This Abandoned Macy's Is Now A Homeless Shelter Housing Its Former Employees

The Macy’s at the Landmark Mall in Alexandria, Virginia used to be an iconic and historic building. In what is now undoubtedly a sign of the times, it has been converted into a homeless shelter until the property can be razed and its owner, the Howard Hughes Corporation, can repurpose the property and build something new at its location.

The Landmark Mall in Alexandria, VA, used to be the talk of the town - in the 1960's. Times have changed; Photo sources: NY Times

Even more telling, this homeless shelter houses many of those who used to work at the very same Macy’s.

In the realm of brick-and-mortar retail, the times are definitely a changin’. We have often, on this site, detailed not only the slow and painful death of brick-and-mortar retail as it has been occurring, but also how the value of once coveted mall property has disintegrated and similarly, how landlords of these properties now find themselves stuck between a rock and a hard place – tenants are dropping like flies, sales numbers used to help calculate rent are on the decline and property appraisals have been underwhelming. This has led to a influx of abandoned property, not unlike the Macy's in Alexandria, just sitting and waiting to be repurposed.

(Photo sources: NY Times)

The Macy's in the Landmark Mall was the topic of a recent New York Times article, detailing how a once historic landmark that it is now abandoned and has become a homeless shelter, 15 months after it had its last customers. The Macy's "now provides 60 beds, hot meals and showers for families and for single men and women who are having trouble finding a place to live in a city with a scarcity of affordable housing."

Here is The New York Times on the property's once iconic status as a historic landmark:

The Landmark Mall was once at the vanguard of shopping. Opened in 1965, the mall housed the region’s most fashionable department stores, Hecht’s, Woodward & Lothrop and Sears & Roebuck. Boys came to buy their first suit at the haberdasher, and teenage girls could get their shoes dyed to match the color of their prom dress.

Alexandria’s former mayor William D. Euille remembered playing the clarinet in the high school band at the mall’s opening ceremony. “It was the economic engine of the city,” he said.

Landmark tried to adapt over the years. It began as an open-air shopping center and went through an overhaul in the 1980s to enclose the property.

Like many other malls, however, it has gone the way of the buffalo:

Eventually, the mall succumbed to retail’s propensity to chase after newer, flashier spaces. Developers built larger malls with more upscale brands nearby in Pentagon City and Tysons Corner, siphoning customers away from Landmark.

Landmark’s original anchor stores either have been bought out, went bankrupt or are clinging to life — like many in the retail business. Last year, 6,985 stores closed in the United States, a record number, according to Coresight Research, a retail analysis and advisory firm. This year, retailers are on a pace to close roughly 10,000 stores.

In its final years of operation, the Landmark’s tenants included two dollar stores and a tax preparer. Only the Sears is still operating. A lone, blue inflatable figure dances on the store’s roof, beckoning shoppers.

Plans to revamp the property, including a 2009 effort to help it once again become an open-air shopping destination, have failed - namely due to the property's former owner, General Growth Properties, went bankrupt after the 2008 financial crisis. Subsequent to that, the mall was sold and those plans were scrapped.  

Landmark’s current owner, the Howard Hughes Corporation, plans to tear down the mall and build a mixed-used space that could include offices, retail and other attractions that are still being finalized. It could take many more years to complete the planning, permitting and construction process for such a huge project.

“It’s a great piece of real estate,” said Mark Bulmash, a senior vice president of development at Howard Hughes.

The article then tells several stories of individuals who are moving into this property as it has now become a temporary homeless shelter for a builder who is seeking shelter while it constructs a permanent location on the other side of Alexandria:

Karleen Smith used to work at the Macy’s in Landmark Mall, putting price tags on summer dresses, housewares and the latest styles of shoes.

On Saturday, Ms. Smith, 57, returned to her former store, not as an employer or a customer, but as a resident.

The former Macy’s in this vacant shopping mall outside Washington has been transformed into a homeless shelter.

“It’s weird to be moving into this building. I used to work here,” she said inside the shelter’s common room, which was once the men’s department. “It’s called survival.”

Smith's memories of the building, prior to its current state, were fondly noted in the NY Times article - again just making even clearer how the property is long past its heydey and has made a full 180 degree turn for the worse:

Ms. Smith, the former Macy’s worker, rested on the floor of the common room under a frayed green blanket. Before coming to the shelter, Ms. Smith had been living in a car and showering in a recreation center. “I was tired,” she said.

Ms. Smith, who worked at Macy’s as a seasonal hire during the holidays 10 years ago, remembers the store fondly.

On a slow day, she would try on makeup at the cosmetics counter and spray herself with samples of perfume. She said she could never afford to buy anything of her own. “All I could do was admire it.”

As Ms. Smith waited to move into her new room, the electricity cut out to a portion of the shelter and the staff set up battery powered camping lanterns to light the way for movers. Volunteers brought crockpots with taco makings for dinner and put together goody bags for the children staying there.

For many of the current residents of the shelter, what has happened is nothing short of shocking.

Keith Ham, 43, who has been living the shelter for about three months, said his family did not believe where he was moving.

“They say, ‘Macy’s at the mall?’ And I say, ‘For real, Macy’s at the mall.’”

We detailed the glut in retail space in an early May article that we published, noting that the American shopping mall - that centerpiece of the 1980's big-box retail model - has fallen on hard times in recent years as the growing dominance of e-commerce has finally started to take a toll on brick-and-mortar retailers - a subject that we've frequently discussed.

Shifting consumption patterns (i.e. the dawn of e-commerce), years of underinvestment by mall owners, and a seemingly unceasing stream of retailer bankruptcies are the factors that have been responsible for most of the damage to Mall REITS, particularly products tied to lower quality malls.

Emptying storefronts and malls have only exacerbated a glut of American retail space. The country now has roughly 24 square feet of retail space per capita, more than twice that of Australia and 5 times that of the UK.

In April, we talked about the breakneck speed with which retail shopping space was closing. Retail real estate carnage is continuing this year with no signs of slowing up, as Bloomberg reported back in April that over 77 million square feet of retail real estate has closed this year and that 2018 will easily pass 2017's record of 105 million square feet closed. The latest example was the fall of the once massive Toys 'R' Us name:

The fall of the Toys “R” Us chain, with more than 700 U.S. stores, shows how much retail real estate has changed in just the last decade. When KKR & Co.Bain Capital, and Vornado Realty Trust took over the company in 2005, the buyers justified the $7.5 billion price, in part, because of the supposedly valuable properties that came with the deal.

We also noted that the price of such properties was tanking. If there was ever to be any silver lining to the complete carnage in the retail real estate space, it was the argument that has been perpetuated over the last decade or so: despite retail stores closing, the real estate would eventually be worth something. 

This argument was made by real estate investment trusts as well as activist investors and analysts who tried to put a positive spin on the death of brick and mortar retail. Now, with more space freeing up, the bid under former retail property is at ask of falling off as supply is starting to get far ahead of demand:

Real estate can put a floor under the value of a retailer and make it easier for the company to borrow. Maybe a particular store concept doesn’t work out as consumers’ tastes change, but in that case, investors can always sell the land and buildings to someone with a better plan. Long-term leases can be similarly valuable. But what if the problem isn’t that a particular store is out of fashion, but that consumers are just shopping less at brick-and-mortar retailers in general? As more storefronts empty, the valuation floor will look wobblier.

The story of Alexandria should come as no surprise to anybody who has been following brick-and-mortar retail, watching it get torched by online competitors, mostly Amazon.com. Unfortunately as times goes on, the reality only gets more desperate for brick-and-mortar retail, and its (former) employees, at a time when many considered that the decimation of brick and mortar may finally be ending.

It appears that it's only just beginning.

Comments

PT wadalt Fri, 06/15/2018 - 22:27 Permalink

"If there was ever to be any silver lining to the complete carnage in the retail real estate space, it was the argument that has been perpetuated over the last decade or so: despite retail stores closing, the real estate would eventually be worth something.  " - and there it is, right there!

How can I explain it to the blind?  Ummm ...

If no-one else has any money, from where are you going to find your customers?

One real estate salesman was on the right track and half way there when he said, "Ants don't pay rent", but really in this case I'm probably taking him out of context.

"... the real estate would eventually be worth something ..." - to whom?  Obviously not to the retailers.  Wholesalers perhaps?  Manufacturers? Govt?  Miners?  Farmers?

Let me guess, first day at business school:

"You can safely assume a near infinite supply of customers who have enough money to buy your stuff if your stuff is good enough and at the right price.  We shall never mention nor question this assumption ever again."

"Real Estate prices always go up because banks can always lend moar munny and we will never mention nor question this assumption ever again too."

amIrite?

Homeless shelters!  Don't miss out on this once-in-a-lifetime opportunity to get in on the ground floor of this exciting new growth industry!  Look!  See!  The Real Estate is still worth something!  Wanna buy some sub-prime AAA mortgage backed homeless shelter securities? ...

In reply to by wadalt

Escrava Isaura PT Fri, 06/15/2018 - 23:13 Permalink

PT: One real estate salesman….to whom?  Obviously not to the retailers.  Wholesalers perhaps?  Manufacturers? Govt?  Miners?  Farmers?

Why, as a blogger, you bother to listen to anyone out there is beyond me. Most people out there lives based on other people. Their thought, believes, and ideas are hand down to them.

Western culture and economics are in decay and its population are totally unprepared for its collapse.

Look at the Zero Hedge six articles below labeled Cult of Campus Progressivism. But why?

Well, there are several reasons such as the left and right propaganda to push their agendas and nurture vs. nature; but let’s place these aside.

Again to why?

The center ‘state capitalism’ which underpinned the ‘American Dream’ (American middleclass) no longer holds, meaning the radicals on the left and the radicals on the right are taking over.

However, the radicals on the right ‘race’ are much more damaging to society than the radicals on the left ‘social’.

 

In reply to by PT

Singelguy Escrava Isaura Sat, 06/16/2018 - 08:30 Permalink

Really? Take a look at what is happening in California, Illinois, Connecticut, and New Jersey and then tell me again that the right is more damaging to society. Better yet, take a look at Venezuela. That is the direction those 4 states are headed. I suggest you take that fairy tale you have been reading back to where you bought it and ask for your money back. 

In reply to by Escrava Isaura

silverer Escrava Isaura Fri, 06/15/2018 - 21:38 Permalink

'Toys was Us'. Just part of the decadent rot that was once a vibrant western culture. The toys became more important than the thought behind them. And the toys themselves were somebody else's creation. No thinking necessary. Kids learned more from basic hardwood blocks, because they had to think of what to do with them. TV and toys eliminated thinking. No wonder IQ's have dropped. And the spiral continues...

In reply to by Escrava Isaura

WOAR BarkingCat Sat, 06/16/2018 - 07:17 Permalink

IQ's have dropped. When professors move the goal posts, and grade on a curve, of COURSE IQ's will drop. It's a shame when an IQ of 100 today (the average) is quantitatively inferior than an IQ of 100 fifty years ago.

The average American today is simply dumber than his ancestors. There are many reasons for this, and most of them can't be said in polite company...because the company is angry apes.

In reply to by BarkingCat

GoldmanSax WOAR Sat, 06/16/2018 - 07:55 Permalink

The study did not take into account the shifting racial demographics. The test takers are not genetically the same as the previous higher scoring ones. MENA is the reason. People are smarter now if they developed their critical thinking and weed out propaganda. (Like lower IQ lies).

In reply to by WOAR

shovelhead BarkingCat Sat, 06/16/2018 - 11:29 Permalink

But nobody remembers or complains about the explosion of mall building and retail space in the first instance?

Why be a carpenter when you can become a developer? They come, they go. Simple as that.

Cheap money assures it. Ya just can't get too much misallocation of capital without it. Look at all the luxury 'Garden Apartments' in the '70-80's in S. Cal that are now ghettos of section 8 denizens.

In reply to by BarkingCat

Offthebeach Escrava Isaura Sat, 06/16/2018 - 10:26 Permalink

How's about these are not too bright, un-skillible, poor social skills, fairly lazy grifters?  Meanwhile all over Virginia, landscape/construction/office abd home cleaning companies are offering $15(+)/hr for unskilled dolts that will show up. 

So, frankly, these people are just desperately needed bodies to justify the parasitic Welfare (non)Industrial Complex ...THEIR grifting.

 

 

In reply to by Escrava Isaura

WhackoWarner MusicIsYou Fri, 06/15/2018 - 23:33 Permalink

There may be many leaping in joy about the destruction of local retail.

Connect the dots. Unemployment.  and the dots go far deeper down the rabbit hole.

 

People who are angry need to start to walk.  Walk away from Amazon and the rest.  Make a run on the "too big to fail" bank that no longer honours your deposits.

 

Brick and mortar fail is all part of a bigger plan. Take your $ out of every too important gambling bank....cancel all online accounts with these monopoly spying services.  Facebook, Google, Linkd, Twitter, Amazon, Netflix and every single one.

Take your meagre $ to some local credit union or hide it under your mattress. 

Next financial fall and you, if you are lucky, will live in this mall. 

Guns will not prevail. Funny to read that Bain Capital was in on the death of this.

Only way is,  masses of people withdraw all participation in this thieves casino.

Need to get your $ out of all "too big to fail".  out of all brokerages. We need to walk from every connection to these thieves.

ONLY thing that is effective is the wallet.  Take all your $ and support for every service away.  Just walk.

In reply to by MusicIsYou

zob2020 rejected Sat, 06/16/2018 - 06:58 Permalink

meanwhile the consumer power actually is plain gone.
i wonder if the only way they can get gdp to be higher than the 80s is to count in every damn 0,00001 dollar profit the machines of the stckmarket as both sales and buys resulting in a dozen trillions in gdp.. and just a few billions in income transfer from consumer traders to bankers.

In reply to by rejected

rejected Fri, 06/15/2018 - 21:11 Permalink

Should have went to the end of the article first... kept reading waiting for Amazon.Con to show.

And there it was! 

" watching it get torched by online competitors, mostly Amazon.com."

Doing good on your Amazon stock Tyler? 

khnum rejected Fri, 06/15/2018 - 21:21 Permalink

Amazon has 44 per cent of e-commerce(which seeing as it hasn't seen any anti-trust law suits probably means its a GSE) but it only has 4 per cent of the overall retail market,so Id say there is a more simpler explanation such as people either cant afford stuff or they now have other expenses instead such as handheld technology perhaps.

In reply to by rejected

Raging Debate khnum Sat, 06/16/2018 - 10:12 Permalink

High housing costs and 10% less wages compared to other decades. Boomers retiring and are downsizing. The oldies go to Publix every other day to get a tasty meal and get out. The bulk of rest of the dough goes to medical costs. That also isnt helping consumption of non basics. We Gen Xers are 48 million while the Boomers were 80 million. 

In reply to by khnum

GPW Pollygotacracker Sat, 06/16/2018 - 06:03 Permalink

"People don't shop for recreation anymore".

My wife would be the exception to that.  Turns over and inspects every item in every store she enters at least once.

"I'll just run in and will be right back."  Sells me every time.  Forty five minutes later I'm still waiting in the car with my head about to explode.

Think football and Lucy and Charlie Brown (with me as Charlie).

In reply to by Pollygotacracker

Singelguy GPW Sat, 06/16/2018 - 08:39 Permalink

And you still haven’t figured that out? The next time she says that, go somewhere else and come back an hour later. I had a friend once who was always an hour late for anything that we planned. After the first few times, i started showing up an hour late as well, and she usually showed up within 5 minutes. 

In reply to by GPW

Captain Nemo d… Fri, 06/15/2018 - 21:19 Permalink

The moral of the story as told by the pictures is if you gather around a circular area and dance like idiots then soon you will have empty escalators and decrepit buildings followed by people sitting in a class and bar charts showing something going down.

MusicIsYou Fri, 06/15/2018 - 21:22 Permalink

Some people beg, some people put a 180 grain bullet going 2900 feet per second through your so-called bullet proof vest. I say that because in close quarters combat you are not going to stop a 180 grain round going 2900 feet per second. I don't care what kind of vest you're wearing you aren't going to stop 180 grains at 2900 feet per second as close range.