There's a reasonable argument for buying beaten down malls on the cheap. Most malls were built years ago at the best and most accessible locations in their communities. Nowadays you just don't find big acreage for sale at the junctions of two or more major roads. No doubt that's what attracted Buffett to Seritage and its many moribund, but strategically located, Sears stores.
A huge problem was the over-storing of America. For 20 years or more we've had too many malls and too many stores by almost any measure. Understand that half-empty malls are expensive to maintain. Are those fat dividends sustainable? Seritage had to cut their payout.
Also, most enclosed malls were cheaply built and they're starting to show it. They've also been prime targets for criminals lately.
I've been hearing arguments for buying cheap mall stocks, and cheap retailers such as Sears and JCP, for the past decade or more. Those arguments have always been too optimistic. Those are falling knife stocks. Not for me!
More than one brainy huge fund guru (such as Eddie Lampert) has lost his fortune by thinking there was a simple answer to those problems.
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