“The strategy we adopted in the height of the pandemic is playing out better than we could have expected,” he told investors last week. “We kept our properties functioning. We bet on the rebound. And we’re seeing the benefits of that.”
It’s an amazing rebound from the dire conditions just more than a year ago.
Experts in the field are also impressed with how well malls have rebounded.
“Unfortunately where we are at now is marked by favorable circumstances that won’t last,” Saunders cautioned.
The recovery has been somewhat uneven said Ana Lai, credit analyst with Standard & Poor’s who covers the mall operators. Although Simon runs higher end malls, other operators are not nearly as well positioned in terms of tenants or locations.
“There’s a lot of malls out there and a wide range of quality. If you look at all the weaker quality malls, I’m not sure we’re seeing the recovery,” Lai said.
And then there are the long-term trends that have been working against malls for years, and those challenges increased during the pandemic.
“The retailers who made gains during the pandemic are not giving them back,” said Saunders.
Then there’s the threat posed by the recent surge in Covid cases due to the rise of the Delta variant. There are some early signs that mall foot traffic has fallen in the month since the mall operators and retailers closed their books on the second quarter.
Real time foot traffic data from research firm InMarket, which uses cell phone tracking information to come up with data on visits to different locations, did analysis of mall traffic for CNN Business. It found that overall foot traffic at malls was 4% higher the week of July 4 to July 10 than it was the same week of 2019. But by the last week of July traffic had fallen to 75% of where it stood during the same week two years earlier. And while malls in 80% of markets had rebounded above the traffic levels of two years ago at the start of July, only 7% were still above that earlier traffic level by the end of the month.