New Haven Register (Sunday) (New Haven, CT)
Malls keep their options open as they search for tenants
As two major U.S. mall companies filed for bankruptcy entering November, the owner of Danbury Fair pushed off to next spring a $191 million mortgage secured by the mall.
The CEO of Macerich emphasized to analysts this week that the company had the luxury of doing so due on the strength of its balance sheet. But with the balance of the 2020 shopping season still ahead, malls remain in a precarious position as the COVID-19 pandemic accelerates anew.
CBL & Associates declared bankruptcy this past week, with the company the seventh largest owner of malls and shopping centers in the country in 2018 as ranked by National Real Estate Investor. Also filing for bankruptcy Pennsylvania Real Estate Investment Trust, ranked 30th that year.
Days before, the nation’s two largest mall owners Simon Property Group and Brookfield Asset Management finalized an agreement to rescue J.C. Penney from bankruptcy, saving most stores.
And last month, retailer Safavieh Home Furnishings spent more than $20 million to acquire the Stamford Town Center mall, the price equating
to just one fifth of the mall’s appraised value as assigned last year by the city of Stamford.
In a study published in October, Barclays Capital determined that 28 percent of U.S. malls had a vacancy rate of at least 20 percent as of September, the “danger zone” in the
words of the report threatening the financial viability of a mall. That compared with just 8 percent of U.S. malls being in that bracket heading into the fall of 2019.
The owners of both the Connecticut Post Mall in Milford and West
anticipated future occurrences based upon projections of key market, societal, technological, talent and other factors critical to your organization. I contend we are formally and informally performing contingency planning on every level from our nation down to our households.
I will briefly discuss four elements to a contingency planning process.
First, there needs to be a clear understanding of the key factors that impact your organization. Additionally, go one step further and identify the factors that are critical to your organization’s key factors. Call them B factors to make it simple.
Second, your existing planning process needs to be accelerated. The actual time from identified need to pivot to a new plan and the plan’s creation has to be compressed. The flexibility of your team or talent to react to and implement the new plan puts additional emphasis on your talent optimization.
A major component of the process is an internal monitoring process to track and measure the changes to the A and B critical factors for your organization. This process should include input from your entire staff, customers, suppliers and contacts. Based upon your predetermined mile markers, your management team can then modify the contingency/strategic plan to respond to the needs of your customers, team members and organization.
Lastly, the plan needs to take into account the items that worked, what were surprises, or those items whose importance was not properly assessed. All valuable input to improve the process.
These are challenging times for all of us. A timely, flexible plan might help the entire team cope a little better.
Cornell Wright is the author of “31 Coffee Breaks to a Better Organization,” a trainer and consultant at The Parker Wright Group Inc. in Stratford. The firm strengthens clients’ team development in pursuit of customer service strategies and processes and is a Certified Partner of Predictive Index. He can be reached at 203-377-4226 or cornell @parkerwrightgroup.com.