WEBVTT 00:00:00.000 --> 00:00:02.799 I want you to picture a specific place with me 00:00:02.799 --> 00:00:05.940 for a second. Let's say it's 1998. You're walking 00:00:05.940 --> 00:00:08.699 into the Century Third Mall in West Mifflin, 00:00:08.720 --> 00:00:13.240 Pennsylvania. And this place is... It's just 00:00:13.240 --> 00:00:15.740 massive. I mean, we are talking about a structure 00:00:15.740 --> 00:00:18.300 the size of a small city. It's a sensory imprint, 00:00:18.460 --> 00:00:20.280 isn't it? A lot of us have that locked in our 00:00:20.280 --> 00:00:23.000 brains. Yes. You hear the fountains and they 00:00:23.000 --> 00:00:25.300 have these huge, like, multi -story fountains 00:00:25.300 --> 00:00:28.039 and you just hear the murmur of thousands of 00:00:28.039 --> 00:00:30.859 people. The air smells like that very specific 00:00:30.859 --> 00:00:34.039 mix of chlorinated water, Annie Ann's pretzels, 00:00:34.039 --> 00:00:36.399 and, you know, department store perfume. It's 00:00:36.399 --> 00:00:38.119 the sound and the smell of American commerce 00:00:38.119 --> 00:00:40.159 at its absolute peak. It's a very distinct memory. 00:00:40.359 --> 00:00:42.780 Right. Okay, so now fast forward. It's 2019. 00:00:42.979 --> 00:00:45.460 You walk into that exact same space. The skylights 00:00:45.460 --> 00:00:47.280 are cracked. They're letting in water. There's 00:00:47.280 --> 00:00:50.020 a layer of dust on the thick ficus trees. The 00:00:50.020 --> 00:00:52.840 fountains are bone dry. And the tiles, these 00:00:52.840 --> 00:00:55.299 like famous blueberry colored tiles Century III 00:00:55.299 --> 00:00:58.119 had, they're just covered in debris. And it's 00:00:58.119 --> 00:01:00.500 silent. It is dead silent. You are standing in 00:01:00.500 --> 00:01:03.140 a space built for noise, for crowds, and all 00:01:03.140 --> 00:01:05.400 you can hear is your own breathing. It's an incredibly 00:01:05.400 --> 00:01:08.840 jarring contrast. And Century III is, I think, 00:01:08.840 --> 00:01:11.370 the perfect place to start. Because it wasn't 00:01:11.370 --> 00:01:14.030 just a mall. At one point, it was the third largest 00:01:14.030 --> 00:01:16.349 shopping mall in the world. Third largest in 00:01:16.349 --> 00:01:19.769 the world. It went from a global titan to eventually 00:01:19.769 --> 00:01:22.010 the world's largest abandoned structure of its 00:01:22.010 --> 00:01:24.890 kind. Yeah. At least before they finally started 00:01:24.890 --> 00:01:28.129 demolition. It's the entire life cycle in one 00:01:28.129 --> 00:01:30.200 building. And that's the journey we're taking 00:01:30.200 --> 00:01:32.760 today. We are doing a deep dive into the world 00:01:32.760 --> 00:01:34.780 of dead malls. And I want to be really clear 00:01:34.780 --> 00:01:37.439 right from the start. This isn't just about why 00:01:37.439 --> 00:01:39.519 you can't buy a pair of jeans at the local Gap 00:01:39.519 --> 00:01:41.400 anymore. We're not just doing a, you know, a 00:01:41.400 --> 00:01:44.019 nostalgia trip. No, not at all. Although nostalgia 00:01:44.019 --> 00:01:46.500 is a really potent part of why we're so fascinated 00:01:46.500 --> 00:01:49.159 by this. What we're really looking at here is 00:01:49.159 --> 00:01:52.099 a massive structural shift in our economy, in 00:01:52.099 --> 00:01:54.819 urban planning, and frankly, in how we interact 00:01:54.819 --> 00:01:56.939 with each other as a community. We've got a whole 00:01:56.939 --> 00:01:59.879 stack of sources here that go way, way beyond 00:01:59.879 --> 00:02:02.680 that simple headline of Amazon killed the mall. 00:02:03.099 --> 00:02:05.260 We're going to look at the legal contracts that 00:02:05.260 --> 00:02:07.659 basically act like trap doors for these buildings, 00:02:07.819 --> 00:02:10.219 the vulture capitalists who actually profit from 00:02:10.219 --> 00:02:12.439 letting them rot. And then the really strange 00:02:12.439 --> 00:02:15.319 second lives that some of these concrete behemoths 00:02:15.319 --> 00:02:17.639 are finding. And I think it's important we define 00:02:17.639 --> 00:02:20.120 our terms first, because when we say dead mall, 00:02:20.300 --> 00:02:22.629 we aren't just being poetic or dramatic. Right. 00:02:22.729 --> 00:02:25.069 Is there a technical definition for this? Or 00:02:25.069 --> 00:02:27.389 is it just a vibe, you know? The difference between 00:02:27.389 --> 00:02:30.129 I can't find a parking spot and I can park right 00:02:30.129 --> 00:02:31.669 by the front door. There's a little more to it 00:02:31.669 --> 00:02:34.389 than that, yeah. In the industry, a dead mall, 00:02:34.610 --> 00:02:37.610 you'll also hear terms like grayfield or zombie 00:02:37.610 --> 00:02:41.009 mall, is usually defined by high vacancy rates. 00:02:41.129 --> 00:02:44.780 We're talking 40 % or more. 40%, so almost half 00:02:44.780 --> 00:02:47.460 empty. At least. And that's combined with low 00:02:47.460 --> 00:02:49.860 consumer traffic and, of course, deteriorating 00:02:49.860 --> 00:02:52.860 physical conditions. But the real marker, the 00:02:52.860 --> 00:02:55.039 sort of clinical definition of death, it almost 00:02:55.039 --> 00:02:57.580 always starts with the anchor stores. Okay, let's 00:02:57.580 --> 00:03:00.419 get into that. The anatomy of the collapse. Because 00:03:00.419 --> 00:03:02.860 I think most people, myself included, just assume 00:03:02.860 --> 00:03:06.060 a mall dies because people stop showing up. But 00:03:06.060 --> 00:03:08.719 when you look at the least structures in these 00:03:08.719 --> 00:03:12.139 sources, it feels like the death is almost... 00:03:12.319 --> 00:03:14.419 I don't know, contractually programmed into them 00:03:14.419 --> 00:03:17.020 from the start. It really is. To understand why 00:03:17.020 --> 00:03:19.319 a mall dies, you have to understand how it was 00:03:19.319 --> 00:03:22.039 built, financially speaking. The entire ecosystem, 00:03:22.259 --> 00:03:25.500 the whole model, relies on those anchors, the 00:03:25.500 --> 00:03:28.680 Macy's, the Sears, the JCPenney's of the world. 00:03:28.759 --> 00:03:30.939 The big boxes at the ends of the hallways, the 00:03:30.939 --> 00:03:33.780 main attractions. Exactly. But here's the thing 00:03:33.780 --> 00:03:36.639 that I find surprises most people. Those big 00:03:36.639 --> 00:03:39.520 giant stores, they essentially pay nothing in 00:03:39.520 --> 00:03:41.680 rent. Wait, hold on a second. They take up the 00:03:41.680 --> 00:03:43.520 most prime real estate. They've got the massive 00:03:43.520 --> 00:03:44.979 signage. You're telling me they aren't paying 00:03:44.979 --> 00:03:46.800 the most rent. In a lot of the classic mall deals, 00:03:47.020 --> 00:03:50.539 they pay zero rent. Or they own their own building 00:03:50.539 --> 00:03:54.479 outright and just pay a very small fee for common 00:03:54.479 --> 00:03:56.560 area maintenance. Keeping the parking lot paved, 00:03:56.680 --> 00:03:58.500 paying for the lights, that sort of thing. The 00:03:58.500 --> 00:04:00.699 mall developer gives them this unbelievable sweetheart 00:04:00.699 --> 00:04:04.840 deal because they are the bait. The bait. That's 00:04:04.840 --> 00:04:06.680 a good way to put it. They're there to draw the 00:04:06.680 --> 00:04:09.280 traffic. You go to the mall specifically to buy 00:04:09.280 --> 00:04:11.789 a refrigerator at Sears. But on your way from 00:04:11.789 --> 00:04:14.610 the parking lot to Sears, you pass the Gap, you 00:04:14.610 --> 00:04:16.629 pass the Candle Store, you pass the Pretzel Stand. 00:04:16.810 --> 00:04:19.050 Those are the in -line tenants. Okay. And they 00:04:19.050 --> 00:04:21.670 are the ones paying massive rent premiums. I 00:04:21.670 --> 00:04:25.269 mean, sometimes 10, even 20 times more per square 00:04:25.269 --> 00:04:27.350 foot than an anchor would. Because what they're 00:04:27.350 --> 00:04:29.910 really paying for is access to the foot traffic 00:04:29.910 --> 00:04:32.209 that Sears is supposed to be generating. So the 00:04:32.209 --> 00:04:34.850 pretzel stand is effectively subsidizing the 00:04:34.850 --> 00:04:37.930 giant department store. Financially, yes. That's 00:04:37.930 --> 00:04:40.149 the model. The small stores are the profit engine 00:04:40.149 --> 00:04:42.550 for the developer. The big stores are the fuel 00:04:42.550 --> 00:04:46.399 that makes the engine run. But this creates a 00:04:46.399 --> 00:04:48.480 huge, huge vulnerability. It's something called 00:04:48.480 --> 00:04:51.360 a co -tenancy clause. I saw this term pop up 00:04:51.360 --> 00:04:53.199 again and again in the legal briefs we looked 00:04:53.199 --> 00:04:55.500 at. You have to break this down for us because 00:04:55.500 --> 00:04:57.519 this really does seem to be the smoking gun. 00:04:57.699 --> 00:05:00.160 It is the trap door I mentioned. A co -tenancy 00:05:00.160 --> 00:05:03.100 clause is a line, a little piece of text, in 00:05:03.100 --> 00:05:05.079 the lease contract for all those smaller stores, 00:05:05.259 --> 00:05:08.120 the Sunglass Hut, the GameStop, whoever. And 00:05:08.120 --> 00:05:11.139 it basically says, I, the small store owner, 00:05:11.300 --> 00:05:15.189 agree to pay this incredibly high rent. But only 00:05:15.189 --> 00:05:17.529 if the anchor stores are open and operating. 00:05:17.769 --> 00:05:21.170 Oh, I see exactly where this is going. It creates 00:05:21.170 --> 00:05:23.870 a catastrophic domino effect. Let's say Sears 00:05:23.870 --> 00:05:26.509 closes its stores. It's just one store out of 00:05:26.509 --> 00:05:29.350 100, right? It seems manageable. But the moment 00:05:29.350 --> 00:05:32.769 it closes, that co -tenancy clause can trigger 00:05:32.769 --> 00:05:35.850 for, say, 20 other stores in that wing of the 00:05:35.850 --> 00:05:38.189 mall. And what does that mean, trigger? It means 00:05:38.189 --> 00:05:40.230 they are now legally allowed to break their leases 00:05:40.230 --> 00:05:43.100 and just leave without any penalty. Or, more 00:05:43.100 --> 00:05:45.300 commonly, they can switch from paying their high 00:05:45.300 --> 00:05:48.079 fixed rent to paying a much, much smaller percentage 00:05:48.079 --> 00:05:50.600 of their sales. And if sales are already down, 00:05:50.839 --> 00:05:53.120 that's next to nothing. So the mall owner doesn't 00:05:53.120 --> 00:05:55.600 just lose the one big anchor. They instantly 00:05:55.600 --> 00:05:58.160 lose all the financial leverage they had over 00:05:58.160 --> 00:06:00.920 the entire building. Overnight. Your revenue 00:06:00.920 --> 00:06:03.660 doesn't just dip, it drops off a cliff. But the 00:06:03.660 --> 00:06:05.959 cost to run that mall, the electricity for those 00:06:05.959 --> 00:06:09.180 giant open spaces, the security guards, the massive 00:06:09.180 --> 00:06:12.540 HVAC systems needed to heat and cool a million 00:06:12.540 --> 00:06:15.779 square feet. That stays exactly the same. And 00:06:15.779 --> 00:06:18.060 that's when the death spiral starts. Because 00:06:18.060 --> 00:06:19.899 if you can't pay to fix the air conditioning, 00:06:20.139 --> 00:06:22.100 the mall gets hot and miserable in the summer. 00:06:22.439 --> 00:06:24.980 If you can't pay for security, it starts to feel 00:06:24.980 --> 00:06:27.439 unsafe. And then even more people stop coming. 00:06:27.639 --> 00:06:30.500 Precisely. It's a financial mechanism that just 00:06:30.500 --> 00:06:32.879 dramatically accelerates the decline. It turns 00:06:32.879 --> 00:06:35.439 a stumble into an absolute freefall. The building 00:06:35.439 --> 00:06:37.519 is designed to bleed out. But we still have to 00:06:37.519 --> 00:06:39.319 ask why the anchor started failing in the first 00:06:39.319 --> 00:06:41.740 place. I mean, the easy answer is always the 00:06:41.740 --> 00:06:44.180 internet. We all just started clicking add to 00:06:44.180 --> 00:06:46.519 cart. But the timeline doesn't fully support 00:06:46.519 --> 00:06:49.199 that, does it? The problem started earlier. No, 00:06:49.240 --> 00:06:52.439 not at all. The cracks were showing long before 00:06:52.439 --> 00:06:55.560 Amazon Prime shipping became a daily habit for 00:06:55.560 --> 00:06:58.379 millions. Before we even get to the Internet, 00:06:58.639 --> 00:07:01.620 we have to talk about the category killers. The 00:07:01.620 --> 00:07:04.379 category killers. That sounds like a 90s action 00:07:04.379 --> 00:07:07.139 movie villain. It's a brutal term, but it was 00:07:07.139 --> 00:07:09.839 a brutal business shift. We're talking about 00:07:09.839 --> 00:07:12.740 the rise of the big box chains. Your Walmart, 00:07:12.899 --> 00:07:16.649 your Target, Best Buy, Home Depot. In the 90s, 00:07:16.649 --> 00:07:19.230 and especially the early 2000s, these stores 00:07:19.230 --> 00:07:21.829 completely changed the geometry of American shopping. 00:07:21.949 --> 00:07:23.470 Because they didn't want to be inside the mall. 00:07:23.610 --> 00:07:26.160 No. I mean, just think about the logistics. If 00:07:26.160 --> 00:07:28.100 you're going to Best Buy to get a new 60 -inch 00:07:28.100 --> 00:07:30.899 TV, do you really want to park in a massive garage, 00:07:31.199 --> 00:07:33.720 walk through a food court, maybe take an escalator, 00:07:33.800 --> 00:07:36.220 and then try to drag that enormous box all the 00:07:36.220 --> 00:07:38.600 way back out? Absolutely not. No. I want to pull 00:07:38.600 --> 00:07:40.519 my car right up to the curb, have someone help 00:07:40.519 --> 00:07:43.560 me load it in, and drive away. Exactly. The category 00:07:43.560 --> 00:07:46.699 killers prefer their own purpose -built freestanding 00:07:46.699 --> 00:07:48.839 buildings or these things called power centers, 00:07:48.959 --> 00:07:51.160 which are just collections of big box stores 00:07:51.160 --> 00:07:53.850 with a giant shared parking lot. This change 00:07:53.850 --> 00:07:56.750 pulled all the utility shopping, the electronics, 00:07:56.990 --> 00:07:59.689 the home goods, the basic clothing. It pulled 00:07:59.689 --> 00:08:01.990 it right out of the enclosed mall. The mall was 00:08:01.990 --> 00:08:03.990 then left with just lifestyle shopping, things 00:08:03.990 --> 00:08:06.370 you don't strictly need. Which is a much harder, 00:08:06.449 --> 00:08:09.430 much more fickle market to sustain. And then 00:08:09.430 --> 00:08:11.449 on top of that, you have the lifestyle center 00:08:11.449 --> 00:08:13.970 trend itself. Which is really just a fancy modern 00:08:13.970 --> 00:08:16.649 term for an open air mall that's designed to 00:08:16.649 --> 00:08:19.769 look like a sort of fake idealized main street. 00:08:20.379 --> 00:08:22.680 I feel like every suburb in America has one of 00:08:22.680 --> 00:08:25.120 these now. It's got the nice wide sidewalks, 00:08:25.120 --> 00:08:26.740 maybe a fountain in the middle, some pleasant 00:08:26.740 --> 00:08:29.500 music piped in. But you can drive right up to 00:08:29.500 --> 00:08:32.200 the individual stores. It feels less, I don't 00:08:32.200 --> 00:08:34.259 know, less claustrophobic than an old mall. It 00:08:34.259 --> 00:08:36.379 feels more efficient. And in most of the United 00:08:36.379 --> 00:08:39.519 States, developers pivoted very, very hard toward 00:08:39.519 --> 00:08:42.100 this model. Now, it's worth noting the climate 00:08:42.100 --> 00:08:43.779 difference that some of the sources point out. 00:08:44.059 --> 00:08:46.500 In Canada, for instance, the classic enclosed 00:08:46.500 --> 00:08:49.059 mall is still holding on much stronger. Because 00:08:49.059 --> 00:08:51.779 it's freezing for half the year. Right. For them, 00:08:51.860 --> 00:08:54.679 the enclosed mall is a climate solution. If you're 00:08:54.679 --> 00:08:57.139 in Montreal or Toronto in February, you absolutely 00:08:57.139 --> 00:08:59.159 want to be indoors. But if you're in Texas or 00:08:59.159 --> 00:09:01.860 Florida or Southern California, that open -air 00:09:01.860 --> 00:09:04.419 lifestyle center is much more appealing year 00:09:04.419 --> 00:09:07.659 -round. But there's a bigger sort of macroeconomic 00:09:07.659 --> 00:09:10.460 factor at play here that we just can't ignore. 00:09:10.600 --> 00:09:13.299 And it's the simple fact that we just... built 00:09:13.299 --> 00:09:15.940 too many of them. Way too many. The oversupply 00:09:15.940 --> 00:09:18.500 data from Callen Research was, as you said earlier, 00:09:18.740 --> 00:09:20.840 just staggering. It's hard to wrap your head 00:09:20.840 --> 00:09:23.840 around. I mean, get this. Between 1970 and 2015, 00:09:24.220 --> 00:09:26.500 the amount of mall square footage in the U .S. 00:09:26.500 --> 00:09:28.860 grew more than twice as fast as the population. 00:09:29.080 --> 00:09:31.399 Let that sink in. Twice as fast. So we didn't 00:09:31.399 --> 00:09:33.360 have twice as many people and our wages certainly 00:09:33.360 --> 00:09:35.580 didn't double in real terms during that period. 00:09:35.620 --> 00:09:37.759 But for some reason, we decided we needed twice 00:09:37.759 --> 00:09:40.100 the retail space. It makes no sense. The United 00:09:40.100 --> 00:09:43.470 States has per capita. 40 % more shopping space 00:09:43.470 --> 00:09:46.590 than Canada. And get this, five times more than 00:09:46.590 --> 00:09:48.909 the United Kingdom. Five times. Why? I mean, 00:09:48.909 --> 00:09:52.529 was it just boundless American optimism? A belief 00:09:52.529 --> 00:09:55.169 that the boom would never end? It was partly 00:09:55.169 --> 00:09:58.029 that, but it was also tax policy. This gets a 00:09:58.029 --> 00:10:00.649 little into the weeds, but we have to look at 00:10:00.649 --> 00:10:02.690 something called the Economic Recovery Tax Act 00:10:02.690 --> 00:10:05.950 of 1981. Okay. Translate that for those of us 00:10:05.950 --> 00:10:08.600 who are not accountants. Basically, the government 00:10:08.600 --> 00:10:11.320 created a massive tax shelter for commercial 00:10:11.320 --> 00:10:13.779 real estate development. It allowed developers 00:10:13.779 --> 00:10:16.039 to depreciate the value of a commercial building 00:10:16.039 --> 00:10:20.279 over just 15 years, which is an incredibly accelerated 00:10:20.279 --> 00:10:23.120 timeline. Meaning they could get a huge tax write 00:10:23.120 --> 00:10:25.940 -off every year. A colossal one. You could literally 00:10:25.940 --> 00:10:28.220 build a mall, lose money on the day -to -day 00:10:28.220 --> 00:10:30.919 operations, but make an absolute fortune by writing 00:10:30.919 --> 00:10:33.320 off the building's depreciation against your 00:10:33.320 --> 00:10:35.879 other taxable income. Yeah. It incentivized building 00:10:35.879 --> 00:10:37.840 malls that didn't even need to be profitable 00:10:37.840 --> 00:10:40.279 on their own terms to make the developers incredibly 00:10:40.279 --> 00:10:42.700 rich. So we flooded the market with an artificial 00:10:42.700 --> 00:10:45.779 supply of retail space driven by tax loopholes, 00:10:45.799 --> 00:10:49.080 not actual consumer demand. Exactly. And eventually 00:10:49.080 --> 00:10:51.860 those tax loopholes started to close. The financial 00:10:51.860 --> 00:10:54.240 bill came due and we were left with a landscape 00:10:54.240 --> 00:10:56.799 just saturated with these retail cathedrals that 00:10:56.799 --> 00:10:59.860 suddenly had no congregation. The year 2007 was 00:10:59.860 --> 00:11:02.899 the very first year since the 1950s that not 00:11:02.899 --> 00:11:06.120 a single new enclosed mall was built in the entire 00:11:06.120 --> 00:11:08.600 United States. That date really marks the end 00:11:08.600 --> 00:11:10.620 of an era. The bubble had officially popped. 00:11:10.879 --> 00:11:13.620 It did. But what happens next, as these places 00:11:13.620 --> 00:11:16.000 start to fail, is where the story gets really 00:11:16.000 --> 00:11:18.720 dark. Because for some of these malls, the death 00:11:18.720 --> 00:11:21.379 isn't from natural causes. In some cases, it's 00:11:21.379 --> 00:11:24.460 murder. This brings us to the section on demolition 00:11:24.460 --> 00:11:26.710 by neglect. And I have to say, reading about 00:11:26.710 --> 00:11:28.750 some of these companies like Namdar Realty Group 00:11:28.750 --> 00:11:31.950 or Moonbeam Capital, it honestly just made me 00:11:31.950 --> 00:11:34.529 angry. It feels so incredibly cynical. It is 00:11:34.529 --> 00:11:36.669 deeply cynical, but in their eyes, it's just 00:11:36.669 --> 00:11:38.909 cold math. To understand it, we have to talk 00:11:38.909 --> 00:11:41.470 about the concept of a covered land play. Explain 00:11:41.470 --> 00:11:43.730 that, because my logic is, if I buy a business, 00:11:43.870 --> 00:11:46.029 I want that business to succeed. Why on earth 00:11:46.029 --> 00:11:48.230 would I buy a multi -million dollar mall just 00:11:48.230 --> 00:11:50.409 to stand by and let the roof leak? Because the 00:11:50.409 --> 00:11:53.539 business isn't the mall. The business is the 00:11:53.539 --> 00:11:56.320 dirt underneath the mall. Let's say you have 00:11:56.320 --> 00:11:58.860 a dying mall that's sitting on 50 acres of prime 00:11:58.860 --> 00:12:01.620 real estate right next to a major highway interchange. 00:12:03.080 --> 00:12:05.299 The building itself is becoming a liability. 00:12:05.580 --> 00:12:08.039 It costs millions a year just to heat and cool. 00:12:08.299 --> 00:12:12.399 But the land in a growing suburb, that land is 00:12:12.399 --> 00:12:14.860 gold. So the building is actually in the way 00:12:14.860 --> 00:12:18.139 of the real asset. Precisely. So a covered land 00:12:18.139 --> 00:12:21.970 play is when an investor. often a private equity 00:12:21.970 --> 00:12:24.669 firm or a specialized group, buys the property 00:12:24.669 --> 00:12:26.690 not for the rental income from the remaining 00:12:26.690 --> 00:12:29.250 tenants, but because the value of the land itself 00:12:29.250 --> 00:12:31.629 exceeds the purchase price of the whole property. 00:12:31.789 --> 00:12:33.549 So they're betting on the future. They're betting 00:12:33.549 --> 00:12:35.750 that eventually that mall will have to be demolished 00:12:35.750 --> 00:12:38.730 and they can sell that huge parcel of land for 00:12:38.730 --> 00:12:40.889 a massive profit to someone who wants to build 00:12:40.889 --> 00:12:43.870 condos or an Amazon warehouse or a big mixed 00:12:43.870 --> 00:12:46.470 -use development. Okay, so in the meantime, while 00:12:46.470 --> 00:12:48.809 they wait for the right moment to rezone or sell... 00:12:49.470 --> 00:12:51.710 What did they do with the building? They harvest 00:12:51.710 --> 00:12:54.110 the asset. This is the demolition by neglect 00:12:54.110 --> 00:12:57.809 part. Companies like Namdar or Mason Asset Management, 00:12:58.049 --> 00:13:00.750 and to be fair, they always dispute these characterizations, 00:13:00.809 --> 00:13:03.529 but the pattern is documented across dozens of 00:13:03.529 --> 00:13:05.909 properties. They buy them all for pennies on 00:13:05.909 --> 00:13:09.029 the dollar out of foreclosure. Then they slash 00:13:09.029 --> 00:13:11.389 the operating budget for security, for cleaning, 00:13:11.549 --> 00:13:15.529 for maintenance, down to almost zero. So every 00:13:15.529 --> 00:13:17.809 single dollar of rent they collect from the few 00:13:17.809 --> 00:13:19.509 tenants who are still trapped there is basically 00:13:19.509 --> 00:13:21.669 pure profit because they aren't spending a dime 00:13:21.669 --> 00:13:23.990 on upkeep. That's the strategy. They squeeze 00:13:23.990 --> 00:13:26.190 the last remaining drops of life out of the lemon. 00:13:26.509 --> 00:13:29.690 If the main HVAC unit breaks, they don't fix 00:13:29.690 --> 00:13:32.289 it. If the parking lot develops craters the size 00:13:32.289 --> 00:13:34.779 of the small car, they just leave them. They 00:13:34.779 --> 00:13:37.460 cut costs by disabling safety components like 00:13:37.460 --> 00:13:39.580 fire suppression systems. That sounds exactly 00:13:39.580 --> 00:13:42.299 like being a slumlord. It is effectively commercial 00:13:42.299 --> 00:13:45.240 slumland tactics. They're extracting every bit 00:13:45.240 --> 00:13:48.039 of cash value while the physical asset decurates 00:13:48.039 --> 00:13:50.179 around them. And here's the most cynical part. 00:13:51.179 --> 00:13:54.320 Eventually, the condition gets so bad that the 00:13:54.320 --> 00:13:57.080 city might condemn the building or the last remaining 00:13:57.080 --> 00:13:59.820 tenants just give up and flee. And that actually 00:13:59.820 --> 00:14:01.600 helps the developer. It helps them to have an 00:14:01.600 --> 00:14:04.580 empty, condemned building. How? Sure. Think about 00:14:04.580 --> 00:14:06.820 it. If you want to bulldoze the place and build 00:14:06.820 --> 00:14:09.340 a thousand new apartments, the hardest and most 00:14:09.340 --> 00:14:11.539 expensive part is often buying out the leases 00:14:11.539 --> 00:14:14.139 of the existing stores. But if you make the mall 00:14:14.139 --> 00:14:17.320 so unbearable to be in, it's 95 degrees inside 00:14:17.320 --> 00:14:19.659 in July, there's no security, the roof is leaking 00:14:19.659 --> 00:14:21.720 onto their merchandise, the tenants leave on 00:14:21.720 --> 00:14:24.299 their own, you clear the building for free. That 00:14:24.299 --> 00:14:26.980 is diabolical. You are essentially torturing 00:14:26.980 --> 00:14:28.639 your own tenants so that they evict themselves. 00:14:29.139 --> 00:14:31.700 It's a strategy known as distressed asset management. 00:14:32.379 --> 00:14:34.659 And you can see the scars of this all over the 00:14:34.659 --> 00:14:37.139 country. Look at Harbor Place in Baltimore or 00:14:37.139 --> 00:14:39.399 the Burlington Center in New Jersey. And you 00:14:39.399 --> 00:14:41.460 see these companies try to pull off these little 00:14:41.460 --> 00:14:44.220 Band -Aid fixes to pretend they're trying to 00:14:44.220 --> 00:14:47.299 keep the city off their back. The Eat at National 00:14:47.299 --> 00:14:50.120 Place food hall in D .C. is a perfect example 00:14:50.120 --> 00:14:52.320 from our sources. I remember reading about that 00:14:52.320 --> 00:14:54.279 one. They just slapped a trendy food hall into 00:14:54.279 --> 00:14:57.340 a dying downtown shopping center. It's the classic 00:14:57.340 --> 00:15:01.110 lipstick on a pig maneuver. The mall had fundamental 00:15:01.110 --> 00:15:04.049 structural and traffic flow issues. The architecture 00:15:04.049 --> 00:15:07.909 was obsolete. Putting in a few trendy food stalls 00:15:07.909 --> 00:15:10.169 doesn't fix the fact that there are no anchor 00:15:10.169 --> 00:15:13.269 tenants and the layout is a maze. It was a superficial 00:15:13.269 --> 00:15:15.570 fix that, of course, failed within two years 00:15:15.570 --> 00:15:17.789 and the whole place closed. It's just kicking 00:15:17.789 --> 00:15:19.830 the can down the road while you squeeze out the 00:15:19.830 --> 00:15:22.500 last bit of cash. So we have this perfect storm. 00:15:22.659 --> 00:15:25.019 We've got the structural setup for failure with 00:15:25.019 --> 00:15:27.139 the co -tenancy clauses. And then we have these 00:15:27.139 --> 00:15:30.059 predatory owners accelerating the decay. And 00:15:30.059 --> 00:15:32.639 then on top of all that, you have the accelerants. 00:15:32.779 --> 00:15:34.960 We touched on the Internet, but the sources point 00:15:34.960 --> 00:15:37.960 to two very specific major events, the Great 00:15:37.960 --> 00:15:41.139 Recession and, of course, COVID -19. The one 00:15:41.139 --> 00:15:43.919 -two punch that really finished the job for a 00:15:43.919 --> 00:15:46.440 lot of these places, the Great Recession in 2008. 00:15:47.250 --> 00:15:49.490 fundamentally changed the consumer psyche in 00:15:49.490 --> 00:15:52.970 America. Before that, the sort of useless luxury 00:15:52.970 --> 00:15:55.629 purchase was a standard part of American life. 00:15:55.830 --> 00:15:58.649 You went to the mall to browse, to buy a gadget 00:15:58.649 --> 00:16:00.429 from the sharper image you didn't really need. 00:16:00.470 --> 00:16:03.850 Or a $50 candle. Or another hoodie from Abercrombie. 00:16:03.950 --> 00:16:06.519 Right. It was entertainment. After 2008, with 00:16:06.519 --> 00:16:09.059 millions out of work, the consumer shifted dramatically 00:16:09.059 --> 00:16:11.200 toward value. We saw the explosive growth of 00:16:11.200 --> 00:16:14.039 TJ Maxx, Ross, the off -price retailers. These 00:16:14.039 --> 00:16:16.559 stores don't typically anchor huge enclosed malls. 00:16:16.559 --> 00:16:18.740 They sit in more efficient, cheaper strip centers. 00:16:18.919 --> 00:16:20.899 The whole habit of just strolling and browsing 00:16:20.899 --> 00:16:23.159 started to die off because people felt guilty 00:16:23.159 --> 00:16:25.000 about spending money they didn't have on things 00:16:25.000 --> 00:16:27.639 they didn't need. And people just had less time, 00:16:27.740 --> 00:16:31.100 too. The efficiency of a big box store or a strip 00:16:31.100 --> 00:16:33.700 mall became more valuable. That's a huge point. 00:16:33.860 --> 00:16:36.720 Time became a major factor. But then, just as 00:16:36.720 --> 00:16:38.559 things were starting to stabilize into this new 00:16:38.559 --> 00:16:41.220 normal, came COVID. Which was the gasoline on 00:16:41.220 --> 00:16:43.620 an already raging fire. It didn't start the fire, 00:16:43.700 --> 00:16:46.980 but it absolutely poured gasoline on it. It wasn't 00:16:46.980 --> 00:16:49.120 just the temporary lockdowns forcing these places 00:16:49.120 --> 00:16:52.080 to close for months. It was the precarious financial 00:16:52.080 --> 00:16:54.659 state of the retailers entering the pandemic. 00:16:55.210 --> 00:16:57.950 A lot of these classic mall brands, JCPenney, 00:16:58.049 --> 00:17:00.509 Neiman Marcus, J .Crew, Brooks Brothers, were 00:17:00.509 --> 00:17:02.629 already loaded up with billions in debt, often 00:17:02.629 --> 00:17:04.589 from private equity buyouts in the years before. 00:17:04.829 --> 00:17:06.829 So they were basically living paycheck to paycheck 00:17:06.829 --> 00:17:10.089 as multi -billion dollar corporations. That's 00:17:10.089 --> 00:17:11.509 a great way to put it. They had no cash cushion. 00:17:11.710 --> 00:17:14.230 So when their revenue suddenly hit zero for three 00:17:14.230 --> 00:17:16.769 straight months, they just collapsed. We saw 00:17:16.769 --> 00:17:19.470 this massive wave of bankruptcies in 2020 that 00:17:19.470 --> 00:17:21.569 cleared out hundreds of the remaining anchor 00:17:21.569 --> 00:17:24.009 stores all at once. Places like Northgate Mall 00:17:24.009 --> 00:17:26.509 in North Carolina, Cascade Mall in Washington, 00:17:26.829 --> 00:17:29.930 Metro Center in Arizona. They didn't just struggle. 00:17:29.990 --> 00:17:32.410 They closed the doors for good. The pandemic 00:17:32.410 --> 00:17:37.269 was the final fatal blow. So that brings us to 00:17:37.269 --> 00:17:40.130 today. We're left with the corkses, these massive 00:17:40.130 --> 00:17:43.690 gray concrete boxes sitting on hundreds of acres 00:17:43.690 --> 00:17:46.509 of cracked asphalt. And this brings us to what 00:17:46.509 --> 00:17:48.250 I think is the most fascinating part of this 00:17:48.250 --> 00:17:51.029 whole story, the afterlife. Because unlike a 00:17:51.029 --> 00:17:53.930 house, you can't just flip a mall. No. This is 00:17:53.930 --> 00:17:55.829 the challenge of the gray field. That's the technical 00:17:55.829 --> 00:17:57.849 term. Right. Define that for us again. So a green 00:17:57.849 --> 00:18:00.230 field is undeveloped, open land, a meadow, a 00:18:00.230 --> 00:18:02.890 forest. It's easy to build on. A gray field, 00:18:02.970 --> 00:18:04.569 on the other hand, is land that has already been 00:18:04.569 --> 00:18:07.369 developed and paved over a former mall, an old 00:18:07.369 --> 00:18:10.490 airport, a giant factory. Reusing it is incredibly 00:18:10.490 --> 00:18:12.970 difficult, primarily because of the architecture 00:18:12.970 --> 00:18:15.339 of the existing structure. I've heard so many 00:18:15.339 --> 00:18:17.299 people ask, why don't we just turn them into 00:18:17.299 --> 00:18:20.380 homeless shelters or affordable housing? It seems 00:18:20.380 --> 00:18:22.700 so obvious. You have a roof, you have plumbing, 00:18:22.880 --> 00:18:25.640 you have heat. Why is it so hard to do that? 00:18:25.900 --> 00:18:28.480 It really comes down to a simple problem of geometry. 00:18:29.900 --> 00:18:32.319 Malls, and especially the department stores within 00:18:32.319 --> 00:18:35.039 them, have what architects call deep floor plates. 00:18:35.299 --> 00:18:38.119 Deep floor plates. Explain what that means. Think 00:18:38.119 --> 00:18:41.460 about an old Sears or a Macy's building. It's 00:18:41.460 --> 00:18:45.019 a giant solid square, maybe 300 feet by 300 feet. 00:18:45.460 --> 00:18:47.920 Now imagine trying to chop that up into individual 00:18:47.920 --> 00:18:50.630 apartments. The units you put along the outside 00:18:50.630 --> 00:18:52.970 walls would have windows. But what about all 00:18:52.970 --> 00:18:54.490 the apartments in the middle? They'd have no 00:18:54.490 --> 00:18:57.210 windows, no natural light. Exactly. You'd have 00:18:57.210 --> 00:18:59.009 dozens of units in the center of the building 00:18:59.009 --> 00:19:01.950 that are just windowless boxes. You can't legally 00:19:01.950 --> 00:19:04.930 or humanely house people like that. It violates 00:19:04.930 --> 00:19:06.789 all sorts of building and health codes. So to 00:19:06.789 --> 00:19:08.410 make it work for housing, you'd have to completely 00:19:08.410 --> 00:19:10.859 gut the building. Carve it up. You'd have to 00:19:10.859 --> 00:19:13.440 do massive architectural surgery. You'd have 00:19:13.440 --> 00:19:16.140 to slice the roof off, carve out huge central 00:19:16.140 --> 00:19:18.779 courtyards to bring light into the middle, punch 00:19:18.779 --> 00:19:21.359 dozens of new holes in the structure for light 00:19:21.359 --> 00:19:25.839 wells. It is astronomically expensive. In many 00:19:25.839 --> 00:19:28.680 cases, it is literally cheaper to tear the entire 00:19:28.680 --> 00:19:31.259 mall down to the ground and build new apartments 00:19:31.259 --> 00:19:33.839 from scratch than it is to try and retrofit the 00:19:33.839 --> 00:19:36.619 existing concrete shell. That makes perfect sense 00:19:36.619 --> 00:19:38.559 when you explain it like that. But there are 00:19:38.559 --> 00:19:40.839 exceptions. There are other uses. Let's look 00:19:40.839 --> 00:19:43.940 at scenario A, the corporate takeover. The sources 00:19:43.940 --> 00:19:46.440 brought up the Rackspace example, which is pretty 00:19:46.440 --> 00:19:48.839 famous. Yes, the old Windsor Park Mall in San 00:19:48.839 --> 00:19:51.019 Antonio. This is one of the most successful and 00:19:51.019 --> 00:19:53.369 well -known mall conversions. Rackspace, which 00:19:53.369 --> 00:19:55.650 is a big cloud computing company, took over the 00:19:55.650 --> 00:19:57.849 entire dead mall and turned it into their global 00:19:57.849 --> 00:19:59.970 headquarters. That seems like a pretty perfect 00:19:59.970 --> 00:20:02.470 fit for a certain kind of tech company. The big 00:20:02.470 --> 00:20:05.109 open spaces, the slightly weird 80s architecture. 00:20:05.349 --> 00:20:07.589 It's kind of cool and quirky. It works for a 00:20:07.589 --> 00:20:10.390 modern office because you don't need a window 00:20:10.390 --> 00:20:12.970 in every single cubicle. You can have meeting 00:20:12.970 --> 00:20:16.029 rooms, conference spaces, and server closets 00:20:16.029 --> 00:20:18.650 in the windowless core of the building. And the 00:20:18.650 --> 00:20:21.599 old food court. That becomes the new company 00:20:21.599 --> 00:20:23.720 cafeteria. This is a self -contained corporate 00:20:23.720 --> 00:20:26.369 campus with a ton of personality. And there's 00:20:26.369 --> 00:20:28.829 another more technical reason why tech companies 00:20:28.829 --> 00:20:31.710 actually love old malls, specifically for things 00:20:31.710 --> 00:20:34.150 like data centers. The floor load capacity. The 00:20:34.150 --> 00:20:36.390 floor load. Malls, especially the department 00:20:36.390 --> 00:20:39.170 stores, were built to withstand incredible weight. 00:20:39.269 --> 00:20:41.289 You have to account for thousands of shoppers, 00:20:41.369 --> 00:20:43.750 heavy shelving, tons of merchandise, sometimes 00:20:43.750 --> 00:20:46.789 even car shows on the second floor. That concrete 00:20:46.789 --> 00:20:49.609 structure is incredibly robust. So if you want 00:20:49.609 --> 00:20:51.589 to fill a building with rows and rows of heavy 00:20:51.589 --> 00:20:54.470 servers or massive heavy battery backups for 00:20:54.470 --> 00:20:57.400 a data center, A mall is perfect. It's already 00:20:57.400 --> 00:20:59.839 over -engineered. So the Allegheny Center Mall 00:20:59.839 --> 00:21:02.539 in Pittsburgh becoming a major carrier hotel, 00:21:02.740 --> 00:21:04.740 which is basically a giant hub for the Internet, 00:21:04.960 --> 00:21:07.799 that isn't an accident. No, it's a matter of 00:21:07.799 --> 00:21:10.480 structural destiny. It has the heavy -duty power 00:21:10.480 --> 00:21:13.299 hookups from its time as a retail center. It 00:21:13.299 --> 00:21:15.019 has loading docks for bringing in equipment, 00:21:15.140 --> 00:21:17.819 and it has the floor strength. That building 00:21:17.819 --> 00:21:20.319 is now the physical backbone of the Internet 00:21:20.319 --> 00:21:22.950 for that entire region of the country. It's just 00:21:22.950 --> 00:21:25.250 so ironic. The Internet is what helped kill the 00:21:25.250 --> 00:21:27.690 retail mall. And now the physical infrastructure 00:21:27.690 --> 00:21:30.690 of the Internet is literally living inside the 00:21:30.690 --> 00:21:32.890 corpse of the mall. It is the ultimate conquest, 00:21:33.069 --> 00:21:35.430 isn't it? And you see the same exact thing with 00:21:35.430 --> 00:21:38.609 Amazon taking over old Sears and JCPenney locations 00:21:38.609 --> 00:21:41.190 to use them as fulfillment and distribution centers. 00:21:41.529 --> 00:21:43.890 They are using the carcass of the old retail 00:21:43.890 --> 00:21:46.470 giant to power the operations of the new one. 00:21:46.589 --> 00:21:48.829 But not every mall can become a server farm. 00:21:49.289 --> 00:21:52.490 Scenario B in our notes is community and public 00:21:52.490 --> 00:21:54.630 service. We're talking schools and churches. 00:21:54.910 --> 00:21:57.269 This is happening everywhere, especially in smaller 00:21:57.269 --> 00:22:00.670 towns. The Eastgate Metroplex in Palsa was largely 00:22:00.670 --> 00:22:03.589 converted to educational use. The old Lexington 00:22:03.589 --> 00:22:06.730 Mall in Kentucky became a huge satellite worship 00:22:06.730 --> 00:22:09.230 center for a local megachurch. Why does that 00:22:09.230 --> 00:22:11.710 particular use work so well? Again, just think 00:22:11.710 --> 00:22:14.009 about the space. What does a megachurch need? 00:22:14.440 --> 00:22:17.599 They need a massive windowless auditorium for 00:22:17.599 --> 00:22:19.599 their main services. That's a former department 00:22:19.599 --> 00:22:22.839 store. They need lots and lots of smaller rooms 00:22:22.839 --> 00:22:25.359 for classrooms and childcare. Those are the old 00:22:25.359 --> 00:22:28.240 in -line stores. And most importantly, they need 00:22:28.240 --> 00:22:30.960 thousands and thousands of parking spots for 00:22:30.960 --> 00:22:33.279 everyone to show up at 11 a .m. on a Sunday morning. 00:22:33.440 --> 00:22:35.779 The parking really is the secret weapon, isn't 00:22:35.779 --> 00:22:38.500 it? In North American urban planning, parking 00:22:38.500 --> 00:22:41.240 is destiny. If you were to build a new church 00:22:41.240 --> 00:22:43.799 or school of that size from scratch, the cost 00:22:43.799 --> 00:22:45.519 of the land and building an underground garage 00:22:45.519 --> 00:22:48.099 can be tens of millions of dollars. It can cost 00:22:48.099 --> 00:22:51.619 $40 ,000 to $60 ,000 per parking space to dig 00:22:51.619 --> 00:22:55.019 a garage. A mall comes with thousands of surface 00:22:55.019 --> 00:22:58.200 parking spaces for free. That is a massive, massive 00:22:58.200 --> 00:23:01.599 asset. Which also explains Scenario C Mall to 00:23:01.599 --> 00:23:04.200 Medicine. This is a huge new trend. The Vanderbilt 00:23:04.200 --> 00:23:06.000 Health example in Nashville really stuck out 00:23:06.000 --> 00:23:08.200 to me. They took over half of the 100 Oaks Mall. 00:23:08.420 --> 00:23:11.079 Half the mall. And in doing so, they completely 00:23:11.079 --> 00:23:14.059 saved the other half. They put in all their outpatient 00:23:14.059 --> 00:23:17.140 clinics. ambulatory surgery centers, and administrative 00:23:17.140 --> 00:23:20.140 offices into the second floor and the old anchor 00:23:20.140 --> 00:23:23.039 store spaces. And suddenly you have thousands 00:23:23.039 --> 00:23:25.740 of doctors, nurses, staff, and patients circulating 00:23:25.740 --> 00:23:28.059 through that building every single day. And all 00:23:28.059 --> 00:23:30.460 of those people need to eat lunch, buy a coffee, 00:23:30.579 --> 00:23:32.880 maybe pick up a gift from the gift shop. Exactly. 00:23:33.099 --> 00:23:35.839 It completely revitalized the remaining retail 00:23:35.839 --> 00:23:38.660 on the first floor. But the reason Vanderbilt 00:23:38.660 --> 00:23:41.140 and other health systems do it is all about speed 00:23:41.140 --> 00:23:44.079 and cost. To build a brand new medical tower 00:23:44.079 --> 00:23:46.779 can take years of planning and construction and 00:23:46.779 --> 00:23:49.599 costs a fortune. Retrofitting a mall is much 00:23:49.599 --> 00:23:51.819 faster, the parking is already there, and the 00:23:51.819 --> 00:23:53.640 floors, again, are already strong enough for 00:23:53.640 --> 00:23:56.019 heavy equipment like MRI machines and CT scanners. 00:23:56.259 --> 00:23:58.740 It's a health mall, one -stop shopping for your 00:23:58.740 --> 00:24:01.160 body. You go get your blood drawn, see a specialist, 00:24:01.420 --> 00:24:03.019 and then go buy a new pair of shoes downstairs. 00:24:03.539 --> 00:24:06.259 It's becoming a major trend. The University of 00:24:06.259 --> 00:24:08.319 Rochester Medical Center is doing the same thing, 00:24:08.519 --> 00:24:11.700 converting a third of the marketplace mall. It 00:24:11.700 --> 00:24:13.759 fundamentally turns the mall from a place of 00:24:13.759 --> 00:24:16.359 recreational spending into a place of essential 00:24:16.359 --> 00:24:19.859 services. And finally, when all else fails, there's 00:24:19.859 --> 00:24:22.259 the demalling option, which is basically just 00:24:22.259 --> 00:24:24.460 tearing the roof off. The scrape and rebuild, 00:24:24.720 --> 00:24:27.299 or at least a partial scrape. You see this at 00:24:27.299 --> 00:24:29.279 places like the Springfield Town Center in Virginia. 00:24:29.500 --> 00:24:31.859 They try to turn the enclosed fortress into something 00:24:31.859 --> 00:24:33.819 that feels more like a traditional street grid. 00:24:33.940 --> 00:24:36.119 They'll demolish the old apartment stores entirely 00:24:36.119 --> 00:24:38.740 to put in parks or apartment buildings. Like 00:24:38.740 --> 00:24:41.019 that example of DiBartolo Commons at the Southern 00:24:41.019 --> 00:24:43.960 Park Mall in Ohio. They tore down a Sears and 00:24:43.960 --> 00:24:46.500 just built a big grassy lawn. Which is incredible. 00:24:46.730 --> 00:24:49.569 symbolic isn't it the fiscal space that for 50 00:24:49.569 --> 00:24:52.109 years was dedicated to selling you washing machines 00:24:52.109 --> 00:24:55.789 and craftsman tools is now just grass it's a 00:24:55.789 --> 00:24:58.509 public space to just sit it's a total reversal 00:24:58.509 --> 00:25:01.490 of purpose this all brings us to the final part 00:25:01.490 --> 00:25:05.210 of our deep dive today the cultural legacy because 00:25:05.210 --> 00:25:07.569 even after these places die and even after they're 00:25:07.569 --> 00:25:10.569 torn down we can't seem to look away we are obsessed 00:25:10.569 --> 00:25:13.549 with images of these places in decay The dead 00:25:13.549 --> 00:25:16.529 mall aesthetic. It's a huge subculture online. 00:25:16.789 --> 00:25:19.390 There are entire communities dedicated to it. 00:25:19.470 --> 00:25:21.750 I have to admit, I've watched hours of the Dan 00:25:21.750 --> 00:25:23.869 Bell videos on YouTube. You know, the dead mall 00:25:23.869 --> 00:25:27.130 series. Him walking through a dark, abandoned 00:25:27.130 --> 00:25:30.349 mall with that eerie vaporwave music playing. 00:25:30.710 --> 00:25:33.990 It's just mesmerizing. It taps into a concept 00:25:33.990 --> 00:25:37.210 that philosophers and cultural critics call hauntology. 00:25:37.869 --> 00:25:39.809 Hauntology. That sounds like a ghost story class 00:25:39.809 --> 00:25:42.190 in college. It's a philosophical concept, yeah. 00:25:42.470 --> 00:25:45.109 It was popularized by the late critic Mark Fisher. 00:25:45.569 --> 00:25:48.950 And the basic idea is that our present is haunted 00:25:48.950 --> 00:25:51.910 by the lost futures of the past. When you look 00:25:51.910 --> 00:25:53.730 at a dead mall, you aren't just looking at trash 00:25:53.730 --> 00:25:55.990 and debris. You're looking at a failed vision 00:25:55.990 --> 00:25:58.309 of the future. A very specific vision of the 00:25:58.309 --> 00:26:00.329 future. One where we all lived in the suburbs 00:26:00.329 --> 00:26:02.509 and drove our station wagons to the mall and 00:26:02.509 --> 00:26:04.309 consumption was the main form of entertainment 00:26:04.309 --> 00:26:06.849 and everything was going to be perfect forever. 00:26:07.349 --> 00:26:10.549 Exactly. The mall was the physical center of 00:26:10.549 --> 00:26:13.670 the 20th century American dream. So to see it 00:26:13.670 --> 00:26:16.269 rotting, to see it collapsing in on itself, it 00:26:16.269 --> 00:26:18.369 suggests that maybe the dream itself has rotted. 00:26:18.470 --> 00:26:21.150 That's why it feels so liminal. We mentioned 00:26:21.150 --> 00:26:23.549 the term liminal space earlier, that feeling 00:26:23.549 --> 00:26:26.009 of being in a transitional space, a place between 00:26:26.009 --> 00:26:29.569 places. Right, an airport at 3 a .m., an empty 00:26:29.569 --> 00:26:32.809 school hallway during summer vacation. A mall 00:26:32.809 --> 00:26:34.890 is a space that is designed from the ground up 00:26:34.890 --> 00:26:37.230 to be filled with people, with noise, with activity. 00:26:38.009 --> 00:26:40.509 Without people, the architecture feels fundamentally 00:26:40.509 --> 00:26:43.950 wrong. It glitches our brains. It's a space that 00:26:43.950 --> 00:26:46.190 is perpetually waiting for something, for shoppers, 00:26:46.210 --> 00:26:48.369 for life, that is never going to happen again. 00:26:48.799 --> 00:26:51.339 The documentary Jasper Mall from 2020 captured 00:26:51.339 --> 00:26:53.579 this feeling perfectly. It's not a horror movie. 00:26:53.640 --> 00:26:56.180 It's just profoundly sad. It's about the few 00:26:56.180 --> 00:26:57.859 people who are still there, the manager, the 00:26:57.859 --> 00:27:00.339 security guards sweeping the floors, just waiting 00:27:00.339 --> 00:27:02.460 for customers who aren't coming back. It's a 00:27:02.460 --> 00:27:06.000 memento mori, a reminder of death. But instead 00:27:06.000 --> 00:27:08.359 of a skull sitting on a scholar's desk, it's 00:27:08.359 --> 00:27:10.980 a boarded up sparrow in a food court. Memento 00:27:10.980 --> 00:27:14.390 mori with a food court. I'm still claiming that 00:27:14.390 --> 00:27:17.250 for a t -shirt. But this whole thing raises a 00:27:17.250 --> 00:27:19.029 really big question for me as we start to wrap 00:27:19.029 --> 00:27:23.009 this up. If the mall is dying, where do we go 00:27:23.009 --> 00:27:25.970 now? What replaced it? That is the town square 00:27:25.970 --> 00:27:28.349 problem, and it's a huge one. We always referred 00:27:28.349 --> 00:27:30.910 to the mall as the new American town square. 00:27:31.069 --> 00:27:33.390 But it wasn't really a town square, was it? No. 00:27:33.490 --> 00:27:35.710 And this is a really crucial distinction that 00:27:35.710 --> 00:27:38.289 urbanists make. A real town square is public 00:27:38.289 --> 00:27:40.710 space. You have a right to be there. You can 00:27:40.710 --> 00:27:43.089 protest there. You can sit on a bench all day 00:27:43.089 --> 00:27:46.069 without spending a single dollar. A mall is what's 00:27:46.069 --> 00:27:49.410 known as a POPS, a privately owned public space. 00:27:49.730 --> 00:27:51.529 Meaning you have no real rights there. It just 00:27:51.529 --> 00:27:54.029 looks public. Exactly. If you try to hold up 00:27:54.029 --> 00:27:55.890 a protest sign in a mall, security will kick 00:27:55.890 --> 00:27:57.769 you out. If you're a teenager who doesn't look 00:27:57.769 --> 00:27:59.349 like you're actively shopping, they'll tell you 00:27:59.349 --> 00:28:01.630 to move along. It was a sanitized, controlled, 00:28:01.950 --> 00:28:04.589 privatized version of community. It was community 00:28:04.589 --> 00:28:07.430 as a commodity. So now that that particular privatized 00:28:07.430 --> 00:28:10.099 version is failing, Are we getting a real town 00:28:10.099 --> 00:28:12.900 square back or are we all just retreating back 00:28:12.900 --> 00:28:15.019 into our houses? Well, that's the fear, isn't 00:28:15.019 --> 00:28:17.599 it? The fear is that we are simply trading the 00:28:17.599 --> 00:28:21.599 physical POPS for the digital POPS. We gather 00:28:21.599 --> 00:28:24.740 on Twitter or Instagram or TikTok, which are 00:28:24.740 --> 00:28:27.380 also privately owned spaces that exist to monetize 00:28:27.380 --> 00:28:30.079 our attention and sell our data instead of gathering 00:28:30.079 --> 00:28:32.099 in the food court. We traded the food court for 00:28:32.099 --> 00:28:34.380 the comment section. And I am not at all convinced 00:28:34.380 --> 00:28:36.619 that's an upgrade for society, at least at the 00:28:36.619 --> 00:28:39.049 mall. You had to physically be in the presence 00:28:39.049 --> 00:28:41.029 of your neighbors. You saw people who weren't 00:28:41.029 --> 00:28:43.750 like you. There was a chance for serendipitous 00:28:43.750 --> 00:28:46.309 interaction. So as we look at this new landscape, 00:28:46.569 --> 00:28:48.730 the Amazon warehouses where the Sears used to 00:28:48.730 --> 00:28:50.490 be, the medical centers and the old department 00:28:50.490 --> 00:28:52.650 stores, the empty shells waiting for the wrecking 00:28:52.650 --> 00:28:55.490 ball, it's pretty clear that the era of the retail 00:28:55.490 --> 00:28:58.829 cathedral is well and truly over. It is. We are 00:28:58.829 --> 00:29:00.970 in the middle of a massive shift from an era 00:29:00.970 --> 00:29:04.829 of going out to an era of delivery. The entire 00:29:04.829 --> 00:29:07.170 physical infrastructure of our country is being 00:29:07.170 --> 00:29:11.089 rewired in real time to support that new reality. 00:29:11.390 --> 00:29:14.109 It's a lot to think about the next time you drive 00:29:14.109 --> 00:29:17.170 past that empty Sears on the highway. It's not 00:29:17.170 --> 00:29:20.529 just an emptied store. It's a monument to a way 00:29:20.529 --> 00:29:24.309 of life that has quite literally left the building. 00:29:24.509 --> 00:29:26.650 And it's not coming back. Thanks for taking this 00:29:26.650 --> 00:29:29.769 deep dive with us. It's been weirdly heavy, but 00:29:29.769 --> 00:29:31.890 absolutely fascinating. My pleasure. It was great 00:29:31.890 --> 00:29:33.549 to talk about. Stay curious, everyone.