Malls better adapt to modern times to avoid total death, serial entrepreneur says

I've done 34 startups since 1991. I've built a few $50 million companies, multiples over 20 million. I've had 19 exits, everything from drop shipping Brazilian bikinis and swimwear in the early 90s on AOL chat rooms to building 1 restaurant, turning it into six, all the way to the real estate business that I do now. But my the one that's near and dear to my heart was my glow in the dark miniature golf business. Being a retired golf professional, I wanted to kind of stay in the game a little bit. And my business partner, Reg Booth and I created an entire industry around this golf ball investment and had over 200 glow in the dark miniature golf courses in shopping malls around the country. Me and my business partner started Globe Golf miniature golf courses inside shopping malls because we knew that mom wanted to go shopping but she didn't want her kids bugging her and turning her three hour afternoon into a 30 minute shopping session. So we became a babysitter for kids and built a pretty nice business out there. Well one thing I will share with you is we spent $6.6 million to buy out all of our leases during COVID because we knew that the consumers weren't coming back and if they did come back it was going to be a different type of consumer than was their pre COVID. Amazon has had a huge effect on this, right? So, and it's not just Amazon directly, it is the quick ship to where it used to be. We, if you wanted a new blouse, you wanted a new shirt, a pair of shoes, you had to go to the mall, you had to try them on. And if you needed it immediately, now you can get everything instantaneously with quick ship, usually 24 to 48 hours, right? So what's happening is all the malls rents are all based on revenue per square foot. So when they lose their big tenants, as we saw even 15 years ago, Sears is going away, Macy's going away. You can walk into every decent mall today and see an Apple store, but the gaps are gone. The Abercrombie and Finches are going away. These are the ones that are signing 10 year leases based on like $468 per square foot sales through the entire mall. The gross sales per square foot has dropped by almost 35% in some cases. You mentioned rural, we're talking 50 to 60%. That's why those rural areas drop first, right? And that's where they get on the dead mall list. But then they have national tenants. Those national tenants leave, they have to buy out their leases. And it becomes a trickle down all the way through the top malls. You look at Sawgrass Mills in Florida, you look at Palisade Center in West Nyack, NY, Northridge Mall in the northern part of Los Angeles. Those are all traditionally very strong malls, over $500 per square foot. They're dropping below that $450,000 threshold. That's why they're sitting at 20% plus vacancy. It's not coming back, unfortunately, unless these corporations, the CVL, the general growth properties of the world are making huge investments. I'll give you one quick example, the Cool Springs Gallery, I just happened to live South of Nashville, very close to this mall. They were at about 27% occupancy. They actually became very proactive. They're owned by CVL. They are now making a three to $400 million investment into the shopping mall to bring more restaurants, outdoor and entertainment to the mall because it's not just shopping anymore. If they don't mix in and kind of turn it into an entertainment mud, if you will, then they're going to get left behind because the consumers just aren't going to that type of brick and mortar anymore. So we actually shut everything down during COVID. We had a great run and my partner and I decide we're going to buy out our leases. We negotiated those down and we shut every shopping mall down. There's probably literally about 10 to 15 out of 178 that we were operating at that time that we would even explore going back into. But during COVID, both him and I, he retired officially. He's older than I am and I moved on to other things. We just haven't had a desire to go back. I honestly, I hate to say never to anything, but I would probably never go back into the retail space because I don't see what's happened during COVID and now post COVID, I don't see consumer behavior changing. I think we will end up honestly with probably about 20 to 25 mega shopping malls like what we see in the Meadowlands outside of New York, and that's happening in Ontario outside of Los Angeles right now. And you're going to see them centralized, kind of like what Mall of America did back in the late 80s and the early 90s. There were people back in the day that would fly in to Mall of America just to go shopping for like Christmas and their Christmas sales would spike like almost quadruple the national trend that would happen in the retail sector. That doesn't happen today anymore. Everything that I can buy at Mall of America, I can get right from this thing in about two seconds. Whether it's Walmart, Amazon, or any other GPO, you know, everybody's got it now. Kohl's has it, Home Depot has it, Lowe's has it, Target has it. We can buy everything online.