Thread by @iononrecourse

Here's a few thoughts on why regional malls are tremendous redevelopment opportunities (and why they're not):

By definition, they are regionally accessible, so there's usually a great transportation network. Most of the suburban malls are surface parked so the site work is complete on 30-100 acres. All the utilities are there

Don't be surprised if it has access to a big fiber line, too. Sometimes there will be access to pedestrian and bike trails. Most are surrounded by amenities like restaurants, hotels, and services. so far so good, but...

more often than not, the anchor stores are owned by others - so an additional 3-5 acquisitions might be required because these anchor stores almost always have contractual control over the balance of the property, and even if the anchor store is

closed, they see value in these controls. Another wrinkle is the in-line smaller stores often have co-tenancy requirements that allow rent reductions if certain occupancy or tenant quality thresholds are unmet. more important is

their quiet enjoyment rights that require the mall owner to keep the mall open and not disturb their tenancy, so in an extreme case a 500sf jewelry shop could require 200,000sf of mall space be heated, cooled, and maintained which might cost

a few million $ annually. And usually its not the risk of one holdout, but many, and each compounds the negotiation complexity and risk. Let's say you can find your way clear of tenancy problems, another hassle is zoning and entitlements

these malls, lame as they are, are often a nostalgia source for municipalities. And they're often (historically) massive revenue generators - property tax, sales tax, etc and govt's often hang on to hope of a turnaround and a return to former glory.

see your way through these issues so far and you've got to find a way to finance it. It will be a hard no from most lenders until everything is buttoned up and prospective equity investors will send you into a shame spiral with all their questions

once you've run the capital gauntlet there's the actual construction, beginning with demolition and all the fun little environmental Scooby snack discoveries that come with a massive vintage 1960-70s structure. So if you find one

you've got the opportunity to create radical change, helping set a community on a new trajectory and a canvas for a mixed-use opus of Pablo Escobarian scale. Seems pretty straightforward, right?