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N EW HAM PSH I R E B USI N ESS R EVI EW
REAL ESTATE & CONSTRUCTION
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N H B R.C O M
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Can NH shopping malls survive the coronavirus? As anchor tenants declare bankruptcy and store closings continue, talk of redevelopment arises NORTH COUNTRY
LAKES REGION
NASHUA REGION
BY MICHAEL KITCH
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The impact of Covid-19 has hastened the coming of the so-called “retail apocalypse,” casting a shadow over the future of state’s major shopping malls, which represent some of the state’s most valuable properties and occupy some of its most prized land. In 2019, retailers announced 9,302 store closings, 60% more than the year before. And this year, more than 2,000 stores were shuttered before the coronavirus hit its stride. Prominent among the fallen and frail are department stores — Sears, Nieman Marcus, J.C. Penney, Macy’s, Lord & Taylor — which altogether represent 60% of the anchor space and 30% of the floor space of a typical shopping mall. “The genre is dead,” Mark Cohen of the Columbia University Business School told The New York Times. In April, Green Street Advisors, a research firm that watches the commercial real estate market, predicted by the end of 2021 that half the remaining department stores will be closed permanently, setting malls adrift without anchors. “Many malls will now be faced with multiple anchor vacancies, a tough place to come back from, especially in an environment where demand for space is virtually nonexistent,” Vince Tibone, an analyst at Green Street Advisors, told CNBC. “This begs many questions. What will a mall redevelopment look like post-Covid?”
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Anchors sinking Three of the four largest enclosed malls in New Hampshire — the Mall of New Hampshire in Manchester, the Pheasant Lane Mall in Nashua and the Mall at Rockingham Park in Salem — are owned by the Simon Property Group, the largest retail real estate investment trust (REIT) and largest operator of shopping malls in the country. Simon also owns Merrimack Premium Outlets, a strip mall with a faux village motif featuring upscale retailers. The fourth enclosed mall — the Mall at Fox Run in Newington — is owned by Seritage Growth Properties, a REIT formed in 2015 when Sears spun off its 235 properties, including its anchor store at Fox Run. A fifth enclosed mall, Steeplegate Mall in Concord, is owned by Namdar Realty Group. That mall has been troubled since the Great Recession, and has started to find some non-retail tenants, like a gym and charter school. At both Pheasant Lane and Rockingham Park, one anchor space is empty and two are occupied by Macy’s and J.C. Penney while Lord & Taylor operates alongside them both at Rockingham Park. At the Mall at Fox Run, three of the four anchors are occupied, two by Macy’s and one by J.C. Penney.
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