Record bankruptcy a taste of troubles ahead
(Source: Edmonton Journal)
Is that ubiquitous symbol of rapacious U.S. consumer culture — the shopping mall — set to go the way of the dinosaur?
Not likely. Despite crushing economic challenges, the U.S. is still the world’s biggest retail market, with annual spending of nearly $4 trillion US. Malls with strong anchor tenants in upscale markets will continue to do well.
Still, a major shakeout is well underway as the recession grinds on, and it seems clear that the heyday of America’s credit-card-driven mall culture is over, most visibly in hard-hit markets like Las Vegas, Phoenix, or Detroit.
Hundreds of major shopping centres have already been closed, bulldozed or converted to other uses across the U.S. Thousands more are struggling with rising vacancy rates, as retailers shut their doors at an alarming rate.
It’s been three years since the last major new mall opened in the U.S., and the single major project that was slated to open this year — in New Jersey — has been plagued by delays and financial question marks.
While cash-strapped U.S. consumers sit on their wallets — retail sales fell 1.1 per cent in March as the U.S. jobless rate jumped to a 25-year high — many shopping-mall operators are facing financial crisis.
Thursday’s bankruptcy filing by Chicago-based General Growth Properties — the second-largest shopping mall owner in the U.S. — underscores the huge challenges facing America’s commercial landlords.
Read Gary Lamphier’s full article “Final clearance for many U.S. malls” in the Edmonton Journal (April 18, 2009).