By: Dennis Norman
Right before Christmas I did a 3 part series on malls and shopping centers in which I expressed my reluctance to shop at them and asked the question: is the mall going to go the way of the dinosaur? Unbeknownst to me at the time there may have been more relevance to that question than I realized based upon some facts cited in an article that came out this morning on the Boston Herald website.
In the article, Donna Goodison says “Burt P. Flickinger, managing director of New York consulting firm Strategic Resource Group, expects 2,000 to 3,000 U.S. malls and shopping center to close in March and April”. She goes on to state “General Growth Properties, Inc., the nation’s second-largest shopping mall owner, is already in trouble.” Now I’m not sure how many malls and
shopping centeres there are in the U.S. but 2,000-3,000 of them expecting to close within a 2 month period sounds huge and very significant. Once again, I would say be thankful you don’t own shopping malls!
I want you to know that I am not a “misery loves company” type of person. While I have personally been impacted by the downturn in the residential real estate world it does not make me feel one bit better seeing the commercial real estate world taking blows now. However I think this once again shows that in the long run for many smaller investors residential real estate is still the way to go. Houses afterall generally do not totally lose their functionality and become something no one has a use for…people always need houses to live in it’s just at times there are price fluctuations as well as a changing market. Sometimes you are better off buying houses for rental and sometimes you are better off buying them to resell them. In this market I would say the former is the way to go. Shopping malls and centers on the other hand, what do you do with 3,000 of them when they shut down?
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What’s up?, just browsing around and dropping you a note to say that I enjoyed your Blog. Keep up with the good work!
THanks for the comment Frank, I appreciate it, Dennis