MIKE’S MONDAY BLOG
For thousands of years, dating back to ancient Greece, communities have had a central point where commerce took place, and where goods and services were exchanged and purchased. One way or another, this system has been more or less consistent; but more recently, we have moved away from this physical central location of a marketplace and have instead moved this system into the digital age.
The malls and department stores we all know of really began sprouting up post World War II with completion of the Interstate Highway System being built under the Eisenhower Administration aiding in the expansion of these giant shopping centers. Farmlands were purchased and converted into massive blacktop parking lots and huge buildings that were located outside of city-centers and in the suburban landscapes across the US. From the 50’s up until the late 90’s, these places thrived. In fact, the time frame between 1956 and 2005, about 1,500 malls were built in the United States (2).
Then came the dawn of the internet and things began to go downhill for the malls and department stores. Websites catered to people’s needs in a more personalized and convenient way; something the malls and shopping centers couldn’t compete with. Instead of having to travel outside of your home, one can conceivably accomplish most of, if not all, their shopping out of the comfort of their home.
Foot traffic slowed and the decline of department stores and malls started to become obvious. Within the last 20 years, the efficiencies of websites skyrocketed and the ease of purchasing goods is at an all-time high. You can now order something online, through website such as Amazon, and the item can get delivered to your home the same day. Very few brick and mortar retailers can compete with that kind of services and ease to the consumer.
In its wake buildings with thousands of square feet, that could be used in some capacity, will be vacant. The traditional mall layout is and will be a thing of the past and its businesses will have either migrated to the internet, or simply shut its doors for good. In both scenarios, job loss is paramount. More than 448,000 jobs have been lost at department stores since 2002 (1). This will almost certainly continue at the current pace in the years to come.
Surely not every mall or department store will close its doors, but the ramifications by this mass societal change has an effect on the economy. The internet’s disruptive nature and our unrelenting drive to become more efficient will leave an entire industry, that was flourishing only a few decades ago, behind.
Okay, enough of the doom and gloom, is there anything positive that can happen to these vacant concrete giants? There are a few ideas that have been thrown about, and others have been already implemented. Some of the ideas that are already being applied include things such as high schools. For example, in Joplin, MO following a tornado, the high school moved to their local vacant mall and reconverted it into a fully functioning education center (4). In fact, my own primary care physician has moved from a traditional office space into a huge section of a local mall, which took place a few years ago. Another very interesting idea that I came across are contemporary up-scale apartment complexes. But perhaps the most unique conversion took place in Tennessee. An old mall in Antioch, TN was reconverted into an ice hockey rink and is now used as the NHL’s Nashville Predator’s practice facility (4).
Although traditional malls/department stores will never be able to achieve their old glory days again, creative ideas to reinvent the spaces that they occupy is an interesting business trend that will become more apparent in years to come. Whether that involves the healthcare field, commercial real estate opportunities, or schools, the abundant space that malls provide can be reconfigured and utilized in another capacity that may benefit the communities they inhabit.
I want to extend a big thank you for taking the time and reading my weekly blog. If you have any questions or would like to schedule a sit-down meeting to discuss more of your financial future, please contact me at 610-374-6249 x114 or visit my website mlistmeier.wradvisors.com
This is meant for educational purposes only. It should not be considered investment advice, nor does it constitute a recommendation to take a particular course of action. Please consult with a financial professional regarding your personal situation prior to making any financial related decisions. (12/19)