Mall Values Plunge 60% After Reappraisals Triggered by Bad Debt
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(Bloomberg) U.S. mall values plunged an average 60% after appraisals in 2020, a sign of more pain to come for retail properties even as the economy emerges from pandemic-enforced lockdowns.
About $4 billion in value was erased from 118 retail-anchored properties with commercial mortgage-backed securities debt after reappraisals triggered by payment delinquencies, defaults or foreclosures, according to data compiled by Bloomberg.
That average drop — which reflects the change in value since the debt was originated years ago — may underestimate losses when the properties come up for sale because so much retail real estate is in distress. And few buyers are willing to take risks on aging shopping centers as e-commerce continues to grab market share.
“It’s an eye-popping decline,” Gwen Roush, an analyst with DBRS Morningstar rating service who tracks commercial real estate, said in an interview. “When we’re forecasting a loss on these malls, we’re even further haircutting that value.”
Bored someday, watch “abandon malls” on Youtube. Sad.
March 1, 2021 at 10:31 PM #407474PunxsutawneyModerator
- Total Posts: 2,142
It’s pretty ugly.
In America, “Liberty” means “Free to Die in Service of Capital” - Amfortas the hippie.
Most of today’s elites have the moral and social reasoning capacities of spoiled toddlers.
“People of privilege will always risk their complete destruction rather than surrender any material part of their advantage...but the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-right. The sensitivity of the poor to injustice is a trivial thing c
March 2, 2021 at 1:12 AM #407527gordyflParticipant
- Total Posts: 1,587
“Commercial mortgage-backed securities”. That sounds familiar.
The biggest problem right now seems to be malls in poorer neighborhoods. This problem could spread into upscale neighborhoods, eventually. Yet, the stock market doesn’t seem fazed by any of this as it was up today 600 points. Maybe they know, whatever happens, the government will come to the rescue for Wall Street. So, they need not worry.
March 2, 2021 at 5:48 AM #407574Mr. Mickeys MomModerator
- Total Posts: 5,765
I hang out with other environmentalist on Zoom lately who want to come up with solutions to do this, but they don’t seem to have a firm plan. It’s pretty frustrating when it only takes money… lots and lots of money you are willing to sink into ideas for the malls to reinvent themselves.
I suppose if you were a better version of a Billionaire than most, with a vision, this could happen, but those groups mentioned like CBL (local mall here)… they have a cookie cutter mentality and only manage while the banks play bait and switch. I will never support Amazon shopping when the bread and butter of a community is its commerce center.
Hell, no... I'm not giving up...
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