TCO - Malls Aren't Dying Mall REITs Just Have Too Much Debt
If you extend the hyperbole of the so-called retail apocalypse to its logical conclusion, every physical store in the world will eventually be shut down. Does that sound reasonable? Probably not, given that humans are inherently social animals. That's why investors need to step back and question the story here. What's really going on with the American mall is a little deeper than what the histrionics around online shopping suggest.
The first thing to accept in the retail space is that the consumer shift toward online shopping is a very real trend. It has been particularly hard for enclosed malls and the stores that occupy these often massive facilities because apparel sales have been especially susceptible to the shift toward online buying. The smaller specialty retailers and anchor tenants that fill enclosed malls lean heavily toward apparel. It's not surprising that these retailers have been hit hard, with some once-iconic names facing material headwinds or even falling into bankruptcy.
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