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Eastview Mall, 14 miles southeast of downtown Rochester, New York, was a rare bright spot among regional shopping centers.
A fixture in the area for almost 50 years, it served a thriving community, with jobs in health care and at the nearby university. And it had so far managed to survive the trends that were killing off other malls: the relentless rise of online shopping, over-leveraged retail chains and shifting populations.
Now, nothing is showing at Eastview’s Regal Cinema. Plans to convert the space once occupied by Sears into a Dick’s Sporting Goods are on hold. PF Chang’s is still open, but only for takeout and delivery, including beer.
With the Covid-19 pandemic forcing stores to remain closed, some of them aren’t paying landlord Wilmorite, a family-owned real estate developer. Wilmorite, in turn, missed about $820,000 of mortgage payments due in April, filings show.
The longer the shutdown lasts, the better that bet will look.
New York Governor Andrew Cuomo has extended his stay-at-home order to many parts of the state until the middle of May, while saying a case could be made for reopening some regions sooner than others.
“There’s about $1 trillion of mortgage debt that underlies the shopping-center industry,” said Tom McGee, chief executive officer of the International Council of Shopping Centers. “If it somehow becomes unserviceable, it’s going to create an enormous strain on capital markets and communities.”
Even as other parts of the commercial mortgage market struggle, there are signs that a retail recovery might be particularly prolonged. Just one-third of American adults said they’ll feel safe shopping in a mall after stores reopen, according to an April 20 survey by First Insight Inc., a retail predictive analytics firm.
Still, shares of mall operators climbed this week after reports that Simon Property Group Inc. plans to reopen dozens of malls in states that are easing stay-at-home restrictions.