A recent study published by Reis Inc., a real estate data firm, confirms an ongoing trend in U.S. commercial real estate. Shopping malls are continuing to lose tenants, as American consumers increasingly turn online to purchase items traditionally sold in brick-and-mortar stores.
According to an article in the Wall Street Journal, the Reis Inc. study claims that shopping mall vacancies are at a six-year high. The study is based on an analysis of 77 metropolitan areas in the U.S.
The flight of brick-and-mortar tenants has a number of experts and politicians pointing the finger at online retailer Amazon.com. Just recently, President Donald Trump accused the online giant of paying too little in taxes while “putting many thousands of retailers out of business!” However, the president is not alone in raising alarm over Amazon’s impact on brick-and-mortar stores. Lawmakers in states across the country are beginning to explore possible ways for Amazon to pay more taxes, hoping that such maneuvers will increase the competitiveness of non-online stores.
In addition to the Reis Inc. study, other news has demonstrated a growing problem for shopping malls. Brookfield Property Partners LP, a company that owns and operates thousands of shopping malls around the world, announced that it has reached a deal to acquire GGP Inc. at only $23.50 a share. GGP, Inc. is a publicly traded company with shopping malls around the country. Market experts were surprised to learn how little Brookfield negotiated to acquire the company, a further indication of the fact that brick-and-mortar retailers face a serious crisis. GGP Inc. is also the owner of Cincinnati’s Kenwood Towne Centre.
The fate of U.S. shopping malls, both big and small, may rest with lawmakers who already seem eager to curtail Amazon’s growth. If they successfully slow the rise in online shopping, perhaps shopping malls around the country will be due for a comeback.