The Next Real Estate Crisis: Shuttered Stores and Empty Malls

[babylonsister]

The Next Real Estate Crisis: Shuttered Stores and Empty Malls

By Paul Craig Roberts, CounterPunch. Posted January 23, 2009.

The 1,120,000 lost US retail jobs in 2008 are a signal that the second stage of the real estate bust is about to hit the economy.


For a picture of the US real estate crisis, imagine New Orleans wrecked by Hurricane Katrina, and before the waters even begin to recede, a second Katrina hits.

The 1,120,000 lost US retail jobs in 2008 are a signal that the second stage of the real estate bust is about to hit the economy. This time it will be commercial real estate -- shopping malls, strip malls, warehouses, and office buildings. As businesses close and rents decline, the ability to service the mortgages on the over-built commercial real estate disappears.

The over-building was helped along by the irresponsibly low interest rates, but the main impetus came from the slide of the US saving rate to zero and the rise in household indebtedness. The shrinkage of savings and the increase in debt raised consumer spending to 72% of GDP. The proliferation of malls and the warehouses that service them reflect the rise in consumer spending as a share of GDP.

Like the federal government, consumers spent more than they earned and borrowed to cover the difference. Obviously, this could not go on forever, and consumer debt has reached its limit.

Shopping malls are losing anchor stores, and large chains are closing stores and even going out of business altogether. Developers who borrowed to finance commercial ventures are in trouble as are the holders of the mortgages, derivatives and other financial junk associated with the loans.

more...

http://www.alternet.org/workplace/121846/the_next_real_estate_crisis%3A_shuttered_stores_and_empty_malls/?page=entire

[midnight]

1. This will be very interesting to see how this side of the market

fairs.

[my2sense]

2. I'm seeing it in my area already

Outlet mall stores, strip centers and regular malls have vacant spaces. We are so screwn.

[babylonsister]

3. Me, too, and it's been going on for over a year in certain areas.

One mall-Pennys and Macys pulled out; too many little stores to mention. Pennys did move to a better location, Macys just ...poof...gone.

[TommyO]

5. A strip mall near where I used to live is drying up

They lost Linens & Things and now they're losing Circuit City, the remaining "big" tenants are Staples and Target, with a Michaels there also.

[CoffeeCat]

4. There's a mall...

...in the mid-sized town (125,000), in which I grew up.

This mall was thriving through the 80's and 90's.

It's now a dead mall. There must be more than 200 spaces for stores. Less
than 20 of them are occupied. The space is being used by the city. There's
a library in there now and many government offices.

At least the space is being utilized.

[DemReadingDU]

6. Dead Malls websites

Dead Malls dot com
http://www.deadmalls.com/


and another...
Retail History Blog
We first started traveling to shopping malls in the late 1990s, and it was during those trips that we were awakened to the beginnings of the death of the American shopping mall. In almost every major metropolitan area, there was at least one white elephant, one center that wasn’t cutting it, one place that for some reason was never renovated and still sported decor from the 1970s. We were fascinated, not only because these malls reminded us of our childhoods but also because it was inconceivable to us then that the almighty shopping mall–a development pattern that had been so dominant our entire lives–could possibly fail.
http://www.labelscar.com/

[BanTheGOP]

7. The ENTIRE BLAME for this mess...

...lies in the policies of the republican party. They are the ones who invested their money into such schemes, pocketing the profits and squirreling them away into their energy portfolios. Now, many good people are screwed out of their investments while the republinist bastards greedily count their money.

I'd love to take an audit of the money. Where is it now, and who holds it?

Answer: Most of it is held by republican bastards. We SERIOUSLY need a new tax overhaul and a complete paradigm shift in how we approach economics in this country, starting with a justified wealth repatriation act.