‘Zombie malls’: Not fully alive, but not dead yet

A dying enclosed mall can stay open for years: here's what a mall in decline looks like

Today's expression: Put off
Explore more: Lesson #657
March 14, 2024:

What happens to a large shopping mall after the biggest stores close? The mall often stays open in a zombie state: fewer customers, lower quality, and a depressing vibe. But they can still be profitable under the right circumstances.

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Is a mall still a mall if there aren’t any shoppers? It’s not a moot point. America is full of dying shopping centers, with ever-fewer customers. Welcome to the zombie mall.

Lesson summary

Hi there everyone, it’s Jeff and this is Plain English for Thursday, March 14, 2024. Here at Plain English, we help you upgrade your skills in English with stories about current events and trending topics. And in every episode, we show you how to use an English expression.

Today, the story is a continuation of Monday’s story about the mall. On Monday, you learned that trends are shifting away from indoor shopping malls , the kind that were so popular in the 1980s and 1990s. And today, you’ll learn about something called a “zombie mall.” That’s a mall that’s dying…but not quite dead yet.

In the second half of today’s lesson, you’ll learn how to use the English expression “put off.”

This is lesson number 657. That means JR, our producer, has uploaded the full lesson content to PlainEnglish.com/657. And that includes the free transcript. So if you want to read along as you listen…that’s the place to do it. PlainEnglish.com/657.

Let’s get going.

Meet me at the ‘zombie mall’

In pop culture, malls are buzzing with activity , the backdrop to social drama and comfortable, suburban life. But that’s not the full story—at least not anymore . A lot of malls in the United States are in a “zombie” phase —a phase where they’re not quite dead, but not fully alive either.

Remember what we talked about on Monday : one, America has too many malls; and two, consumer preferences have shifted away from this type of shopping. Put these two factors together and you can see the problem: the number of shoppers simply doesn’t justify the amount of space that has been built.

So that means some malls are out of luck . These are the malls that are in less-wealthy areas , the malls that are older, the malls that can’t compete with newer properties nearby, or the malls that are just too far from the local population . These are the malls that are at risk of entering the zombie phase.

Here’s how a mall goes from being a thriving shopping center into a “zombie mall.” It all starts with fewer shoppers and less sales . Retailers pay rent to malls based on the sales they generate in the store. If there are fewer shoppers, if sales start to fall, then retailers have two options: they can close the store or they can negotiate their rent downward. Either way , it’s bad for the mall owner.

When stores close and vacancies rise , mall owners scramble to fill the empty space with other tenants . But all the typical mall tenants face the same economics. So when stores close, it’s not easy to replace them with a similar store.

So mall owners often turn to other types of tenants, tenants that you might not associate with an indoor mall. They try to recruit movie theaters , grocery stores , and gyms, hoping they’ll attract more shoppers to the mall. If that doesn’t work, they might convert some space into call centers, offices for nonprofits, government offices, or schools.

But those tenants can’t afford the high rents of the past. So think about this. Mall owners make less rent from their space. But they still have to pay their fixed costs: electricity, heat , security, taxes , and insurance . So what can they do?

They cut costs where they can. They don’t invest as much in marketing . They put off indoor maintenance projects . They don’t resurface the parking lot as much as they once did. They cut cleaning expenses . They may reduce opening hours.

The retailers who remain look at this and think: “We’re not getting the same value for our rent as we used to .” So they negotiate discounts on their rents, furthering the downward spiral of the mall’s finances.

For many mall owners, the answer is to default on their loans . That means they stop paying their mortgages and they turn the property over to their lenders . Lenders then quickly sell the properties at a steep discount to other investors, who specialize in owning struggling malls .

From there, the cycle continues. The zombie malls have new owners, and those owners bought the asset cheap. They bought it cheap and they run it cheap. They cut costs and manage the mall’s decline, hoping to make enough of a profit before the mall has to close for good .

For shoppers, it’s depressing . The parking lot is full of potholes . There might be leaks or bad smells inside. Entire wings are dark , with only empty storefronts and “ for rent ” signs. The corridors, once buzzing with activity, are eerily quiet . The food court is a ghost town . The whole place looks like it needs a good deep cleaning . Yes , it’s still open. Yes, you can go in and wander around . Yes, there are a few stores still open. But going to a zombie mall is an empty, depressing experience.

If this were any business other than real estate , the business would shut down forever . But a mall is a big place, and it can’t easily be repurposed into something else. Owners can’t snap their fingers and make it an office park, a school, warehouses, or apartments. To do that requires more investment for an uncertain return . Just tearing the building down can cost many millions of dollars.

So the investor owners hold onto these “zombie malls” and try to squeeze some value out of them while they still can. The properties are dying a long, slow, painful , embarrassing death —but for the owners, owning a zombie mall is still better than any alternative. While they’re dying, the malls are still profitable for the owners who bought them at a steep discount.

These malls are a problem for the towns and cities where they’re located. Local governments fund schools and local services through property taxes . Property tax is based on the value of the property. As malls’ values slowly—or quickly—fall, the local property tax revenue also falls, squeezing budgets for schools and other services.

Local governments can’t do much to reverse the decline . They can’t force an owner to tear down a mall and build something else. One city manager said she wishes a large sinkhole would open up and swallow the mall at night, allowing them to build something else on that site.

What comes next? About 150 large, enclosed malls have closed since 2008, leaving about 950 in the U.S. Green Street, a data provider , estimates that a third of them will close in the next 15 to 20 years.

Jeff’s take

If you go to the transcript and find a section called “Dig deeper ,” you’ll see a link to a video that takes you through a zombie mall. It’s a really good video. They walk through the mall. You can see what it was like, once upon a time, and see just how empty and depressing it is today.

You can see the directory with almost every store name blanked out , a fire alarm is going off and nobody seems to notice, the escalators aren’t moving, the fountain is dry, there’s trash and graffiti everywhere. It’s depressing. Anyway, watch that video—see what these look like. PlainEnglish.com/657 and find the section called “Dig deeper.”

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Expression: Put off