Local Malls, Stuck in ‘Death Spiral,’ Plunge in Value

Crystal Mall’s parking lots used to be so crowded that parents would line up to drop off their teenagers near one of the entrances rather than search for a spot.  

Now, the vast stretches of cracked pavement surrounding this 1980s-era regional mall on Connecticut’s coast have more weeds than cars. Valued by an appraiser at $153 million as recently as 2012, Crystal Mall sold in June for just over $9.5 million in a foreclosure auction.

“To look at it now, it’s disheartening,” said Waterford’s top elected leader, First Selectman Rob Brule, who grew up in this working-class town and described the mall as the social centerpiece of his youth.

Crystal Mall’s cut-rate sales price shows how rapidly the value of America’s regional malls has deteriorated in recent years due to changing shopping habits, competition from other retail and the rise of online shopping.

Older, low-end malls are worth at least 50% and in some cases more than 70% less than they were when mall valuations peaked in late 2016, said Vince Tibone, head of U.S. retail and industrial research for real-estate research firm Green Street.