For some people, living near a major shopping mall is an important consideration. Even if that is not important for you or your clients, the impact of the pandemic will likely be felt for years to come when it comes to the large shopping malls.
When retailers such as Macy’s and Nordstrom are closing stores and scrambling to secure new financing, the near future for the malls they occupy becomes significantly less favorable, since these are considered anchor stores.
J C Penney has reportedly been attempting to secure new financing as well.
Now, on April 20th comes word that Neiman Marcus is going as far as to prepare to seek Bankruptcy protection all 43 remaining stores along with its 12 “Last Call” stores around the country.
Part of this is that Macy’s and Nordstrom have been looking at borrowing against their real estate holdings. In the event of an eventual default, the result would likely be banks and other financial institutions taking over large portions of major shopping malls.
It is not as though the banks have the know how to implement thriving retail outlets, and that would be assuming that consumers will be willing to again flock to shopping malls once the pandemic is over.
What does this have to do with residential real estate?
That is a question that agents and home owners need to be asking. Many businesses, including coffee shops and fast food restaurants, repair services and specialty retailers, and gas stations, rely to some extent on drawing from the traffic heading to and from a major mall area.
Losing the mall will impact surrounding businesses. If and as they are also lost, the nearby residential community would also suffer.
This is the time to consider the possible impact on residential properties located in what have been busy or even congested shopping mall areas. Is this the time for an investor to get a steal? Or would current owners be forced to lower their price in order to attract bids?
While it is too soon to tell, it is not soon enough to be prepared to do what is best for you and your family.