Bloomberg has a very interesting article about how retail is on the verge of imploding - not because, as we usually hear, of Amazon, though Amazon doesn't help. It's because so many chains have been purchased by private equity firms in recent years, and PE firms have overloaded them with debt. This will take down some healthy chains too, Bloomberg argues.
What I immediately noticed was where the debt-laden chain stores are. They line up very nicely with the MSAs where a lot of investors are now flocking because they feature high cap rates, even though those MSAs feature declining populations and other bad fundamentals. This article makes the fundamentals seem even worse.
What are your thoughts?
Here's the article: https://www.bloomberg.com/graphics/2017-retail-debt/
I'm really intrigued by the coming results of the slow down and shut down of some main stores and malls. In my opinion something has to take the place of these businesses, be it new ones, or even housing. It seems like an opportunity for some forward thinking individuals and a great money making opportunity. What concerns me are the jobs lost especially for starter jobs for young people
@Phillip Davis a lot of these areas are gonna be building SURBAN areas. A mix of shops and houses. It’s like taking suburban and urban areas together. Happening out here where I️ live. Read the book Big Shifts Ahead by John Burns. Really good book, I️ read it in a day and they go over a lot of these things. Lots of data in charts and graphs.
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