When I was a little kid, I vividly remember being elated at the arrival of the Sears Holiday Catalog, that five-pound, five-inch thick book of everything. I spent hours studying the Lionel trains, baseball gloves and hundreds of other kids’ stuff.
Alas, yesterday Sears announced that it filed for bankruptcy, marking the beginning of the end of a storied company that once upon a time had the world’s tallest building named in its honor.
Yet Sears is just one more example of the seismic shift that’s turned the retail business on its ear.
Further evidence that retail real estate has a long way to go until it fully adjusts for the future reality was a report in the Wall Street Journal of how local governments are buying up dying malls. Municipalities such as the City of Memphis are fretting that vacated retail centers will be an eyesore and drag down property values.
With little interest from the private sector for these class C malls, government entities are often acquiring them, tearing them down and replacing them with community centers, libraries and other public uses. The Sears bankruptcy will initially shutter 142 stores, many that will undoubtedly set the stage for the sale of more class C malls, and new opportunities for municipalities to enter the real estate business.