"How does having a mall close to your neighborhood impact RE values?"

By
Home Builder with CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS 521400, 1501015, 01795582

"How does having a mall close to your

neighborhood impact RE values?"

 

I asked the question below in a previous post right after this past December's "Black Friday" and was surprised to realize how many folks were relatively Pollyanna and/or indifferent about what is starting to look like a looming reality. 

 

"I'm seeing the numbers coming in from Wall street already about this holiday's sales numbers. Black Friday had over 2 billion in online sales and they hadn't even tabulated what on-site store sales were but it wasn't looking too good.

The reality is that this is nothing new. In house store sales have been suffering for the past decade or so while online sales i.e. Amazon have been soaring along with the stock. 

What would happen to RE values in your particular neighborhood should malls start closing down? What do you think might happen to the RE that those malls were built on? The residential and commercial real estate in and around those malls?"

 

Anyone wish to pontificate further on my previous question? Have you been keeping your eyes on the news lately?  

 

If you've been paying any attention to the financial news during this rather brisk and eye-popping 2017 Week One roll out you would know that almost all the major retailers (anchors of most major "Regional Malls") across the Country suffered an appreciable downturn in sales and foot traffic this past holiday season.

 

In fact 'Macy's' just announce that it will be closing upwards of 60 of it's stores causing about 10,000 job losses. Additionally, major anchors like Nordstoms also announced major downturns and Wall Street has been showing nothing but red across the board for most major retailers. Well, guess who buys and rents the houses and apartment complexes that support these malls?

 

Add to that the anomaly of unruly 'TEXT' induced mobs breaking out across the Nation leading to violence and near rioting in 15 malls this past week. Then factor in an aging 'Baby Boom" generation who would prefer to sit in their easy chair from the comforts and confines of their humble abode and spend their $$$ online with the likes of 'Amazon' and other up and coming "Cyber Malls" and you've got a formula for a retail paradigm shift into a whole new way of shopping.

 

My feeling is that if major malls start losing their Big Name anchor stores we will be witnessing a new trend of eventual mall closure which will definitely have an impact on the local commercial and residential real estate that supports them. It's just common sense. 

 

Sure this real estate will eveuntually become re developed with higher and better use. But how many years will it lie fallow before this shift takes place? All we have to do is look at Detroits once vast industrial complex for answers.

 

Your thoughts?

 
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John DL Arenden, Broker 

TAG Real Estate Sales & Investments

TAG (The Arendsen Group) Real Estate Sales & Investments is a full service, one-stop, turnkey, family owned and operated real estate brokerage, General Contractor, Manufactured Home Contractor, Developer, Investor, Property Manager, Interior Design, Engineering, architectural, Landscape design, Expert Witness, Consulting, Curative Title and Troubleshooting company with over 100 years of combined experience in the San Diego real estate sales, construction, design & development arena.

 

 

 

 

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Rainmaker
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Li Read
Sea to Sky Premier Properties (Salt Spring) - Salt Spring Island, BC
Caring expertise...knowledge for you!

Demise of retail malls are just one more example of the societal changes still rapidly underway...technology has totally changed consumer habits.

Jan 06, 2017 09:50 AM #1
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John DL Arendsen
CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS - Leucadia, CA
Crest Backyard Homes "ADU" dealer & Contractor

Very well stated Li Read I will be folloing you from now on. Thanks!

Jan 06, 2017 11:29 AM #2
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Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

I suspect this will be a question that comes to a lot of people's minds in the future.  News yesterday addressed the closing of many of the Macy's, Kmart, and other stores.  

Jan 06, 2017 04:21 PM #3
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John DL Arendsen
CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS - Leucadia, CA
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Nordstroms among them Myrl Jeffcoat Happy New Year. May the forece be with you!!

Jan 06, 2017 05:19 PM #4
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

What we're seeing in our newer neighborhoods in open air plazas with smaller shops being popular.  Our local mall is unimpressive.

Jan 06, 2017 06:03 PM #5
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John DL Arendsen
CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS - Leucadia, CA
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Small is beautiful Chris Ann Cleland 

Jan 06, 2017 09:13 PM #6
Rainmaker
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Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker

I just wrote about Ala Moana Center here in Honolulu. It's totally remodeled and has the most high end brands in it. These are making a statement here in Honolulu, as in "London, Paris, New York, Honolulu". Luxury condominiums are springing up within walking distance with million to $43 million condos being purchased by people around the world. Even Foodland, the "grocery store" is not your mom and pop of old (I wrote about that as well a couple of days ago). Crazy. So where many (most?) walk-in retail stores are closing, this particular one is flourishing to say the least.

Jan 14, 2017 09:35 AM #7
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John DL Arendsen
CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS - Leucadia, CA
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That really comes as no surprise Hella M. Rothwell, Broker/Realtor® Hi end neighborhoods breed high end malls. In fact most areas in the path of progress or in spendy neighborhoods will most likel always do well.

However, that stated, if we start seeing a lot of Macy's, Nordstroms, Foot Lockers and other anchors start closeing their doors in middleclass America there will no doubt be some mall closures and redevelopment for higher and better use.

We're regular visitors to Wiki Waky and have several friends who have moved there or have lived there all their lives who regularly visit Ala Moana. As for me I could care less if I ever set foot in a mall anywhere on the planet ever again.

My lovely wife has been doing all her shopping via Amazon and other online malls for years and avoids malls like the plauge while her sister lives within walking distance to Fashion Island in Newport Beach and walks the mall daily for excersise and never misses a sale or an opportunity to consume.

Bottom line? We still have our options don't we. 

 

Jan 14, 2017 11:12 AM #8
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