E-Commerce Irony: Empty Shopping Malls May House Amazon HQ2

Amazon will have plenty of options when it picks the site for its second headquarters, and in an ironic twist for a company that helped introduce the world to online retail, a few of those options may be defunct shopping malls.

Real-estate developers from Phoenix to Washington, D.C., are suggesting former temples of American commerce as prime locations for Amazon's next headquarters.

The proposition makes some sense.

Shopping malls can be massive, big enough on their own to meet the space requirements Amazon laid out for its second home. They also tend to be located within reach of the highways, population centers and airports that Amazon mentioned in its wish list of characteristics for what it calls HQ2.

Another advantage: easy availability. Increasingly, malls are vacant.

The last few years have been awful for brick-and-mortar retail. After overly ambitious store building and borrowing during the pre-recession boom years, and amid a generational shift to online purchases, retailers have been shuttering stores at a record clip. That's laid low many of the malls that house them.

Oliver Chen, who tracks retail for Cowen & Co., said he expects the closure of 20 percent of the roughly 1,200 U.S. shopping malls currently operating.

"We had a situation where so many malls were developed, and too many stores opened," Chen said. "Now there's this digital consumer shift, which is happening faster than people expected. It's survival of the best ones."

The decline of the shopping mall has become a media theme, the stuff of lengthy obituaries and more than one amateur documentarian who broadcasts tours of the ruins. ("These are the ruins of a dying culture," one CBS reporter intones over footage of a demolition).

After Amazon's September announcement that it was hunting for a second home in a North American city, seeking an initial 500,000 square feet by 2019, developers saw...

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