Vacant mall (Credit: Wikimedia Commons)
It’s real estate’s equivalent of dying gracefully.
A high number of mall tenants are choosing to quietly bow out of their space at the end of a lease, instead of breaking it.
A report by Green Street Advisors found that 979 of 2,468 in-line retail stores (non-anchor tenants) that closed in 2017 chose to do so quietly by not announcing their closure and simply not renewing leases. That’s in contrast to “doing something a bit more aggressive” like breaking a lease, Green Street ‘s Jim Sullivan told Bloomberg.
The study looked at the top 25 national in-line retailers closing retail locations. The closure of in-line tenants can be a bellwether of financial problems at a property, Sullivan said, because they typically pay higher rents than anchor tenants, which are seen more as a customer draw than a revenue generator.
Leading the exodus are women’s fashion retailers Wet Seal (closed 204 stores), BCBG (closed 200 stores), and The Limited (closed 196 stores). Those quietly leaving spaces without announcements include Stride Rite and Hallmark, which together closed 261 locations last year, according to the report.
Across the country, retailers and their landlords are grappling with a more challenging landscape, as The Real Deal reported in May. [Bloomberg] — Dennis Lynch
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