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JOBS & THE MARKET KEEP STRENGTHENING! The stock market has hit record highs, foreign companies are announcing big new plants in the US, and hiring has brought unemployment to a 16-year low. 209,000 jobs were added in July, bringing unemployment down to 4.3%, the lowest since 2001. All of this is good news for spending, which helps businesses, and thus landlords renting to those businesses; long may it continue! The only draw back is some businesses are being replaced with e-Commerce, but those too are being replaced with service businesses like food & medical.
THE DEATH OF THE SHOPPING MALL. As mentioned in the section above, business is good for all, except those businesses being replaced by e-Commerce. By 2022, analysts estimate 1 out of every 4 malls could be out of business. In 2017 alone, 8,600 stores are estimated to close and 9 national retail chains have already filed for bankruptcy. 2017 has already seen over 5,300 retail closings, including Sears, Macy's, JCPenney and Kmart. Payless announced it would close 400 stores in April and RadioShack has filed for bankruptcy twice in the last 2 years. Since 2002, department stores have lost 448,000 jobs, a 25% decline, while in 2012 online sales topped $1 trillion for the first time. The change in shopping malls has been dramatic. Over 1,500 malls were built between 1956 and 2005, yet between 2010 and 2013, mall visits during the holiday season have dropped over 50%. "We are over retailed", says Ronald Friedman of Marcum LLP, a company researching consumer trends. There is an estimated 26 SF of retail for every person in the US, compared to 2.5 SF for every person in Europe. There are simply too many retail stores whose products are being replaced by frictionless and ruthlessly efficient e-Commerce. The malls that are surviving, and in fact thriving, tend to share certain characteristics, primarily 'Luxury'. Malls offering luxury products or experiences do not need to compete with companies like Amazon by catering to clients who are not scouring for deals. The trend of efficiency, services, and experiences replacing businesses selling products will only continue into the future.
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