Right Now, People Are Going to Shopping Malls Almost as Much as They Did Before Coronavirus

Malls may not be dead after all.

A new report today from S&P Global Market Intelligence suggests that, in recent weeks, foot traffic at malls and outlet centers across the United States is starting to approach pre-COVID-19 levels.

The report, which uses data from Airsage, found that foot traffic at malls and outlet centers in the U.S. has steadily climbed since May, when many states started rolling out reopening plans following several weeks of government-mandated lockdowns.

While foot traffic to U.S. malls owned by publicly traded real estate investment trusts was down roughly 15% year over year during the week ended Aug. 9, it’s a far cry from the complete stoppage of store visits most malls experienced in late March and early April. What’s more, that figure shows the year-over-year gap in mall traffic continuing to narrow each month.

Meanwhile, the outlook appears to be even brighter for discount shopping centers: Foot traffic at outlet centers came in “slightly higher” than 2019 levels for the same week, indicated the data curated by S&P Global Market Intelligence.

Tanger Factory Outlet Centers Inc., said the report, experienced the quickest recovery in foot-traffic, “likely due to the open-air nature of its outlet centers.” Shopping spaces owned by Simon Property Group followed a similar trend, with its outlet centers demonstrating quicker recovery than its enclosed mall properties.

Foot traffic at properties owned by Taubman Centers, which owns 27 shopping centers, and Macerich, which runs about 47 shopping centers, rebounded the slowest thus far, both down 25% year over year during the week ending in Aug. 9.

Overall, the report is good news for retail, which has been particularly hard hit amid the global health crisis. In addition to the fallout felt among fashion brands and retailers — JCPenney, Neiman Marcus and J.Crew are among the firms that went bankrupt in recent months — mall owners have felt the ripple effect of dark store fronts and an influx of requests for concessions from renters.

Just this week, mall giant CBL & Associates Properties Inc. said it plans to file for bankruptcy in the coming months after receiving notices of default following its failure to comply with certain covenants under its secured credit facility.

Landlords like CBL have seen their balance sheets tossed into disarray as part of domino effect from struggling retailers seeking to boost their cash flow by skipping out on rent payments, particularly for stores they were forced to shutter due to government orders. In fact, some commercial owners needing to meet their own mortgage terms have taken legal action against tenants. Simon Property Group, for example, filed suit in June against Gap Stores Inc. over missed payments.

Airsage collects and analyzes real-time mobile signals and other location data to track movement patterns. The analysis for S&P Global Market Intelligence included properties owned by Simon Property Group Inc., Taubman Centers Inc., Macerich Co., Tanger Factory Outlet Centers Inc., Brookfield Property REIT Inc., Washington Prime Group Inc., Pennsylvania REIT and CBL & Associates Properties Inc.

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