Selling and managing empty shopping centers, and we need new thinking from lenders and shopping center owners

1. Big Box Stores
Retailer after retailer is going out of business. It’s not just the Mom and Pop shops that
are closing their doors; major retailers such as Circuit City are also closing their doors.
Late in 2008 Mervyn’s also announced they were shutting down. In January regional
department store, Gottschalk’s also went into bankruptcy. Steve and Barry’s, and KB
toys are also major names which are now in bankruptcy. You can add Linen’s ‘N Things
and The Sharper Image to the list also. There are severe dangers of more major retailers
closing.
Clearly when retailers close, it affects the overall perception of the economy and
consumer spending. The more stores that close, the more consumers keep their money in
their own pocket. Getting consumers to spend is, after all, one of the major goals of the
stimulus package President Obama has now signed into law.
There is worry about what other retailers are next. Other major retailers are in trouble
too. Saks is down 24%. Abercrombie & Fitch is down 19 percent. Gap is down 18
percent. However, some are not struggling as much. For example, Macy’s and Target
are both down only 3-4%. However, Macy’s is still planning on closing 11 stores this
year and will cut 7,000 jobs. These retailers are trying to control their profit by limiting
inventory. A big implication of this slow down is that there is and will continue to be a
glut of retail space available if someone wants to open a business today.
But the vacancies left by the big box stores are painful. Often times it is leaving a strip
mall without a major anchor which affects shopper’s perceptions of the entire mall. This,
in turn, has negative consequences on all of the stores in a mall which has lost an anchor.
Burt Flickinger, managing director of SRG insights says between 2,000 and 3,000
shopping malls could close in 2009. He also predicts that upwards of 200,000 retail
stores and restaurants could close this year.
Many major retailers who have gone through very aggressive expansion plans such as
Starbucks are now closing under-performing stores and significantly cutting back on how
many new stores they open. David Glickman, VP of Grubb & Ellis retail group says “a
lot of retailers are taking a more conservative approach not opening many stores or…are
in hibernation.” Some see what’s happening in the market as far worse. Howard
Davidowitz, chairman of a national retail consulting business says “It’s an absolute
disaster. What a mall represents is discretionary spending and discretionary spending is
in a depression.”
The credit market only adds more pain to the picture. Credit ratings companies are
making it tougher for some companies to access credit to buy inventory. Standard &
Poor’s put six companies on a negative credit watch. They include Sears, Macy’s,
Nordstrom, J.C. Penny and Dillard’s.

2. Shopping malls are hurting significantly. Without their anchors not only do they lose the
majority of their revenue, but customers stop coming and puts the smaller tenants in a
very precarious situation of losing out on the traffic the anchors drove for them. The fore
some mall developers are in great danger themselves. The second largest mall operator,
General Growth Properties stock has fallen to as low as $1 per share.
The National Retail Association projects that the vacancy rate will jump to almost 13% in
the third quarter of 2008 from 10% in the same period last year. Vacancy rates in smaller
regional malls also rose 7% in the October through December period of 2008. The
smaller malls may not be affected quite so badly in that they don’t tend to hold a lot of
national anchor stores.
The malls, the retailers and the consumer are all entwined in a very delicate ecosystem.
When one group suffers, there is a trickle down effect. When all three groups are
suffering, then everyone is in trouble.
There is also a social loss to report with so many malls suffering. Malls have historically
been a place for people to gather, talk, eat and socialize. As they disappear or shrink,
there is a loss for people to have a place to go. So there are significant social and
economic impacts at play.
The cities in which the malls are located also hurt when stores close. Many cities depend
heavily on tax revenue derived from shopping malls. Needless to say when stores and
malls close, American’s lose their jobs.
What are you to do if you own a mall or major store and need to sell? You can use of the
major Wall Street boy’s to sell your property. These big firms command large fees and
also, they bring in local experts to help and they also come with big fees to help you stop
the bleeding.
There is an option, however. A local Southern California company, Terra Asset
Management.com is an expert in liquidation risk and work to sell your dealership, mall.
or strip, and or the land to interested parties. Operating in Palm Springs, Terra Asset
Managers and its partners have unique foreclosure expertise and are the leading
foreclosure specialists in Southern California. Terra Asset Management.com can cut
your time of sale down. Equally important, Terra can limit your liquidation risk and most
importantly Terra has the resources and the relationships to get your property, stores,
brands, and company(s) sold quickly anywhere in the United States.
The 4 step process of Terra Asset Management.com takes the worry off your shoulders
and handles all aspects of selling the property.
Step 1: Terra takes over the property so you don’t have to be involved
Step 2: They take the property and put in on the right path. They will handle all
repairs or other things that may keep you from selling it quickly.

3. Step 3: Terra handles all of the day to day operations of the property including
maintenance and upkeep.
Step 4: Terra disposes of your property in the quickly and easily and puts the most
money back into your pocket.
Terra Asset Management.com is a full services real estate firm and has contractors,
CPA’s, legal and other help that may be necessary for you to sell your property.
If you have a retail store or shopping Mall and you want it sold, call Terra Asset
Management.com. (760) 408-8998 or reolord@aol.com