When a commercial real estate loan 'goes to a special servicer,' it's safe to say it doesn't mean the borrower has made the bank's VIP list. Special servicing is a step for troubled loans on the road to foreclosure, and that's where Gwinnett Place Mall finds itself these days. If this is your favorite mall, don't be alarmed - you probably won't see any changes at the ground level in the near term. Of course, this probably isn't your favorite mall, which is why we are having this conversation. Owned by mall-owner behemoth Simon Malls, Gwinnett Place used to be first-class suburban shopping mall. Today its occupancy rates are less than 57% and rental rates are slipping. The plight of Gwinnett Place is symptom of the general malaise affecting retail properties. And though the death of the regional mall has been called by many during the recession, though based on the godawful traffic, no one told other Simon Malls properties like Lenox Square or Perimeter Mall.
What's next is unclear. Mixed-use developments featuring integrated retail shops and "life-style" centers such as those developed by Cousins Properties and the Sembler Group were poised as successor to the mall concept until the recession. The future of bricks-and-mortar retail in general is under pressure from the internet. If you can figure out what's next for retail spaces or what do with the empty husks of these malls and other big boxes when they close (see Shannon Mall), there is a future in real estate for you.