Money & Finance › Markets of the world › Commercial real estate markets: office, industrial, retail, apartments
Retail real estate: struggling malls, resilient strip centers
· Asset or instrument
Fact, law or dataA rule, statute, definition or measured number.
Shopping property: many enclosed malls lost anchors and value, while grocery-anchored strip centers stayed nearly full.
See it on the Money & Finance map →How it works
Department-store chains such as Sears (bankrupt 2018) and J.C. Penney (2020) closed hundreds of mall anchors, and online shopping drew sales away. Many lower-tier malls lost much of their value and were handed to lenders, while top malls held up. Strip centers anchored by grocers, gyms, restaurants and services proved resilient: little has been built since 2008, so US retail vacancy stayed among the lowest of any property type, about 4–5% in 2025. Leases often include percentage rent and co-tenancy clauses.
Why it matters
It shows how one property type can split in two: tenant mix, anchors and exposure to online shopping, not just location, now decide whether a center survives.
Facts, rules and data
Retailer bankruptcy filings, Trepp CMBS retail data, CoStar and CBRE vacancy surveys, and mall REIT reports such as Simon Property Group's.
Debates and risks
Whether dead malls are best converted to apartments, warehouses or mixed use, and who absorbs the losses in doing so, is still being worked out.
Connections (2)
▸Retail real estate: struggling malls, resilient strip centers saw mall loans sour inside CMBS: conduit loans pooled into commercial mortgage bondsFact, law or data
The connection
Many malls were financed with large non-recourse CMBS loans. As anchors closed and sales fell, income dropped below debt payments, and owners often handed the keys to special servicers rather than add equity. Retail CMBS delinquency peaked at about 18% in June 2020 (Trepp), and many mall loans were resolved at heavy losses to bondholders.
When and why
Regional malls nationwide, 2016–2025; mall owners CBL, Washington Prime and Pennsylvania REIT all filed for bankruptcy in 2020–21.
How we know
Trepp delinquency data, monthly CMBS servicer reports, and the bankruptcy filings of mall REITs.
Debates and risks
How much mall debt loss still sits in CMBS pools, and how low appraisals on dying malls should go, is debated.
▸Sale-leasebacks: selling the building and renting it back are a common funding tool for chains in Retail real estate: struggling malls, resilient strip centersFact, law or data
The connection
A retailer that owns its stores can sell them to an investor, often a net-lease REIT, and lease them back for 15–25 years. The chain gets cash to pay debt, buy back stock or fund growth; the buyer gets long rent backed by the tenant's credit. In retail, this can strengthen chains or, critics say, load weak ones with rent.
When and why
Common among US retailers and restaurant chains; examples include Sears–Seritage (2015) and many grocery and drugstore chains.
How we know
Recorded deeds and leases, SEC filings of retailers and net-lease REITs such as Realty Income, and transaction databases.
Debates and risks
Whether sale-leasebacks helped push chains such as Mervyn's (bankrupt 2008) under is debated; others credit them with rescuing companies.