While some CT malls are experiencing a resurgence, others have an uncertain future

Richard A

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Some CT malls going through resurgence:(Dex Planet/Pexels)

The 2022 holiday season will be dicey for other Connecticut malls as inflation reduces the buying power that consumers had after the initial stretch of the COVID-19 pandemic, yet many people's desire to leave the house is still strong. Danbury Fair is experiencing a rebound after a stretch of stubborn vacancies.

What remains to be seen is if these accomplishments will result in further investments, some of which are already underway at other malls, such as the new apartments going vertical at the Main Street entrance to Westfair Trumbull or the food hall suggested by celebrity chef Todd English for Stamford Town Center, where a Brazilian restaurant just debuted.

Large mall operators are expressing the most confidence in years as leasing activity continues, despite persistent competition from online vendors like Amazon and Walmart, and retail districts, which are witnessing a renewal for both stores and restaurants. This is despite problems for some, such as the Crystal Mall in Waterford.

According to Doug Healey, senior vice president of leasing for Danbury Fair owner Macerich, "The delays in shipping, which were frequent last year, I believe really annoyed a lot of customers—the shipping charges are getting exorbitant." "I believe that this Christmas, brick-and-mortar will be very, very favorable."

This is a change from how retailers felt before the COVID-19 pandemic when Amazon's relentless march forced a lot of stores into bankruptcy or even liquidation. After this year's Christmas, according to Macerich's chief financial officer, he sees no evidence of it happening because current retailers have much larger cash balances and robust foot traffic.

According to Macerich CFO Scott Kingsmore, "normally right now we'd start to hear from stores who were setting themselves up for a substantial restructure." That's actually just not the case, so 2023 will probably be an unusually low year. It won't be a "nil" year, but it will likely be low in terms of tenant fallout.

After Brookfield Properties opened the SoNo Collection in South Norwalk less than a month before the enormous American Dream mall along Interstate 95 in East Rutherford, New Jersey, Connecticut became a national litmus test for mall appeal in 2019. Despite the presence of Yard House there and the fact that the mall has drawn a number of eateries to its upper-level restaurant spaces, Brookfield Properties has yet to fill out a restaurant row planned for West Avenue at the main entrance to the mall, whereas the SoNo Collection has been able to keep most of its storefronts full.

The Crystal Mall in Waterford was transferred to lenders last week, according to CoStar, after the mall's original owner, Simon Property Group, decided to stop making loan payments on an $81 million loan that the mall had served as collateral for. A Bed Bath & Beyond shop closure there resulted in the mall's occupancy being listed as being about 40% by Hearst Corp. subsidiary Fitch Ratings as of July.

A question on Simon Property Group's choice to transfer the Crystal Mall to Rialto Capital, a company that specializes in maximizing returns for investors holding failed loans, went unanswered.

After years of building up their online sales, merchants are reviving their storefronts to attract new customers, according to CEO David Simon.

"The returns on eCommerce just aren't quite what everybody talks about," Simon said. "Bricks is where the action is."

However, new concept stores and renewed interest from long-standing brands give mall operators confidence. On Thursday, Macerich's Kingsmore highlighted Danbury Fair's agreement with Target. Aside from entertainment venues like the Round1 bowling alley and amusement park planned for Danbury Fair, not far from the new Golf Lounge 18 there, Macerich is also experiencing previously unheard-of conversions of conventional store floors for various purposes.

As is common knowledge, Kingsmore said, "Target is very selective about the real estate it chooses. "The choice to set up shop at Danbury Fair is a huge endorsement of the property, as well as of the facility's capabilities and standing."

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Richard Appiah is a blogger and 2X top writer in Business and Finance on Medium. I write about money, business, investing & finance.

West Haven, CT
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