The Retail Implosion Nibbling at 12 Oaks Mall

[Johnnny5]

^^^ Another thing to consider is that the lease terms for many of the in mall stores may be based on the anchor stores being there and open. With 12 Oaks losing Sears and maybe all of its major anchors, the lessees may have an easy out, or at the very least a case for rent reduction.

As for Novi, it's going to face a very large change in the next 10 years. If this Covid19 crisis stretches into next year [[Which is looking very likely) I expect a third of the brick and mortar retailers in Novi to go under, and maybe even as many as half. The Fountain Walk complex that includes Dick's Sporting Goods and the Imagine is probably going to be half empty before the end of the year [[If it isn't already)

The city of Novi does have one saving grace in that residential real estate and warehouse space is still booming, and the owners [[Or their creditors) may have the option of converting some of these large shopping centers into residential properties or warehouse space. With top notch schools and easy freeway access, the properties would fetch top dollar.

[Meddle]

may have the option of converting some of these large shopping centers into residential properties or warehouse space. With top notch schools and easy freeway access, the properties would fetch top dollar.

That might be kind of cool as an enclosed community. Some housing spaces, some stores for the people to get things they need. Some office space for places to work.

[401don]

Not sure what's happening in the Detroit area, but here in Toronto the anchors [[Hudson's Bay, Walmart etc.), who normally drive traffic throughout the mall, are only letting customers enter and exit their outside doors to control volume thereby hurting all the smaller stores even further.

[casscorridor]

^^^ Another thing to consider is that the lease terms for many of the in mall stores may be based on the anchor stores being there and open. With 12 Oaks losing Sears and maybe all of its major anchors, the lessees may have an easy out, or at the very least a case for rent reduction.

As for Novi, it's going to face a very large change in the next 10 years. If this Covid19 crisis stretches into next year [[Which is looking very likely) I expect a third of the brick and mortar retailers in Novi to go under, and maybe even as many as half. The Fountain Walk complex that includes Dick's Sporting Goods and the Imagine is probably going to be half empty before the end of the year [[If it isn't already)

The city of Novi does have one saving grace in that residential real estate and warehouse space is still booming, and the owners [[Or their creditors) may have the option of converting some of these large shopping centers into residential properties or warehouse space. With top notch schools and easy freeway access, the properties would fetch top dollar.

Metro Detroit is in a downward spiral, the whole region looks like it's coming apart at the seams. And with covid-19, the transition towards a low wage, low/no benefits, low stability, high precarity workforce is accelerating. Warehouse jobs [[aka "fulfillment centers") are the new normal. Abandoned malls, strip plazas and office parks surrounded by rundown suburban housing and connected by crumbling infrastructure is the new normal.

The result is a cultural wasteland where the only options for shopping and entertainment are the same few chains and big boxes, owned by one of several corporate conglomerates. And if you can afford to shop at these places on your $15 wage [[if you're lucky) you will probably be too tired. Amazon is more convenient for shopping and Netflix is an easier option to distract your mind after a crummy day than anything those places might offer. Welcome to then new normal.

[Johnnny5]

^^ I don't really see this as a Detroit specific issue, it's likely to be happening in almost every large metro in the near future if the pandemic continues.

The one thing that might change sooner than one might think is Amazon's dominance of online retail. Bezos is operating Amazon's retail operations at near break even margins in order to destroy and discourage, not compete or profit. Once the damage gets beyond deniable, the old men in Washington will be forced to get their lazy asses off their hands and do something about it.

[JBMcB]

Welcome to then new normal.

There is always a new normal. General/dry-goods store owners were upset when the specialty stores came in. Specialty stores were upset when catalog shopping became popular. Catalog retailers were upset when department stores came in. Department stores were upset when malls opened up. Malls are now upset that Amazon is taking over. Retailers will survive, they just need to find their niche.

[Meddle]

I used to really like Briarwood. I didn't go to A2 very often, so it was kind of a day trip to hit that and a couple of other places.

[401don]

Amazon is in talks to convert Simon Property Group's former Sears and JCPenney stores into fulfillment centers. In Michigan, Simon owns Birch Run Outlets and Ann Arbor's Briarwood Mall, which has/d Sears and JCPenney.

https://www.usatoday.com/story/money...ls/3331623001/

Kind of the ultimate insult. If it's how people want to shop these days that's their choice, I'm just glad as a kid growing up in a small town I had lots of independent owner-operated stores to shop. Then after moving to the suburbs of a city, I had the mall experience - dept. stores, bookstores, record shops, fast food - all in one place.

[hybridy]

Well put. Sad times. The region and state are in a controlled decline. Nobody wants to admit this and you'll never get the rags here to write about it, but it's true. When traveling for work, the perception and long-term outlook of this state is not good.

https://www.strongtowns.org/the-growth-ponzi-scheme
Suburban bedroom communities in general will continue to decline - nationally. Their tax bases are built around a continuation of new development. Once the development spaces are all built out the tax base becomes stagnant. Newer burbs further out will then become more desirable and people and commerce go with. Fundamentally, we need to change our development patterns to create denser connected nodes of live/work connected by all forms of transit [[walk, bike, drive, mass -transit) which broadens the tax base.

Interesting article on future of the burbs:
https://www.dmagazine.com/frontburne...ning-in-texas/

[iheartthed]

Well put. Sad times. The region and state are in a controlled decline. Nobody wants to admit this and you'll never get the rags here to write about it, but it's true. When traveling for work, the perception and long-term outlook of this state is not good.

The Detroit area is very, very over-indexed into suburban development, but hardly a lost cause. In fact, I'd say that there is enormous potential because Detroit was able to develop such a large core before the suburban movement. There is a lot of opportunity to rebuild core Detroit into an attractive urban center, similar to what occurred in European capitals in the postwar period. There just needs to be more political support for it.

[bartocktoo]

the detroit area is very, very over-indexed into suburban development, but hardly a lost cause. In fact, i'd say that there is enormous potential because detroit was able to develop such a large core before the suburban movement. There is a lot of opportunity to rebuild core detroit into an attractive urban center, similar to what occurred in european capitals in the postwar period. There just needs to be more political support for it.

amen

[Gistok]

The Detroit area is very, very over-indexed into suburban development, but hardly a lost cause. In fact, I'd say that there is enormous potential because Detroit was able to develop such a large core before the suburban movement. There is a lot of opportunity to rebuild core Detroit into an attractive urban center, similar to what occurred in European capitals in the postwar period. There just needs to be more political support for it.

We need our own version of "Baron Haussmann"... who in the 19th century redid central Paris and made it beautiful.

https://en.wikipedia.org/wiki/George...A8ne_Haussmann

Although not as deconstructive as Haussmann.

[casscorridor]

The Detroit area is very, very over-indexed into suburban development, but hardly a lost cause. In fact, I'd say that there is enormous potential because Detroit was able to develop such a large core before the suburban movement. There is a lot of opportunity to rebuild core Detroit into an attractive urban center, similar to what occurred in European capitals in the postwar period. There just needs to be more political support for it.

That might be possible if metropolitan Detroit was experiencing population growth but it's been in a stagnate/declining trend since the 1970s. The vast extent of Detroit proper's urban abandonment coupled with the far greater vastness of Detroit's suburban sprawl makes such a task exceedingly difficult. The balkanized nature of the region's municipal structure also means regional planning is close to impossible, with wealthy areas not pulling their weight while poor areas get sucked into downward spirals. Inequality is becoming geographically amplified in such a way that I can imagine the Woodward corridor and the greater Downtown area emerging as sort of islands of mild growth and cosmopolitan lifestyle within a sea of decline. But my no means will they become thriving urban centers akin to European capitals.

[313WX]

I wonder if there will remain a need for Somerset to flank both sides of Big Beaver in the near future. Neiman just filed for bankruptcy, Sak's is also wobbly. Loss of two anchors would be devastating for the optics of that ritzy south side of the mall.

Neiman's and Saks aren't going anywhere.

Unlike some other markets, they're not oversaturated with stores in Metro Detroit.

[iheartthed]

Neiman's and Saks aren't going anywhere.

Unlike some other markets, they're not oversaturated with stores in Metro Detroit.

If Neiman survives bankruptcy. Saks is also rumored to be under severe distress, and is considering bankruptcy.

[iheartthed]

That might be possible if metropolitan Detroit was experiencing population growth but it's been in a stagnate/declining trend since the 1970s. The vast extent of Detroit proper's urban abandonment coupled with the far greater vastness of Detroit's suburban sprawl makes such a task exceedingly difficult. The balkanized nature of the region's municipal structure also means regional planning is close to impossible, with wealthy areas not pulling their weight while poor areas get sucked into downward spirals. Inequality is becoming geographically amplified in such a way that I can imagine the Woodward corridor and the greater Downtown area emerging as sort of islands of mild growth and cosmopolitan lifestyle within a sea of decline. But my no means will they become thriving urban centers akin to European capitals.

I don't think the region has to grow for Detroit to make the transformation, but it will be ugly. I don't think the overly suburban nature of Metro Detroit is sustainable. There won't be a ton of new buyers looking for suburban housing anytime soon, so a lot of suburban communities are going to decline in the coming decades [[this is also happening in metro areas with stronger core cities).

The demand will be for urban centers and less car dependent lifestyles. Detroit has a lot of room to improve there, and in doing so could attract a lot of attention. It also has a favorable location being located between Chicago and the currently booming Toronto.

[313WX]

If Neiman survives bankruptcy. Saks is also rumored to be under severe distress, and is considering bankruptcy.

Neimans at least is set to exit bankruptcy, possibly before the holiday shopping season.

https://www.pymnts.com/news/retail/2...of-bankruptcy/

[bartocktoo]

I don't think the region has to grow for Detroit to make the transformation, but it will be ugly. I don't think the overly suburban nature of Metro Detroit is sustainable. There won't be a ton of new buyers looking for suburban housing anytime soon, so a lot of suburban communities are going to decline in the coming decades [[this is also happening in metro areas with stronger core cities).

The demand will be for urban centers and less car dependent lifestyles. Detroit has a lot of room to improve there, and in doing so could attract a lot of attention. It also has a favorable location being located between Chicago and the currently booming Toronto.

I've never been one to complain to much about sprawl even though I'm in an inner-ring [[Harper Woods). But my goodness from 23 Mile up along the east side [[Van Dyke to 94) so many roads are being expanded, and there are new neighborhoods being built, just infrastructure for a couple hundred thousand people at most if it builds out, and that's not population growth. It's displacement...and I feel it is a tax waste. Maybe I'm getting old, but it's about time we fill in the donut instead of stretching it out more.

[jamiel]

I don't think the region has to grow for Detroit to make the transformation, but it will be ugly. I don't think the overly suburban nature of Metro Detroit is sustainable. There won't be a ton of new buyers looking for suburban housing anytime soon, so a lot of suburban communities are going to decline in the coming decades [[this is also happening in metro areas with stronger core cities).

The demand will be for urban centers and less car dependent lifestyles. Detroit has a lot of room to improve there, and in doing so could attract a lot of attention. It also has a favorable location being located between Chicago and the currently booming Toronto.

Several years ago Hour Detroit [[I think) had an excellent article about settlement patterns in metro Detroit and saying that there was only about 20 more years of viability in the mega-mansion belt [[Macomb, Novi/Canton) beyond about 15 miles from downtown. The viability of those big ticky-tack houses was only coming from multi-generational international families with a connection to auto [[that is, son/daughter engineer brings his/her parents over as they marry and have kids). The kids who grew up out there [[if staying in SEMI) are moving downtown and can't get outta their parents' neighborhoods fast enough.

[401don]

Several years ago Hour Detroit [[I think) had an excellent article about settlement patterns in metro Detroit and saying that there was only about 20 more years of viability in the mega-mansion belt [[Macomb, Novi/Canton) beyond about 15 miles from downtown. The viability of those big ticky-tack houses was only coming from multi-generational international families with a connection to auto [[that is, son/daughter engineer brings his/her parents over as they marry and have kids). The kids who grew up out there [[if staying in SEMI) are moving downtown and can't get outta their parents' neighborhoods fast enough.

The question is whether they will stay in the city when they have children. Also, if jobs continue to be located in the Troy/Auburn Hills corridor, many would be quite happy with a reasonably priced micmansion.

[jamiel]

The question is whether they will stay in the city when they have children. Also, if jobs continue to be located in the Troy/Auburn Hills corridor, many would be quite happy with a reasonably priced micmansion.

That's true, although in my experience [[was at GM-Ren Cen from 2005-2018; received a corporate relocation in 2006 from Atlanta, came to GM mid-career and was involved in college recruiting) when I came in 2005 there was only the most perfunctory mention of residing in downtown [[corporate temporary housing was in Troy); literally in one sentence "there are a couple of complexes downtown Rivertown and Millender but we'll find you something appropriate" with the subtext being "in the suburbs". Fast forward to the recruiting I did of college people [[grad and undergrad) in the 2015 time-frame---the assumption was that all of them would live downtown [[only ones that didn't were looking were powertrain folks moving to Novi for the Pontiac-Milford nexus). The question stands, what about the schools...there was a more recent story in the Free Press talking about "where do you live with kids" that rather presciently said "things will be shown to be different when the newcomers to the city do the hard work of insuring their cars and educating their kids in the city."

[iheartthed]

The question is whether they will stay in the city when they have children. Also, if jobs continue to be located in the Troy/Auburn Hills corridor, many would be quite happy with a reasonably priced micmansion.

Even if they don't, that's okay because life is not static. Population growth means the population replacement needs to be higher than the population outflow. Detroit's most urgent problem has been that it does not attract newcomers.