News that mall giant General Growth Properties filed for bankruptcy isn’t much of a surprise, given the overall shutdown of retail spending these past few months, along with the total over-storization (that’s my word!) of the U.S. retail market these days. What does it mean for us?
Honestly, probably not much right now. The Galleria, which General Growth manages but doesn’t own, will still be open for business, as will Collin Creek and Stonebriar (here’s a list of all of the company’s Dallas-area properties). The stores that continue paying rent will continue to operate, but I’m sure the malls’ summer promotions and holiday decorations will be toned down somewhat. And I’m sure there will be skimpier toilet paper and more wax-like paper towels in the bathroom dispensers and fewer printed directories in the information kiosks as the mall operator tries to save money any way it can.
Globally, I think it’s safe to assume there won’t be any new malls built for a few years. The collapse of General Growth, along with the on-the-ropes status of fellow retail giant Simon Property Group — not to mention the crippled banking industry — virtually ensures there will be no funding for new malls for quite a while.
The silver lining?
Neighborhood strip centers, whose owners also are feeling the cash-flow pinch, will be more open to smaller chains and even neighborhood startups as they look to fill their space — I think we’ll finally see the buy-local retail movement that people have talked about for so long finally take wing.
Places like Bishop Arts District will become even more appealing for small and medium-sized retailers, as they look for outside-the-box places to relaunch their business amid the general malaise about malls.
And as some more major retailers fall by the wayside, and more and more retail space in the traditional malls goes dark, if you have a small retail business that couldn’t afford the high-dollar mall rent last year, you might want to consider approaching the mall leasing people again.
Your little 1,500-square-foot start-up boutique will look a lot better to the mall accountants this year.