Brookfield Asset Earmarks $5 Billion To Help Struggling Mall Retailers

Brookfield, which owns stake in numerous malls and related properties, is going to spend $5 billion to try and get the industry back on track after the coronavirus pandemic.

The funds will be managed by Ron Bloom, managing partner and vice chairman of Brookfield’s private equity arm, who said the focus would be on helping small businesses get back on their feet.

“We believe this is a critical component to getting the economy moving again, and we would like to partner with companies and entrepreneurs that can draw on our capital and expertise to stabilize and grow their business,” Bloom said, according to CNBC.

Brookfield has been moving in on mall-centric retail for some time, acquiring all of the stake for U.S. mall owner General Growth Properties (GGP) in 2018. GGP had previously teamed with Simon Property Group, the biggest mall owner in the country, to buy Aeropostale.

Brookfield also spent time grabbing Las Vegas-based Fashion Show and Illinois’ Oakbrook Center in recent years.

In 2020, Brookfield has teamed with Simon and Authentic Brands Group to acquire Forever 21, which was in bankruptcy court.

Retail mall stores were some of the hardest-hit with the pandemic, which forced store closures and steep revenue downfalls on an industry already struggling to stay alive due to eCommerce. Last year, over 9,000 retail stores closed in the U.S., up from the previous record high of 6,700 in 2017.

The problem has only been expedited – the coronavirus will potentially close around half of all large department stores in U.S. malls. Those stores are usually large, traffic-drawing centerpieces for malls.

Simon Properties has been spending money to try and “reinvent” the U.S. mall around the shortcomings faced before the pandemic. Simon invested in trying to make malls multi-use facilities, putting in office spaces and hotels as new tenants to keep the revenue flowing.

Post-coronavirus mall-going will likely have to communicate safety precautions and sanitation measures to get customers to come back in the same numbers they used to.

After the pandemic, malls may be looking at operating with fewer employees and reduced hours. And new ideas like pop-up stores or cashierless models could take off in the future.

Some analysts say new amenities like luxury restaurants, virtual dressing rooms and more could help reluctant customers return, as malls’ usual output like apparel, jewelry and cosmetics might not be in high demand after the pandemic.