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2 Local Malls go Bankrupt

Discussion in 'Political Discussion' started by PatriotsReign, Dec 20, 2009.

  1. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Did you know that the Westgate Mall in Brockton and the Silver City Galleria have gone bankrupt this year. The amazing thing is that the Brockton Enterprise used the exact same story headline on both bankruptcies. S

    See below:

    Auction of Westgate Mall won’t affect shoppers

    Auction of Westgate Mall won?t affect shoppers - Brockton, MA - The Enterprise

    Taunton’s Silver City Galleria not affected by bankruptcy

    Taunton?s Silver City Galleria not affected by bankruptcy - Brockton, MA - The Enterprise

    The Brockton Enterprise was trying to convey a "It's no big deal" attitude over these stories in order to help or "not hurt" business at both these malls. But make no mistake, this is a BIG deal. Malls don't go broke everyday.

    Two things are happening in malls across the nation

    1. Leases are too high for retailers who have seen their volume decline by 10-20%.
    2. Consumers are being selective about which malls they choose to shop these days...i.e. The "low-end" malls like Westgate and Silver City have turned to ghost towns

    These two factors will lead to an inevitble commercial real estate crash in the coming months. This isn't an "If" scenario, this WILL happen, so be prepared.
     
    Last edited: Dec 20, 2009
  2. MrSparkle

    MrSparkle Third String But Playing on Special Teams

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    Not to mention the power of on-line shopping. We did 90% of our shopping this holiday season on-line. Right, wrong or indifferent, it's so nice not having to go out and try to find the items in a store. Wait in line, find a parking spot, pay more and every other nasty thing I can't think of.

    I hate shopping and I think I'm hardly alone. Point and click buying has done more damage to malls then even the poor economy IMHO.
     
  3. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    Ownership of the Westgate Mall,,

    Ownership of the Silvership Galleria...

    ProvPlace left out of parent?s Ch. 11 deal - PBN.com - Providence Business News

    Providence Place Mall has been in the middle of this for over a year now..

    Not sure about the others, but Providence Place Mall problems have been going on for a while now.. they filed in April '09....

    CAKE,GGWPQ,JWN Providence Place mall to stay open despite owner's bankruptcy filing

     
  4. efin98

    efin98 Experienced Starter w/First Big Contract

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    It isn't new and has been going on for a while...much longer than the recent economic downturn. What is/was in the malls and what has sprung up around in recent years has had as much if not more of an impact on the malls than recessions.

    Walmart and Target, their direct competitors, have exploded around this area in the last decade to the point that those higher end department store anchored and mom and pop reliant malls have had trouble keeping customers and keeping stores.

    It also doesn't help that the anchor stores to most of the malls have undergone multiple names or owners...for instance Jordan Marsh and Filenes and Bradlees being changed to Kohls and Macys, nice stores but a different clientele than who would normally shop at the previous stores.
     
  5. IcyPatriot

    IcyPatriot ------------- PatsFans.com Supporter

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    #87 Jersey


    All good points effin ...

    Malls suck ... and are a haven for teenagers, bums and weirdos. Nothing short of discrimination will cure that problem. I keep seeing shopping plazas go up all over the place. Malls are out - shopping plazas are in.
     
  6. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    This is just anecdotal, but we made our annual trip to Providence Place Mall on 12/11 a friday @ 10:30 AM... went to the Apple Store which is a relatively small store.. they had no less than 13 people working, and the store was wall to wall people... stuff was moving big time.

    It seems less to be about the stores, but more about the amount of money invested in these monstrosities... and the inability of the company to manage their debt.. they remind me of the working couple who make good money, but are completely upside down in their mortgage... the loan to value is out of whack on these properties..
     
  7. efin98

    efin98 Experienced Starter w/First Big Contract

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    That is the case with those two linked malls' (former) owner but that isn't the case for all of them. Many never revitalize or modernize their malls or do not attract enough customers in the first place.

    Case in point my hometown mall, the former Mystic Mall: http://www.labelscar.com/massachusetts/mystic-mall

    It was never in any financial trouble as they made huge money from their super market, they didn't over-borrow and run up debt. The mall lost the anchor stores with the last one, Stuarts, closed in the early 90s and never recovered. Stores that were in there came and went fast, they simply couldn't sustain themselves in a dying mall with little foot traffic.
     
    Last edited: Dec 21, 2009
  8. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Bankruptcies don't happen in days. A bankruptcy that began in April 2009 is not one "that has been going on for a while" The business community would call that a very recent bankruptcy.

    So my point was that these bankruptcies ARE a big deal.

    I still can't figure out what point you're trying to make Darryl. Can you clarify?
     
  9. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    You're actually dead wrong efin on the Silver City Galleria. It was booming during the last boom. I go there very often since it's the closest mall to me. Walmart and Target have zero impact on malls historically. They are 2 different consumers entirely. They have co-existed for decades.

    The Westgate Mall has had problems for years. No doubt.

    If you Google "mall over-capacity" you'll discover that this recession is THE CAUSE of hundreds of malls being in danger of bankruptcy. Mall over-capacity has not been a problem until this recession started.

    This is in fact a new phenominon.

    mall over capacity - Google Search
     
  10. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    This is the exact point I made. Consumers are being very selective in the choice of malls they shop. They are skipping older, marginal malls in favor of those that are modern & upscale. This is survival of the fittest and the older, smaller malls are going to die.

    BTW, the pending CRE (commercial real estate) crash is a very big deal. Malls are just the tip of the iceberg.
     
  11. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    The point is quite simple, the Providence Place Mall and I assume the other malls are high priced operations who were bought high, now that the market has come back to earth they are upside down..
    '
    It is about overpriced real estate...
     
  12. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Yes, you're correct. But not only are Mall owners upside down, the retailers at these malls are experiencing significant declines in business revenue. Even retailers inside malls like Emerald Square, the South Shore Plaza and Providence Place are experiencing significant declines in revenue.

    Even if it appears there are as many shoppers "as ever" strolling through them, people aren't spending as much over-all.
     
  13. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    Do not know about the spending.. gee thank you for telling me I am correct, from the resident expert who knows everything about nothing...
     
  14. efin98

    efin98 Experienced Starter w/First Big Contract

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    The mall hasn't had problems, the owner had them. That's why that mall was one of the first sold by PPG to pay off PPG's debt.

    However that isn't the case for all of them. There are many that shuttered for other reasons especially the ones I listed.

    The economic situation had an indirect impact and is getting a quick blame but the problems have been going on for years. Simon Property Group had problems financially five years ago to the point of bankruptcy, before the recession hit. They have rebounded but not out of the woods yet.
     
    Last edited: Dec 21, 2009
  15. efin98

    efin98 Experienced Starter w/First Big Contract

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    That isn't the case with all of them though.
     
  16. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    I said you were right about "part" of the reason for mall bankruptcies. If you actually read my posts, I often say I don't know much about "x" to comment. Which is why you won't see me commenting in the "Global Warming" threads. But in the case of malls, yes, I do have a firm grasp on why many will go bankrupt AND close.

    Why, does that bother you Darryl?

    I have no desire to learn or know a lot about a lot of things. I love learning a lot about the things that interest me though.

    Just to set you straight moving forward. I know a lot about economic issues and REAL lot about my specific areas of employment which includes consumer behavior and it's effects upon various aspects of our economy. Can you dig it Darryl? :D
     
    Last edited: Dec 21, 2009
  17. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    If a mall was built 20 years ago when real estate was relatively cheap, then there is no reason for it to be upside down. But if they can't fill the mall with shoppers, what good does that do the owner(s)?
     
  18. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    No cannot stand self absorbed, self ighteous idiots.. personally that is my bane.

    What is the sense of discussing or posing questions if you know the answer... imo that is f..ing stupid.
     
    Last edited: Dec 21, 2009
  19. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    This is a national trend, not a local one. I used these 2 as examples. Here's a great article that explains THE causes.

    The vanishing shopping mall

    Enclosed shopping centers, clobbered by the recession, are closing by the hundreds. Is our love affair with the mall over?

    Are malls dying?
    The vital signs are not good. Even before the recession hit, consumers had developed mall fatigue, and the classic enclosed shopping mall was in decline. More than 400 of the 2,000 largest malls in the U.S. have closed in the past two years. The last new major mall in the U.S. opened in 2006, and only one big mall is scheduled to open this year—the troubled Xanadu mega-mall in Rutherford, N.J. (See below.) With some 150,000 retail stores projected to fail in the U.S. this year, more mall closings are imminent. Mall mainstays such as Mervyn’s department stores, Linens ’n Things, and KB Toys have already disappeared into bankruptcy, and mall vacancy rates topped 7 percent last year, the highest level since 2001. “It’s an absolute disaster,” says Howard Davidowitz, an investment banker specializing in retailers. “What a mall represents is discretionary spending, and discretionary spending is in a depression.”

    Is it really that bleak?
    The data suggests that it is. For decades, American consumers could always be counted on to spend more than they did the year before—the only question was, by how much. But in the past 12 months, retail sales in the U.S. have dropped an unprecedented 9.8 percent. The economic collapse has landed especially heavily on the old-line department stores, such as Sears and JCPenney, that anchor many malls. As their sales and profits have tanked, they’ve been pulling out of malls, to the distress of the smaller merchants that depend on the larger stores to feed them traffic. The Turfland Mall in Lexington, Ky., recently lost Dillard’s as an anchor tenant, setting off a cascade of closings. “We have no choice but to leave now that Dillard’s is leaving,” says Bill Parker, who just closed his shoe store.

    “The most important fact about our shopping malls,” says social scientist Henry Fairlie, “is that we do not need most of what they sell.”


    The vanishing shopping mall - THE WEEK

    This reader's comment at the end of the article says it all in my OP.

    Posted by Natalie Lumet, Thursday, June 25, 2009, 6:43 pm
    A fitting end to an era of materialistic vulgarity caused by the lure of easy credit and ability to purchase things they can't afford, closed malls are the perfect symbol of America in its current economic condition. Complusive, vacant, and statusoriented, the diabolically relentless pursuit of money that has consumed American egos for bigger cars, homes, and all the stuff they don't need, has finally brought the Temples of Pagan Products crashing down on the whole country and deservedly so for being defiant, arrogant and stupid.
     
    Last edited: Dec 21, 2009
  20. PatriotsReign

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    #18 Jersey

    Neither do I. But don't be so hard on yourself...you're not THAT self-righteous Darryl.

    Had you told me that you actually WENT to Silver City or Westgate, then your comments would hold more water. I go to both and each is a ghost town....period. No shoppers = no revenue which means THAT is the cause.

    You kept using your visits to Providence Place to counter my points....how does that make sense darryl? That's the only mall in a RI's largest city. Of course people will go there.

    So, why isn't anyone going to Silver City or Westgate mall?
     

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