- Compass Point said the top 30 malls in the U.S., based on tenants' annual sales and the underlying real estate were valued at more than $57 billion total before the pandemic.
- These malls contributed an estimated $1.8 billion of annual tax revenue to states.
- "The pandemic will have a significant impact on tenant sales and tax collection as the government mandated shutdown could reduce sales this year by up to 33%, based on our estimates," Compass Point analyst Floris van Dijkum said.
Before the coronavirus hit, America's most valuable malls were driving billions of dollars in sales annually, contributing hundreds of millions of dollars to local tax coffers.
Now, nobody knows what those numbers are going to look like coming out of the Covid-19 crisis — other than definitely being a lot less.
Malls started temporarily shutting down in March to try to help curb the spread of the virus. In some states, such as New York, malls have still not been able to completely reopen. Gov. Andrew Cuomo, for example, has said that New York malls will need high-quality air systems that can filter out the coronavirus before they will be allowed to open their doors again.
Many shoppers, meantime, are hesitant to return to malls after staying at home and practicing social distancing. And some smaller shops and entertainment venues like movie theaters are not jumping to reopen right away, even if the mall is back open for business and department store lights are on.
Macy's Chief Executive Jeff Gennette said during a conference call earlier this week: "In the malls that are open, many of the other stores and services remain closed. This does impact our store traffic."
Some companies are beginning to close their doors in malls for a second time, as Covid-19 cases rise in parts of the country. Apple is reshutting dozens of stores in states like Florida and South Carolina. And Microsoft has said it plans to close all of its bricks-and-mortar stores for good, pivoting its business to 100% online.
This all spells trouble for America's malls, even the best of the best.
An analysis by the independent investment firm Compass Point found the top 30 malls in the U.S., based on tenants' annual sales and the underlying real estate, were valued at more than $57 billion and contributed an estimated $1.8 billion of annual tax revenue to states, pre-Covid-19.
"The pandemic will have a significant impact on tenant sales and tax collection as the government mandated shutdown could reduce sales this year by up to 33%, based on our estimates," Compass Point analyst Floris van Dijkum said. "Lower state tax receipts will likely pressure budgets and force cutbacks to services."
CNBC previously reported on the impact this could have on communities that depend on their malls to fund schools and police infrastructures, among other things.
The consequences include unpaid bills by some mall owners not being able to pay their own bills. Tennessee-based CBL & Associates has skipped two interest payments and has entered into a forbearance period with its lenders. The Mall of America didn't make its mortgage payment.
"The financial profiles of many [mall] tenants has been damaged, and it will remain that way for awhile," said Neill Kelly, commercial real estate services firm CBRE's head of restructuring in North America.
Two of the biggest mall owners in the U.S., Simon Property Group and Brookfield, rank high on the list of top malls, operating several of those properties. Some of them are in current Covid-19 hot spots, including Texas and Florida.
Here are the top 10 most valuable malls in the country, based on their tenants' sales before the pandemic, as reported by Compass Point.
10. Houston Galleria
Owner: Simon and Calpers
Annual sales: $1.03 billion
9. Orlando Premium Outlets
Location: Orlando, Florida
Annual sales: $1.06 billion
8. Roosevelt Field
Location: Garden City, New York
Annual sales: $1.08 billion
7. Mall of America
Location: Bloomington, Minnesota
Owner: Triple Five Group
Annual sales: $1.26 billion
6. South Coast Plaza
Location: Costa Mesa, California
Owner: The Segerstrom family
Annual sales: $1.27 billion
5. Woodbury Common
Location: Central Valley, New York
Annual sales: $1.3 billion
4. Aventura Mall
Location: Aventura, Florida
Owner: Simon and Turnberry Associates
Annual sales: $1.35 billion
3. King of Prussia
Location: King of Prussia, Pennsylvania
Annual sales: $1.37 billion
2. Ala Moana Center
Owner: Brookfield and AustralianSuper
Annual sales: $1.64 billion
1. Sawgrass Mill
Location: Sunrise, Florida
Annual sales: $1.81 billion
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