Values of US malls are now 50% off

The fallout in retail continues as a result of the horrible holiday sales for brick and mortar stores.

Roughly a dozen top retail executives have been let go since the new year including Wal-Mart’s Sam Club CEO and the head of Lane Bryant and Catherines.

All this churn as a result of disastrous sales, is having dramatic effecting on the malls of America. The value of commercial mortgage back securities offerings are crashing as large retailers, which anchor many of these properties, are closing.

Some $3.1 billion in CMBS debt is not current on its payments, according to data provided by Trepp, a CMBS analytical firm.

In 2010, homeowners would mail the keys into the bank called jingle mail and walked away from the property. Now some mall landlords are doing the same with their properties as Class C malls, which are the lower level malls with few national retail chains, are the first to get hit.

But look for the higher-end properties to pull back from keeping their properties up, nevermind making improvements.

Perhaps Amazon can use some of these properties for their regional distribution centers?

The churn in the US bond market has been dramatic since President Trump took the oath of office.

The buying of Friday and early Monday shifted to selling Monday afternoon and continued through Wednesday morning.

Look at three-day chart shows a deep V-shape as peak to trough and back to peak with over 30 basis point moves in most offerings.

These bond moves are far more important and need to be watched, since the debt markets are far larger than the stock market.

As yields rise the way they have so quickly, it tells you the selling is deep and across all maturities.



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