The US mall sector is in diabolical shape, and that after going through a lengthy restructuring over the past 10-15 years. Fifteen years ago there were about 2,000 regional centres in the US and now you would be very lucky to find more than 1,100. They just aren't that popular anymore among the constituency that really counts--US consumers with money to spend.
Many of the retail chains in these malls are high-profile and badly wounded American lifestyle chains. Gap, Abercrombie & Fitch, Express, Talbots and so on. They're getting so badly beaten up on home soil that some are rolling the dice on stores in Europe, Asia and the Middle East, where their brands still have some scarcity value.
These retailers, along with underperforming department stores, are gumming up malls right across the land.
It used to be enough to own the dominant mall(s) in a market. It didn't matter that the broader sector was falling apart around you so long as you were the best of breed. Now, that is no longer the case. The sector is shot. It could have been fixed a long time ago but the developers themselves chose not to, opting instead to just rent space to marquee brands at the highest rents possible.
The bankers are equally culpable because they didn't want to lend for any shopping center model that was even slightly off the square.
And the retailers--they were just going wherever their competitors went, following the crowd.
In this decade we will lose another 30-50% of the current surviving regional center population in the US. So, Frank, invest in anything, but just don't invest in any more US malls. Let Simon take on that albatross.