2 Mall Landlord Giants File Chapter 11 Commercial Real Estate Collapse, JP Morgan Warning Sell Tech

Selling Real Estate
2 more major mall landlords have filed for bankruptcy as customers avoid shopping malls and make plans to reduce spending. We have been warning about the trouble brewing for commercial real estate and these two landlords combined cover 87 million square feet of floor space. We might need to start some kind of cash for clunkers program for vacant box store retailers, malls, and hotels that would offer “buy backs” for unwanted vacant commercial real estate. The real issue is the problem is accelerating and many landlords and retailers themselves are beginning to get laser-focused regarding cutting costs and are fine-tooth combing their brick and mortar locations to determine which ones they will keep open and what doesn’t make sense and many industry experts are saying the same. simply put “There’s too much retail real estate in the U.S.,” according to a REIT equity analyst. “Retailers continue to reduce their store footprints, and while brick and mortar is here to stay, the focus is on high-quality locations.” and the missing point is the definition of high-quality location has really changed over the past year, and in some cities it’s nearly impossible to operate. Even some of the malls which had sound balance sheets before the recession are finding harder to make it with such dramatically reduced demand and a lot of consumers changing their spending habits to cut brick and mortar out of the mix.

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