Thursday, April 06, 2017

More Malls

Here is a Washington Post article on the troubles facing malls and retailers.  This passage is a great summary of the current retail environment:
The retrenchment comes as shoppers move online and begin to embrace smaller, niche merchants. As a result, many major chains now find themselves victims of a problem of their own making, having elbowed their way into so many locations that the nation now has more retail square footage per capita than any other. To use the industry vernacular, they are simply “overstored.”
You can add "overleveraged' to overstored to describe the trouble facing many retailers.  I think I am part or the problem because I seek out and shop at "smaller, niche merchants."  It is time to start razing malls and building housing.


Ockham said...

Given your interest in the mall real estate problems, I figured you might find this offering amusing:

Its a Reg A+ offering by a group that traditionally does more Reg D private offerings.
Lots of leverage and affiliated transactions with malls in semi-rural areas.

Rational Realist said...

A sponsor entity issuing unsecured bonds (at only 7% interest!!) is a red flag. And a bond paying nearly 10% in up front offering fees is another issue. The one asset the sponsor owns is 100% leveraged. Nightmare.