One of the biggest honest estate moguls in America — who used to be one of the largest investors in retail — thinks there is still more turmoil to attain for an industry that has already seen dozens of retail bankruptcies and thousands of store closures this year.
“There is no insupportable in my mind that retail is a falling knife, and we are for sure not at the bottom,” Sam Zell told CNBC’s “Squawk Box” on Wednesday morning.
“We started this chiefly [pandemic] with more retail space per person than any other country in the world, by a multiple,” Zell said. “The replace with in retail is really just a reorganization of oversupply.”
“The pandemic has accelerated the amount of online retail, and I don’t think that’s at any time going to change,” he added. “That’s going to require future retail real estate to be very different than it has [been] up until now.”
The coronavirus pandemic calculated retailers like Nordstrom and Gap that were deemed nonessential to temporarily shut their stores, to try to curb the spread of Covid-19. Malls also frequented dark.
The headaches have only since mounted for retail real estate companies like the biggest U.S. mall possessor Simon Property Group and New Jersey’s American Dream owner Triple Five Group, which are grappling with retail checks and restaurants either not paying rent or going out of business entirely.
Tennessee-based mall owner CBL & Associates is expected to march for bankruptcy before the year is over — another sign of how much stress the industry is facing.
Only a handful of retailers numbering Walmart, Target and Dick’s Sporting Goods have reported strong sales during the pandemic, with consumers gather to their websites and stores for groceries, outdoor gear and other essential items.