CBL, which finished its Chapter 11 case in November, redeveloped more than 45" />

Malls ditch shopping to fill vacant retail stores


CBL, which finished its Chapter 11 case in November, redeveloped more than 45 properties since 2015 including placing an Aloft Hotel in a property in Chattanooga, a representative said via email. It’s considering mixed-use redevelopments including grocery, hospitality, multifamily, medical, education and offices.

Sometimes repurposing a store just won’t work, so in early in 2020, CBL decided to demolish a defunct Herberger’s in Bismarck, North Dakota, to make way for a pharmacy and restaurants that included a Five Guys and a Chick-fil-A.

“Both at good and bad malls, the best option from a real estate perspective could be developing apartments,” said Vince Tibone, a senior analyst at commercial real-estate analytics firm Green Street. But not everyone can pull this off; converting large spaces requires capital and ample time that operators may not have. Many former Sears stores, for example, are still vacant more than three years after that merchant filed for bankruptcy, Tibone said. A complete overhaul could take a decade, according to JLL’s Maloney.

It’s no wonder, given the weak profit outlook and the reluctance of new tenants to move in. Green Street’s forecast for net operating income growth at even the best malls is modest at 2.1% near-term and 1.3% long term, with negative growth for grade B and C centers.

“The occupancy rates for CBL and PREIT have generally been below average for a long time now,” said Bloomberg Intelligence analyst Lindsay Dutch. “I expect raising occupancy to remain a challenge for lower-quality mall portfolios.”



Source link

Category: Restaurant News

Leave a Reply

Your email address will not be published.