Smaller malls were struggling even before COVID hit.
But as the pandemic caused mandatory shutdowns, shoppers avoided indoor spaces. It should be no surprise then, that the percentage of all retail loans on Moody's Analytics watchlist or in special servicing has risen to 37%. Delinquencies and late payments are almost nearly 13%.
But some retailers and mall owners are struggling more than others. While the malls that came into 2020 on firm footing still have a future, malls that are no longer destinations are struggling. Moody's says 250 or so malls had occupancy troubles before the pandemic and are continuing to face challenges. Many of these properties were built nearly a half-century ago and are in lower- to mid-income submarkets.
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Leslie Shaver
Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to GlobeSt.com and Real Estate Forum.
