Click to enlarge.
The growth trend is extrapolated out to 2050. I'm simply showing what the future will look like if the current trend continues. If 10% causes shopping mall pain now (which it clearly does), then what would 20% do in just 17 more years? Or 40% just 17 years after that?
A 4.2% growth rate means that the thing growing doubles every 17 years. In this case, that thing is shopping mall pain.
If you get stung by a bee and every 17 seconds you get stung by twice as many, how many minutes will it take before you realize that you're standing on a bee hive? How's that for optimism?
The following chart shows retail employees as a fraction of all nonfarm employees.
Click to enlarge.
Although there has been recent illusionary relative strength brought on by misplaced faith in the Fed to heal all that ails us, I fully expect the downward trend in red to continue. Further, I do not expect the blue trend line to offer any meaningful support to halt the decline.
February 26, 2013
The Death of the American Mall and the Rebirth of Public Space
Now the ten massive REITs that own most of America’s malls are unwilling to invest the capital to reinvigorate older properties. Bloomberg reports that the biggest REITs – including General Growth Properties, which declared bankruptcy during the financial crisis – are recovering and growing by divesting themselves of old, less prosperous malls and concentrating on the most profitable.
Our older less prosperous economy is divesting itself of older less prosperous malls? Shocking.
Source Data:
St. Louis Fed: Custom Chart #1
St. Louis Fed: Custom Chart #2
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