I’d like to begin this column with a little personal history—when I first started in trade journalism, I cut my teeth on magazines covering the shopping center industry. For that reason, I have always had a soft spot for the business, and keep track of it as best I can through print and online media sources.
Unfortunately, much of the news involving the mall business has been anything but great of late. Changing customer shopping tastes combined with the continued growth of online retailing have economically gutted the traditional department store business, leading to multiple store closings by firms such as Macy’s and JC Penney. In turn, this has put many mall developers and management firms in something of a bind since their properties rely heavily on big box department store anchor tenants. A recent Bloomberg News article revealed just how bad the situation has become…some Wall Street hedge fund companies have begun “shorting” the securities of some mall and shopping center owners and operators, essentially betting they will default on loans and, in doing so, make them money. According to Bloomberg, this is a similar strategy to the one followed by Michael Burry and Steve Eisman during the last housing crisis that made them millions of dollars and was the subject of the recent hit movie The Big Short.