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Trainwreck in a bottle
Old 10-05-2008, 09:52 AM   #1
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Trainwreck in a bottle

I had an interesting experience the other day.

We have an older mall not far from the house. Its a winery that about 30 years ago added on a bunch of contemporary (for the 70's) retail space. They put in a couple of restaurants and a bunch of pretty decent little stores. Kayak store, bike store, high end toy store, a little deli, hairdresser, nail salon, news...the usual stuff. All the stores seemed to do okay but it didnt look like they were really pulling in the dough. Mall is a little out of the way and there arent any major anchors.

We hadnt been there in about 8-9 months so we stopped by so Gabe could play in the toy store for a while and maybe pick up one or two things.

The mall was empty, except for the toy store which was in the process of moving. An absolute ghost town.

Turns out a developer bought the property a year and a half ago with the intent to build some high rise condos on the land and remodel and upscale the mall.

Obviously that isnt happening now. Then some guy drove his car through the middle of it in a Blues Brothers maneuver and stole the freestanding atm doing a lot of damage. The property was underinsured.

Then the new landlord raised all the rents, so half the stores went out of business and the other half moved to various empty low cost brand new retail locations in high traffic areas.

A case study example of how bad circumstance and bad decisions can meet to make a mess.
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Old 10-05-2008, 11:49 AM   #2
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Old 10-05-2008, 11:57 AM   #3
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It was incredibly weird to walk into that mall and see the lights all dimmed and the stores all emptied out. Surreal.
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Old 10-05-2008, 01:23 PM   #4
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Sounds like the mall needed a zombie plan!

Our neighborhood is in the process of becoming deserted. In our immediate area we are at about 10% vacant and at risk of becoming closer to 20%. Three of us got together yesterday to lay out plans for a neighborhood watch. Two of us are going to set up some web cams as well and record street activity. Hopefully we'll catch the vandals in the neighborhood. Our car, along with several dozen others, were broken into a couple weeks ago. Last week it was blanket egging and TP-ing with some other minor vandalism thrown in. Some how we missed getting hit on that run.
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Old 10-05-2008, 02:52 PM   #5
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Sounds like the mall needed a zombie plan!

Our neighborhood is in the process of becoming deserted. In our immediate area we are at about 10% vacant and at risk of becoming closer to 20%. Three of us got together yesterday to lay out plans for a neighborhood watch. Two of us are going to set up some web cams as well and record street activity. Hopefully we'll catch the vandals in the neighborhood. Our car, along with several dozen others, were broken into a couple weeks ago. Last week it was blanket egging and TP-ing with some other minor vandalism thrown in. Some how we missed getting hit on that run.
Sorry to hear about this Laurence. It is distressing to be in that situation.

Ha
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Old 10-05-2008, 02:58 PM   #6
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It was incredibly weird to walk into that mall and see the lights all dimmed and the stores all emptied out. Surreal.
All the malls will be like this in a few months.
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Old 10-05-2008, 03:30 PM   #7
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Sorry to hear about this Laurence. It is distressing to be in that situation.

Ha
Thanks, so far the neighborhood doesn't feel "unsafe" but who knows. Alarm system, high end security door, upgraded deadbolts, and good relations with the neighbors all help.
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Old 10-05-2008, 03:49 PM   #8
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All the malls will be like this in a few months.
I think that depends on how smart the commercial landlords are. So far they're trying to hold onto their rents and thats just not going to work when there are a brazillion empty brand new retail pads sitting across the street with a big supermarket, a major restaurant or both right across the lot drawing in customers.

Theres a strip mall not far from here, another one thats been around forever and was the only shopping in the neighborhood before 2003. A couple of the stores in there left already and my wifes favorite hairdresser and our gym are in there. Both asked for a rent decrease and got turned down. Both are moving across the street for lower rent, more space, brand new facilities and will be adjacent to a big supermarket instead of a pizza joint.

At this rate that strip mall will be empty too.

Its sort of weird to see construction outfits cranking out more retail/commercial space when there are tons of new, never occupied spaces all over the place. But I suppose...what else will they do? Sit home and stare at the floor?
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Old 10-05-2008, 05:10 PM   #9
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I think that depends on how smart the commercial landlords are. So far they're trying to hold onto their rents and thats just not going to work when there are a brazillion empty brand new retail pads sitting across the street with a big supermarket, a major restaurant or both right across the lot drawing in customers.

Theres a strip mall not far from here, another one thats been around forever and was the only shopping in the neighborhood before 2003. A couple of the stores in there left already and my wifes favorite hairdresser and our gym are in there. Both asked for a rent decrease and got turned down. Both are moving across the street for lower rent, more space, brand new facilities and will be adjacent to a big supermarket instead of a pizza joint.

At this rate that strip mall will be empty too.

Its sort of weird to see construction outfits cranking out more retail/commercial space when there are tons of new, never occupied spaces all over the place. But I suppose...what else will they do? Sit home and stare at the floor?

Somebody is taking a bet the rent they can get will equate to a smaller loss than their sunk costs if they walked away. Either that or "we got enough to cover payroll for Joey, Bobby, and us for six months before we go 90 days past due on all our bills and are closed down..."
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Old 10-05-2008, 07:24 PM   #10
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Its sort of weird to see construction outfits cranking out more retail/commercial space when there are tons of new, never occupied spaces all over the place. But I suppose...what else will they do? Sit home and stare at the floor?
DW and I have been talking about this for years, the fact that they never seem to redo shopping center spaces, they just build new ones. I guess there must be a financial reason for it, but it doesn't make sense to us. There's a slow life cycle to these malls/centers, but over my lifetime I've seen it happen quite a few times.
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Old 10-05-2008, 09:54 PM   #11
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harley.. you are right! I remember seeing even years ago structures that were abandoned "small box" stores just sitting empty.. huge (still lighted) parking lots, etc. I don't know who was paying the electric but maybe it was on for liability reasons.. but I'm talking years of vacancy. I could never figure out why someone couldn't make those spaces viable again rather than starting from scratch.
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