The rise of e-commerce has made abandoned malls more common all over the United States. Still, overseas agencies are snatching up these shopping centers and turning a profit — much to local distaste. This article breaks down how the shops make money and why the community wants to keep them buried.
Buying Abandoned Malls and Selling the Parking Lot?
As many consumers have noticed, big chains are closing physical stores at a faster pace than ever before. And, this retail apocalypse shows no signs of slowing down…
BUT, SOME INVESTORS WANT TO DRAIN EVERY OUNCE OF LIFE — AND DOLLAR — FROM ABANDONED MALLS AS THEY ROT.
Wallstreet Journal Podcast, “The Journal,” recently covered one such agency — Namdar Realty Group. The group has purchased deserted plazas in several states including Florida and Pennsylvania.
So, how do groups like these profit from these properties with fewer tenants and foot traffic? The idea in and of itself is simple and admirably clever…
Investors buy the shopping centers for millions less than they would have paid for it in the past…
Then, they sell off pieces of the land piece by piece for a pretty penny…
NAMELY, THE ATTACHED PARKING LOTS.
Typically, when someone purchases a mall — abandoned or not — the space for cars comes with it. Therefore, freestanding restaurants or other retailers must buy the parking lot space from the mall owner!
On top of this, rents continue to come in from the remaining tenants. Additionally, those renters usually pay less for the low-demand real estate.
This all sounds positive. However, we all know what they say about things that seem too good to be true…
Why Locals Want the Shopping Centers to Rest in Peace
Anyone who has seen the movie “Pet Sematary,” knows that dead things never come back the same. This is also true about these abandoned zombie malls.
While these once-popular complexes can’t come scratch at your bedroom window, other problems arise.
Issues that the owners refuse to handle such as:
- Rodent infestation
- Sewage and plumbing leaks
- Structural deterioration
The mall-area residents and government have made their dissatisfaction known. Yet, investors are resistant to doing beyond the bare minimum.
Additionally, the communities are interested in moving on from malls and putting these spaces to better use.
Michelle Bayer who is borough manager in Eastern Pennsylvania shared her ideas.
“Me personally, I think you could put a whole host of things there that would benefit the community. Everything from a mixed-use lifestyle center that has components of residential, maybe educational or medical. An indoor recreation center, so indoor soccer fields, ice skating rinks, things like that. That would be tremendous for the entire county. Anything other than what it is now.”
Both locals and these investment groups have reasons for their views. But, the big question remains…
Is Saving Abandoned Malls Worth It?
Ultimately, if either side gets their way, time and money are required to give abandoned malls a second life.
Dilapidated buildings are hazardous and new projects need capital and upkeep.
But, one thing is certain…
The glory days of Mall Americana are over. We just have to see what will take its place.
Be Great,
GCTV Staff
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