With Department Stores Disappearing, Malls Could Be Next

With Department Stores Disappearing, Malls Could Be Next

Brick-and-mortar retail was in the midst of seismic changes even before the pandemic. Analysts say as much as a quarter of America's malls may close in the next five years.

The Vallco Shopping Mall in Cupertino, Calif., is closed and partially demolished. Its fate has become a contentious issue in the community.Credit...Anastasiia Sapon for The New York TimesJuly 5, 2020, 3:00 a.m. ET

The directory map for the Northfield Square Mall in Bourbonnais, Ill., has three glaring spaces where large department stores once stood. Soon there will be a fourth vacancy, now that J.C. Penney is liquidating stores after filing for bankruptcy.

With so much empty space and brick-and-mortar retail in the midst of seismic changes even before the pandemic hit, the mall's owners have been talking with local officials about identifying a "higher and better use for the site,“ though they have declined to elaborate on what that could be.

"Filling in one anchor space, generally, is doable,“ said Elliot Nassim, president of Mason Asset Management, which co-owns the Northfield Square Mall and dozens of other enclosed shopping centers. "But once you get hit by two others and you're dealing with three anchor closures, that's usually where we become a little more likely