I agree with that article/analysis/opinion... when I moved to San Diego area in the mid 1980s, they were still building/expanding enclosed malls... we'd go back to Chicago to visit my in-laws and it seemed like every single mall within easy drive of their place was shuttered and empty -- in fact, there aren't any major grocery stores left in the area.
But now, every enclosed mall in San Diego county are "downsizing" -- Macy's and a few Sears still anchor some, but most are now anchored by huge multi-screen movie complexes -- attached, not free standing -- that offer reservable fully reclining seats, food and adult beverage service to your seat, etc. -- bad thing is only military (Camp Pendleton only 5 miles north of our nearest mall) and/or seniors like me can afford tix (love the $5 all-day Tues. thing -- no crowds, kids or other annoyances)... however, that mall, after May pulled out, demolished the free-standing movie complex and is now ripping the roof off of the rest and plans to expand up with residential housing! Don't know how that will work out, but it is creative I suppose.
The famous Horton Plaza in downtown S.D. is closing (it was open air) and will become an expansion to the nearby park... Mission Valley's enclosed mall is about half shuttered... ditto a few other older enclosed malls... however, there is one mall (open air) at UTC near UCSD and the very upscale La Jolla area that is expanding significantly... but the trend seems to be a downward spiral with maybe a handful in the "right" locations surviving by doing things like our local mall.
I was never fond of mall REITs and the only REITs that deal at all with brick and mortar retail that I still like are the triple nets who don't even pay the property taxes, maintenance or remodels, etc... such as O, NNN and WPC... call me crazy, but I still like specific healthcare REITs that mimic the triple net guys, e.g., OHI which only owns the land and bldg, but the operators/tenants pay for everything else... the protection with such REITs, IMO, is being one step removed from actual retail exposure -- they can find new tenants (though that's likely getting harder) if existing ones default on their long-term leases -- which further protects the REITs since there are penalties for breaking the leases, even if the lessors go BK (REIT is first in line along with banks during liquidation)...
And of course, hard to go wrong these days with data center REITs like DLR... one has to be a vigilant stock picker in the REIT sector to be sure. |
