THE FUTURE OF SHOPPING MALLS
A recent study by Credit Suisse forecasts that 20 to 25 percent of malls will close over the next five years – between 220 and 275 properties. Although Class A malls, located near an affluent customer base, are doing fine, Class B & C properties are in trouble. As online sales continue to rise, there is just too much physical retail space in the U.S.
The U.S. leads the world in retail square footage with 24 square feet per capita. Major European economies record only a fraction of that total. Furthermore, on a per capita sales per square foot basis, the U.K., France and Germany squeeze higher sales out of much less space, suggesting a much more efficient allocation of resources.