Sources: Simon Property, the biggest US mall owner, and Amazon explored turning stores formerly occupied by J.C. Penney and Sears into fulfillment centers
Hookup between Simon Property Group, Amazon would show how retail and logistics are converging more rapidly
Wall Street Journal
Context & Ripple Effects
The Simon Property–Amazon talks are a direct escalation of a shift already underway: as the WSJ reported weeks earlier, retailers were converting closing stores into online fulfillment centers even before foot traffic collapsed further during the pandemic. For Simon, the biggest US mall owner, former J.C. Penney and Sears anchor boxes are its hardest-to-fill inventory; for Amazon, they are pre-built logistics shells sitting inside dense suburban population clusters.
The exploration also fits a long arc of Amazon circling dead retailer real estate — it discussed taking over RadioShack locations as hardware showrooms and pickup/drop-off points back in 2015, and later floated hundreds of brick-and-mortar bookstores. What changes here is the use case: instead of stores selling things, the box itself becomes warehouse capacity, putting Amazon's supply chain physically inside its rivals' former strongholds.
First-order effects
Simon Property Group gains a way to backfill vacant anchor spaces that department-store bankruptcies left empty, while Amazon acquires suburban-adjacent square footage without ground-up construction.
Second-order effects
Other mall owners would face pressure to treat logistics operators as anchor tenants alongside traditional retailers, repricing big-box leases around warehouse economics rather than sales-per-square-foot.
Remaining department-store chains lose a potential landlord ally: if mall REITs can monetize their vacated boxes with e-commerce infrastructure, there is less financial urgency to keep struggling retailers afloat at discounted rents.
Third-order effects
If the pattern holds, US malls bifurcate into hybrid assets — entertainment, dining, and service uses up front, fulfillment capacity in the dark boxes — blurring the line between retail property and logistics property as asset classes.
The trend: Retail real estate is being absorbed into e-commerce logistics, with mall owners converting failed department-store anchors into fulfillment infrastructure rather than hunting new store tenants.
Nothing quite says “brick-and-mortar retail is screwed” like “Amazon wants to convert mall department stores into customerless distribution centers” https://www.wsj.com/...
This has been a trend in industrial/logistics real estate for a few years (last mile delivery for ecommerce), covid-19 accelerated it https://twitter.com/...
I have seen the future and it is Simon Property Group reclassifying a number of malls securing CMBS loans to ‘other properties.’ https://www.wsj.com/...
Amazon is about to turn abandoned JC Penney, Sears stores into fulfillment centers. “To replace department stores, mall owners considered schools, medical offices and senior living. With the current pandemic, industrial is the only thing left now.” https://www.wsj.com/...
There was a good comment on Metafilter a while back in how Sears had all the peices in place to become Amazon before Amazon but blew it all cause business graduates can't see beyond the next cycle cause they've never actually sold anything https://www.metafilter.com/... https://t…
The largest mall owner in the U.S. has been in talks with https://amazon.com/ Inc., the company many retailers denounce as the mall industry's biggest disrupter, to take over space left by ailing department stores. https://www.wsj.com/...
Weren't malls the original fulfillment center? “Amazon reportedly wants to take over JCPenney and Sears stores to turn malls into giant fulfillment centers” https://www.businessinsider.com/ ...
“Amazon and Mall Operator Look at Turning Sears, J.C. Penney Stores Into Fulfillment Centers” The circle is now complete. Soon the Fulfillment centers will open a section as retail stores. https://www.wsj.com/...
Interesting thought, but making malls originally designed to accommodate large inbound freight flows but outsource last mile collection to consumers will require substantial costly outbound logistics infrastructure redesign. https://www.wsj.com/...
“To replace department stores, mall owners considered schools, medical offices and senior living. With the current pandemic, industrial is the only thing left now.” https://twitter.com/...
Same trajectory as the turn-of-the-century Ladies Mile department stores in Manhattan. After WWI the retailers moved uptown and the old department stores were converted to industrial use. A natural progression in loose real estate markets https://s-media.nyc.gov/... https://twitt…