Appraisal Matters

At this point, the mall has lost one, and more likely, more than one anchor.  The higher-end national tenants have left or renegotiated their leases to the detriment of profitability for the owner.  The landlord has or is considering taking on obvious temporary tenants and the future of the mall is uncertain.  Along comes the [...]

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At this point, the mall’s competitiveness has declined enough for all to see.  That’s not say that it isn’t viable… it’s just not the investment vehicle it used to be.  The cash cow has been put out to pasture.  The regional mall is at the critical stage where it either lives or dies.  It makes [...]

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Now we’ve lost one or more anchors from our regional mall.  Pedestrian traffic is down.  The dollar amount of sales drop for certain stores such as those that were synergistic with the lost anchors (the best example being fashion or clothing stores that are synergistic with a major department store).  Tenants are talking.  Who’s going [...]

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So the grand opening of the new mall is complete.  Some tenants at our subject mall may have left.  Some may be in the process of leaving.  Typically, the vacancy with inline bays is not sufficiently material to be noticeable to the public.  What is noticeable, however, is the loss of one or more anchors.
Stage [...]

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Continuing from Part 1, we have five more secrets to regional mall tax appeals.
Rule # 6 - Welcome to the World of Investment Grade Real Estate

Sure, the first tier regional and super-regional malls are the prize of REITs.  However, when you look at the ownership of second and third tier regional malls, something stands outs.  [...]

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Over time, regional malls and other types of shopping centers go through a life cycle.  This has been discussed in professional journals, so it is no secret.  I’d like to put my spin on the topic to address what life cycle means to profitability and market value.
Pre-Stage 1 - The Catalyst…
Before I address the “decline [...]

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We’ve all gone to many regional malls in our lifetimes.  They don’t appear to be mysterious or difficult to comprehend.  There are lots of articles about them and malls are always in the news somewhere.  The income and expense statements are made available to Assessors and market value is all based on the income approach.  [...]

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Theatres are an integral part of a regional mall.  They draw huge numbers of people.  We have a great example of that in Arundel Mills, a racetrack-designed super-regional mall.  During weekends (typically the peak shopping days of the week), almost all parking spots will be filled around the theatre and extending for some distance away [...]

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Older regional malls face a quandary.  They need to be renovated to keep competitive with newer regional malls, yet this is a very expensive proposition that rarely is financially feasible.  That’s the Catch 22.  Even with good demographics, there are certain typical realities that prevent older regional malls from going forward that are recognized by [...]

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As the current recession gets deeper, its effects become more obvious and well known.  We’re used to seeing lots of discount signs in store windows that disappear when things get a little better, only to appear again when retail sales soften. Back and forth, back and forth. Vacancies can increase too.  These are just the [...]

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It’s easy to see what’s going on with retail and regional mall vacancy rates - just Google and read articles posted on line.  What if I said that everything all the media outlets are telling you about retail vacancy rates is dead wrong?
I know what you’re thinking.  A regional mall’s vacancy rate is easy to [...]

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A regional mall’s temporary tenant is a sure sign of either a weak retail economy or that the mall is in a declining competitive position.  You’ve seen lots of these and probably haven’t really noticed that they are temporary tenants.
How do you spot a temporary tenant?

The level of finish inside is of a materially lower [...]

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Marketability
An inline-only mall has very different marketability than an anchor-owned mall. Large mall owners and REITs have less interest in this type of investment vehicle and it does not fit into their acquisition strategies. National mall owners do not consider this type of investment, generally limiting the market to local only. Most of the market [...]

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Over the past decade, a trend in regional mall ownership has been becoming more common. Owners can sell some of the anchor sites to the companies that use them and when they sell all of them, the remaining portion that is left is called the inline-only mall. Investors in malls have seen this as a [...]

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