Sears is closing 20 locations across the country that may lead to the downfall of the malls they once were in.
Most malls have their anchor stores. Names like Macy’s, JCPenney, and Sears would get the bulk of the revenue. But, as these department stores begin to close, the malls may follow.
Morningstar, an independent investment research company, came out with a list of mall locations at risk for this reason. Sears is pulling out of all 20 locations they deemed to be unprofitable, including the Huntington Square Mall on Long Island.
A large mall may be able to absorb the loss of a tenant like Sears, but Morningstar warns that for smaller malls, this “weak department store environment” as well as a constrained customer base may seal the empty space’s fate.
This could cause other tenants to negotiate lower rents or even terminate their leases.
Morningstar identified eight malls with a higher risk of defaulting on their loans because of this, including two in upstate New York.