street shop Walmart, since the delivery guy stops once a week with their groceries. The future of bricks and mortar is dim.

  11. The Bob who cried Wolf says:

    I’ve often pondered if these malls would be good locations for Amazon and other large e-commerce companies to house their final mile warehouses. It’s only a matter of time before drones are delivering things and malls are perfectly located to be central hubs. All of us Gen X folks have fond memories of hanging out at the mall, but those days are long gone .

  12. Danno says:

    Most cities are the armpit of filth worldwide.

  13. Swamp Creature says:

    We have a Westfields Mall 2 miles away from me here in Montgomery County. Is this the same mall company?

      • Swamp Creature says:

        They closed the Sears store there at the Bethesda Westfields Mall and the Radio Shack, so I have no reason to go there anymore. Norstrums is still there. The mall looks dead, There was a murder in the parking lot a few years back. I think this mall will be the next to go.

    • Einhal says:

      The Westfield Montgomery in Bethesda is securitized in WFLD 2014-MONT. It’s a 10 year single property loan, so let’s say what happens next year when the loan matures.

    • Riverview Cat says:

      There was a westfield’s near me in seattle. Over 20 years the neighborhood and customers changed completely. The mall was taken over by panhandlers and homeless looking people. Stores were closing and the corner large retail spaces were left vacant. Reports of cars being burlarized.

      It started out as a place where women would shop. No more. I imagine this is happening in many places at once.

  14. Brooks says:

    I think you’re taking the media reports on San Franciso too personally. They’ve been saying the same thing about multiple cities.

  15. DanS86 says:

    Save time buying online, spend time outdoors but no one is outdoors either. What’s up?

  16. Redneck_Millionaire says:

    Cities will adapt and areas of cities will go down and back up. Cities provide ways to wealth. Glad I no longer have to live in one though.

  17. Kent says:

    Look up the cities with the highest crime rates in the country. You won’t find a single major west coast or east coast city (except Baltimore) any where near the top 30. You are far more likely to get robbed or killed walking around Houston than you are around Portland. That may be because the bad guys in Portland are stoned and a little more mellow, but it is what it is.

  18. Seba says:

    I go to Seattle couple times a year, it’s just 2.5H from where I live in BC. It’s true that it’s gotten more dumpy over the last few years. However, I travel across Canada and US for work and have been doing that for almost 10yrs now, politics don’t matter, malls are dying everywhere in slow motion and so are the big department stores. There is no political party that’s going to reverse the trend.

  19. Lili Von Schtupp says:

    Regional malls have been in the news all week, Crossgates in Albany and Poughkeepsie Galleria are deep underwater apparently. The White Plains Galleria closed but the locals are miffed the state is already trying to sell off the huge parking garage (prime RE in downtown WP) without opening it to public bid, seems like the fix is in. Locals want affordable housing there, but seeing as the nearby White Plains mall went to–shocker–more luxury condos, the only affordable housing they’ll likely get is squatting in the abandoned stairwells until its knocked down for luxury units. The way NYS does things, wouldn’t be surprised to see more closed-door deals.

    Danbury mall seems to be holding up, but man would it be great to see it go back to fairgrounds and a race track. Not sure if the soil can pass for housing there, I hear that’s why it became a mall in ’81 to begin with.

  20. El Katz says:

    Much of brick and mortar retail has been nothing more than a “catalog showroom” for at least a decade, if not longer. I use them to “touch” items before I buy them as the online purchase is often less expensive and it gets delivered to my door, without additional “concierge delivery” fees – and there’s more choice and usually an inventory to support it.

    We recently bought a fairly expensive mattress at a brick and mortar store. Then they attempted to tack on about $200 in charges for delivery, disposal, etc.,. I politely declined and asked them how they could expect people to purchase from them and bring home a 200 pound bed frame in a convertible…. the charges were removed.

    Upscale malls, at least those here in Snotsdale, have consistent traffic. The outdoor malls – like shopping in a small town – seem to be thriving, particularly those with interesting dining options (fewer chains).

    I don’t remember the last time I went into a “city” environment – it’s been probably 8 years at a minimum. I used to enjoy the vibe, but no longer.

  21. Micheal Engel says:

    1) Inflation is up, but Brent is down. Putin cannot walk away from China.
    US might sign a trade deal with Iran in order to deflate Putin income.
    2) US dollar is up. The Ruble is down. Russia wealth Fund accumulated deflating Yuan that nobody wants to buy. Russia ramped up oil production to fill the gap.
    3) Russia finance minister is trying to sell $900M of foreign currencies between June 6 and July 6, mostly in Yuan. Russia is liquidating gold. Russian inflation is high.
    4) China isn’t waking up after being comatose. Millions of young Chinese engineers grads are out of jobs. China youth unemployment is more than 20%. Consumers demand is down. China is a Pour House loaded with “printed” Yuan. USDCNY is 7.2 up from 6.2 a year ago. USD/RUB is 85.
    5) We cannot walk away from both China and Russia.

  22. libdis says:

    So are we saying all the news about San Francisco’s current condition on the streets is bs?

    I have a buddy who lives in the sea cliff area overlooking the bay bridge. He no longer takes his Tesla’s out of the garage and Ubers everywhere because every time he does they smash his windows. (Yes he has a lot of money, a real lot lol).

    He is a huge lefty and still loves SF, but even he admits it is not the safe place it used to be.

    Yes, perhaps it is safer than Tulsa. I haven’t really seen any footage of roving bands cleaning out stores in Tulsa, but perhaps it happens.

    The big fallacy of this comparison really is who the hell is going to Tulsa on vacation. Because SF is a famous tourist site with a rich history it makes it a whole different matter.

    My opinion.

    • Arnold says:

      Why doesn’t he get some of those smash proof windows they put on the Tesla Cyber truck installed?

      • libdis says:

        Maybe that’s not a bad idea? I’m going to tell him that lol.

        • Wolf Richter says:


          You either made this story up as another piece of fantasy porn about SF, or your buddy has a mental problem because there are A GAZILLION TESLAS DRIVING AROUND IN SF. It’s like the MOST COMMON CAR YOU SEE ON THE STREETS 🤣

      • libdis says:

        I actually emailed him your idea, albeit in a teasing tone. He said “wouldn’t work cause then they would just beat the s–t out of your car in retaliation”.

        I actually think he may be changing his political religion a little, if not outright subconscious…….

        I can’t ever imagine him coming out and admitting his progressivism was wrong, ever. But hey, miracles happen lol.

        He is the nicest guy in the world, and completely swallowed by the cult. Of course, he can afford to be, which is usually the case.

        • Swamp Creature says:

          I was down in Chinatown, Washington DC twice in the last three weeks. I used to like the area but in the last decade it has turned into a 3rd world cesspool of crime, drugs and homelessness. Looks exactly like the Tenderloin district of SFO. I couldn’t walk one block without being hit up for some money from some mentally ill panhandler. Some dude was at the Metro stop with a bullhorn blasting hateful profanity so load you could hear him 3 blocks away. There were no police anywhere in sight. They whole police force here is largely inoperative and defunded.

        • Swamp Creature says:

          Now I know why JB stored his classified documents in Chinatown, DC. It’s a third world s$ithole, worse than the Tenderloin district of SFO, or the Kensington district of Philadelphia. No one would go there to look for anything. Even the police are nowhere to be found anywhere near the place.

    • Doolittle says:

      The country is in a state of decay. Has been. Corruption is the culprit. Trust has been lost. We have the best gov money can buy.

      • RichardW says:

        “We have the best gov money can buy.”

        So you’re saying that the US has a better government than half the countries of the world? That’s not too bad.

        • Doolittle says:

          I didn’t say that.

        • Sams says:

          How do you arrive at USA having a better government than half of the countries in the world?

          The best governmnent money can buy sounds to me like a government where money rules to the best of money. That may not work out as the best for the citizens.

  23. Sea Creature says:

    Strangely, and I know it is anecdotal, but when I go to malls and shopping centers in other countries (SM Malls in the Philippines (Manila,Cebu,Davao), malls in Tokyo and other cities in Japan, Eastern Europe, Canada..etc) there are very few empty stores, they are full of shoppers and things seem to be going well. All these countries have Amazon, Aliexpress, Ecommerce as well so that doesn’t seem to be the only (or even the main) reason for the issues in American malls.

    As far as I can see, the brick and mortar mall meltdown seems to be (mostly?) an American phenomenon only. Reasons I can think of are that are unique to the United States:
    1)Need to drive to it and back in most cases. This makes E-commerce comparatively much easier as driving generally sucks and is a pain.
    2)In cases where the mall is available via public transit, there are lots of problems with this in the USA -vs- other countries (homeless, tweakers, lack of safety, poor schedules). This is generally not a problem in Japan, Europe,Canada..etc
    2)Poor Safety (mall rats, gangs, homeless, tweakers outside the front doors). Don’t see this in other countries much.
    3)Decimation of the American middle class, less money to spend
    4)Over mallification in the USA (there were too many stores to start with)

    • Petunia says:

      There is less street crime in those countries than in America. That’s especially true in Asia. That’s why the malls are busy there and dying here.

      Wolf doesn’t like my take on the malls being too ghetto-y in America, but most of them are.

      • Apple says:

        Malls in the Philippines have armed guards and metal detectors. Even some Starbucks have armed guards.

      • Nick Kelly says:

        After many lubricated yacks with sis, where we disagree about whatever threat posed by the homeless, I conclude that males and females have a different assessment of the threat.

      • JimL says:

        That is because your take isn’t accurate. You are safer walking the streets of most major cities now than you were in the 70’s, 80’s and 90’s.

        Long term, violent crime has drastically dropped in cities across America. A lot.

        What has increased though is homelessness and petty crime. This has made people feel irrationally unsafe.

        • phillip jeffreys says:

          You’re way off.

          But this isn’t a political forum.

        • Lemonaide says:

          Violent crime may have dropped ACROSS America, but it has not dropped UNIFORMLY ACROSS America.

          There are probably half of the places in the USA where there has not been a murder for years and years. There are probably areas that have not had a murder for 5 or 10 years or more too.

          On the other hand there are areas that have huge numbers of murders, rapes, thefts, and other assorted crime on a daily basis.

          Crime is a LOCAL problem, not a NATIONAl (ACROSS AMERICA) problem. Murder and gun crime is a local problem, not a national one.

          And some companies in American DO NOT call the police if there is a crime (LULU LEMON) so the stats do not refect the actual data.

          IMO everyone with access to a Lulu Lemon store should avail themselves of the store policy and help themselves to free merchandise………….

      • Swamp Creature says:

        Pretty soon we will see signs posted at the mall entrances saying “Enter at your own risk”. I saw them in neighborhoods in Guam when I was stationed there

    • NYguy says:

      Lot less crime when your country doesnt have any “angels with dirty faces” and criminals actually get punished.

    • Bigc says:

      Not sure where in Canada you are talking about but in the GTA (Toronto area) there is no shortage of empty malls and closed stores.
      There is plenty of homeless and gangs to go around as well. Most of the major malls are owned by the big pension funds who refuse to say give up and admit that the billions in renovations was a waste.
      The major developers here and in the US saw the writing on the wall just after 2008 blowup and levered malls to the gills to get the equity out. Bagmen were CMBS holders(funds looking for yield) and the pension funds.

  24. Seneca's Cliff says:

    One of the legs of the e-commerce stool may be slowly getting kicked out. Yesterday I had a short conversation with my Fed Ex Express driver. He said that as a result of the upcoming Fed Ex Ground and Express merger (they were two separate companies) there’ll soon only be one truck and driver covering each area ( seems like an improvement in efficiency to me).
    But the part most people don’t know is at the same time they will be eliminating express service ( 1 day, 2 day, etc) for everywhere outside metro areas. He has heard that UPS might be ready to do the same thing. He says that most of the profit in these ” fast services” was documents like contracts and mortgages and without those ( now done online) the service is not profitable away from dense areas near big airports.
    So if you want anything but junk from Amazon fast, ,your may be out of luck if you live in Bend or Palm Springs. This might only be an inconvenience for retail customers but will be huge for rural hospitals, farm equipment dealers and startup tech business’s that located near the ski slopes or surfing.

    • Petunia says:

      I have seen the slow down in the last few months. I buy from a couple of sites that are super fast shippers and they have doubled or tripled the delivery time frame. Many are also switching to USPS for the last leg or the entire shipment.

      • NYguy says:

        I live VERY remote now, as in Oconus. I ordered some stuff off amazon last wednesday, shipped in 2 batches and first arrived yesterday and second today – thats fast. Speed has always been a gauge of how consumption is going and it seems to be pretty low right now.

        As others have said, this nation has waaaay too much retail space, so losing 25% or more wont really affect much in my estimation. We could use a bit more quality and a bit less quantity. And especially in our diets.

  25. Anon1970 says:

    In 1974, retail investors got burned badly by mortgage REITs, foisted on them by retail stock brokers. The more things change, the more they stay the same

  26. gametv says:

    This mall armageddon is happening at a time of massive consumer spending. Think what happens once we go into a deep recession.

  27. SoCalBeachDude says:

    FT: Elon Musk’s refusal to pay rent adds to Goldman Sachs bad property loans

    The value of loans to commercial real estate borrowers (CRE) behind on repayments climbed 612 per cent in the first quarter to $840mn, according to reports filed by Goldman’s licensed banking entity with the US Federal Deposit Insurance Commission.

    That was much higher than the rise in delinquent CRE loans reported by the entire US banking industry, which were up 30 per cent over the same period to just over $12bn, according to Bankregdata.com, which collates the FDIC reports.

  28. MrMagoo says:

    Malls, Brick and Mortar, have been failing since 2007.
    Ecommerce is more coinvent. Retail inventory is limited.
    So easy to order from Amazon, delivery in 24 hours.

    Retail theft is not the whole problem, but is still significant, IMO.
    Especially in liberal cities where Law Enforcement will not prosecute offenders.

    Off topic – Why are the Markets flying to da moon ?
    Too much liquidity or Short Covering ?
    NASD and S&P seem to be lead by fewer and fewer stocks.
    Maybe everyone knows the FED will pump Liquidity when needed ???
    BlackSwans are on vacation, until they aren’t.

    • vecchio gatto veloce says:


      “Retail inventory is limited.”

      Last month, REI Coop had a sale for members. I looked online for the bicycle tire I wanted at the discount price, and saw that there was one in stock at the store I’d be traveling by on another errand. Got to the store, no tire in stock. There were a lot of customers shopping inside I noticed.

      But on orders over $50, REI will deliver it to your door via USPS for no charge. Two days later, that same tire is at my front porch for the same price. REI had another promotion last week. Yup, a matching tire was delivered to my porch yesterday. (One item at a time on the discount promotion)

      I like it, and it is convenient. I would think it would be less expensive to stock the stores than use the post office for delivery on a $60 product. And, as a result, I’ll probably not be stopping into an REI store anytime soon, since it’s cheaper and easier to order online with their free delivery.

      The REI store in Bloomington, Minnesota is a very nice place. I’m sure it’ll stay strong for many years.

  29. William Leake says:

    I doubt if many commenters on this site take seriously anything businesses say who have messed up big time (the MSM word is underperformed), especially when making excuses for their poor performance. Downtown San Francisco is only interesting because it was once the premier shopping district in California (Wilshire Blvd in LA was also right up there), and because it has fallen so far. It reminds me of that poem Ozymandias by Shelley.

    “And on the pedestal, these words appear:
    My name is Ozymandias, King of Kings;
    Look on my Works, ye Mighty, and despair!
    Nothing beside remains. Round the decay
    Of that colossal Wreck, boundless and bare
    The lone and level sands stretch far away.”

  30. Trevor L says:

    Thank you for this article, Wolf. Conservative media is full of ridiculous articles blaming the closing of large department stores and malls on the politics of certain locations. And yes, there has been a surge of crime and other unsavory behavior in many of these places, but these media entities fail to look at the big picture. CRE has been massively over invested because of loose monetary policies of central banks, and malls and large department stores are closing all over the country.

    Thanks for a sober look at the overall situation.

  31. Redneck_Millionaire says:

    Trevor “Conservative media is full of ridiculous articles blaming the closing of large department stores and malls on the politics of certain locations. ”
    YEP, there sure is partner. As many on the right as the left. I even heard the other day, some fellers thought Limited Government could be a reality.

  32. Micheal Engel says:

    e-commerce is losing thrust. Between Q1 and Q2 in 2020 e-commerce was up from 160 to 213, a tsunami of tp, games and other bs. Thereafter,
    in the next 11 quarters it’s up to 273B, or 60/11 = 5.5B/Qt.

    • John H. says:

      Informative article on shopping mall devolution, Wolf.

      You’ve mentioned (as in several past mall articles) that the bag-holders on much CMBS issuance are pension plan and bond mutual fund operators (held widely in corporate retirement plans).

      How important is corporate sponsored retirement plan income to US economic health?

      Does this load of troubled mall debt impact Pension Benefit Guarantee Corp in any meaningful way?

      Thanks for your work.

      • John H. says:

        Oops- this message was not meant to have been in response to Michael Engel (whose comments I enjoy!)

  33. gaston says:

    Why does anyone care if malls die or thrive. It’s business. Let the consumer choose as they always have.

    And ironically, going back to Sears catalog retail model. Can even buy a house on Amazon. Maybe in 100 yrs the grandkids will tour those “cute Amazon houses” ala Craftsman’s

  34. TL_in_FL says:

    Benderson is building like crazy around Sarasota FL. Malls, indoor and outdoor, big rowing center. They seem to be an outlier.

  35. Micheal Engel says:

    1) The Fed will not hike in order to cut. Investors might park their money in the “2Y hotel” for yield and capital gains. The “2Y hotel” might drag the 10Y down.
    2) TNX 1M backbone #3 : Oct/Dec 1979, 11.02%/10.13%. BB #3 sent the 10Y to 15.84 in Sept 1981, to the peak.
    3) TNX was downhill til 1986/1987. The Jan/Oct 1987 Anti BB reached
    10.23% in Oct 1987, breached the BB but lost it’s grip. TNX was downhill until Oct 1993. It tested the Anti twice, but fell on it’s *** all down until Oct 2008, when the Fed controlled of the frontend, the long duration and mortgage rates for funfunfun.
    4) TNX BB #1 : Feb/Apr 1966, 5.02%/4.66%. // BB #2 : Oct 1969 hi/lo,
    5) In Oct 2022 TNX reached BB#1 but lost it’s grip. Can TNX pop from #1 to #2 and #3. No : TNX is too old with bad knees and hips…

  36. Brendan says:

    Just posted this on my LinkedIn profile. “That’s the future of malls.”

  37. AV8R says:

    Why is irrelevant.

  38. Joe says:

    Meanwhile, As wolf and others here said. All over the news media “inflation is coming down” “lowest in..” and no mention of the base effect anywhere.

  39. TK says:

    Wow lot’s of comments. I live near the PA Montgomery Mall. It’s been going obsolete for years. Plus the traffic is so bad now, compared to 20 years ago, that we avoid that area completely. Same goes for other malls in the region. When these malls were built, the highways were wide open. It was fun at the mall as they had everything. But Amazon is better and has more than everything. It takes too much time to get to and park and go walk around the mall. As for Kohl’s, my Wifes previous fav, it was bought and pillaged by PE. No more sales or special sales to loyal shoppers. Plus the quality of merch is now marginal.

  40. Seneca's Cliff says:

    Both WFH and the Ecommerce are to blame but the reduction of people on the streets of SF is dramatic. Last night I was watching an old low-budget Chuck Norris movie from 1981 ( eye for an eye) set in San Francisco. The reason low budget is important is they did not have the money to shape the entire movie-scape to their liking and fill it with extra’s so in the background everything is as it was in 1981 in the middle of the worst recession of that time. The Market Street Bart station was packed wall to wall as were the trains. Up above ground it was raining but people still packed Market Street ( and not a tent in sight). In every direction there was the kind of hustle and bustle that is unusual today. So e commerce kicked the brick and mortar stores in the behind but the vacant streets (in comparison) are finishing them off. Hopefully when it all crashes rents will once again be cheap and the space can be filled with a new generation of home grown business’s that thrive on cheap rent and location that will be great once again.

  41. Cd says:

    More room on shelves, Instapot be restructuring

  42. eg says:

    Of the it’s not San Francisco, but aren’t you used to being lied to in the US about everything by now?

    And to what extent does the long running “Mallpocalypse” foreshadow further commercial real estate pain, primarily the office sector?

  43. Beardawg says:

    2nd article in a couple days defending San Francisco as a beautiful city (which it is). I agree with many of the comments RE a “narrative” that somehow needs to be pushed by media sources. That is a worthy subject in an of itself !! Saw a mainstream media headline article on Anna Nicole Smith 2 weeks ago. It’s the 3rd time in 12 years I’ve seen ANS pushed into the headlines as a distraction from something insidious. I believe (this time) it was the debt ceiling debates and the heat rising on the Hunter / Joe Biden China stuff.

    Like you Wolf, I’ve come to embrace those narratives when it comes to stereotypes. I am not a world traveler, but travel a lot in the USA – and there’s joy for everyone – you just gotta find your tribe. I live in AZ in the SUMMER – and 98% of the people I tell this to (in casual convos) look at me like I am a freak. I live in the temperate AZ mountains and it is a hidden paradise (don’t tell anyone). Like the Chicago guy too – I get asked how many shootings there are in my “open carry state” and asked “what kind of truck do you drive.” I don’t get miffed – I chuckle and continue to chat, learning more about my conversation partner and offering to break down stereotypes when it seems appropriate.

  44. Beep Beep Toot Toot says:

    Amazon cuts 9,000 more jobs, bringing 2023 total to 27,000


    • Wolf Richter says:

      1. That’s outdated – from March

      2. After hiring about 800,000 people during the pandemic, LOL

      2. Nothing to do with retail. You shoudda read the article you linked!!! This is what it says:

      “The job cuts announced Monday will hit profitable areas for the company including its cloud computing unit AWS and its burgeoning advertising business. Twitch, the gaming platform Amazon owns, will also see some layoffs as well as Amazon’s PXT organizations, which handle human resources and other functions.”

  45. Ole coach says:

    Like woody Guthrie wrote long ago some men will rob you with a gun and others with a pen.

Comments are closed.