The Westfield location, one of the largest in the United States, may close in the coming months.
According to Fox affiliate WTTG, decisions are still being made about the future of the Westfield Mall in Wheaton, Maryland, which is only 10 miles north of downtown Washington, DC.
It was built in 1958 and was known as Wheaton Plaza for many years.
Unibail-Rodamco-Westfield, which owns what is now Westfield Wheaton, recently defaulted on a loan of $235 million.
Experts speculate that the company may be using the defaulted loan as a bargaining chip to reduce its debt burden, or that it intends to sell the mall entirely.
According to John Carroll, head of advisory at Coresight Research, the potential shutdown could create numerous redevelopment opportunities for the local community.
“It is tough on the community, but at the same time, it presents this opportunity for redevelopment,” he told the news station.
“That’s the other major trend emerging here. If this isn’t the mall like it used to be, with shops I don’t want to go into, what can I do with it?”
Carroll did, however, emphasize that the closure was far from definitive.
“It might not go away,” Carroll explained.
“I want to be clear, lots of times these types of companies will threaten to go out so they can renegotiate the terms of their debt.”
The mall is currently 90% full, with major retailers including Costco, Target, and Dick’s Sporting Goods inside.
Despite the amount of business those three giants are likely to generate and the rent they pay the mall owners, it is unlikely to be enough to cover the loan.
If the mall closes, not only will it be at risk, but so will Costco, Target, and Dick’s Sporting Goods.
Westfield told the news outlet that “the debt has matured, and we are engaged in discussions with the lender as we explore all options.”
US braces for ‘45,000 store closures’
Some 45,000 bricks-and-mortar stores could close in the next five years, experts have warned.
Several major retailers have announced store closures or gone out of business altogether in recent years.
In 2023, chains such as Foot Locker announced plans to close up to 400 outlets by 2026.
While, other well-known retailers like Tuesday Morning and Mitchell Gold + Bob Williams filed for bankruptcy in 2023.
Bed Bath & Beyond has closed all of its brick-and-mortar stores and is now an online-only retailer.
The most affected retailers have been clothing, consumer electronics, sporting goods, hobby, book, music, and home furnishing stores since the start of 2019.
UBS has predicted the total number of retail stores will drop by 45k from 958k to 913k.
Despite that, the report says that certain stores should thrive while others decline.
It said retailers such as Walmart, Costco, Home Depot, and Target, could be among the winners.
MALL MADNESS
Malls have been struggling for several years.
Capital One Shopping data shows that approximately 1,170 stores closed nationwide between 2017 and 2022.
Factors such as e-commerce, inflation, and shifting consumer habits contribute to this trend.
Over the last year, several mall-based retailers have gone bankrupt.
Forever 21 filed for Chapter 11 bankruptcy for the second time and plans to close all remaining stores.
Last April, Express closed approximately 100 mall locations.
Following its bankruptcy, sneaker chain Soleply will have only one location remaining in a New Jersey mall.
Even department stores such as Macy’s are shifting to smaller formats and closing some mall-based locations.
