One of the biggest real estate moguls in America — who used to be one of the biggest investors in retail — thinks there is still more turmoil to come for an industry that has already seen dozens of retail bankruptcies and thousands of store closures this year.
“We started this whole [pandemic] with more retail space per person than any other country in the world, by a multiple,” Zell said. “The change in retail is really just a reorganization of oversupply.”
“The pandemic has accelerated the amount of online retail, and I don’t think that’s ever gonna change,” he added. “That’s gonna require future retail real estate to be very different than it has [been] up until now.”
The headaches have only since mounted for retail real estate companies like the biggest U.S. mall owner Simon Property Group and New Jersey’s American Dream owner Triple Five Group, which are grappling with retail chains and restaurants either not paying rent or going out of business entirely.
The Tennessee-based mall owner CBL & Associates is expected to file for bankruptcy before the year is over — another sign of how much stress the industry is facing.
Only a small handful of retailers including Walmart, Target and Dick’s Sporting Goods have reported strong sales during the pandemic, with consumers flocking to their websites and stores for groceries, outdoor gear and other essential items.