One of the biggest hurdles struggling retailers face when deciding which stores to shutter is the mismatch they face with property owners. While they want to keep their stores open at the highest-quality properties, those landlords know they could make more money by replacing them with a more popular retailer or an entertainment option.
"Everybody loves somebody that doesn't love them back," said Garrick Brown, Cushman & Wakefield's vice president of retail research for the Americas.
For instance, a property owner that did a deal with Sears a few decades ago could be getting less than 50 cents a square foot annually in rent, Brown explained. If they divided that space into smaller tenants, they could potentially bring in retailers who would pay $40 to $50 a square foot, he said.
An extreme example of this is General Growth Properties, which paid Sears north of $200 million to buy back space at the Ala Moana Center in Honolulu. GGP then redeveloped and expanded this space into a luxury wing that includes a Bloomingdale's.
CBL & Associates, which owns a large quantity of malls with traditional anchor store tenants, has also redeveloped space vacated by Sears, J.C. Penney and Macy's over the years. One example is CoolSprings Galleria, near Nashville, Tennessee. As part of one of its projects, which cost roughly $50 million, it replaced a Sears with The Cheesecake Factory and brought in new tenants like H&M and Ulta.
The return on that redevelopment was about 8 percent, and sales increases at the mall have been in the double digits since it opened roughly a year ago, CEO Stephen Lebovitz said.
"It's a win-win because they're closing a store that's not very productive, and we're replacing it with someone that's going to be more successful," Lebovitz said.
Macy's is exiting four of CBL's malls in this round of closures. At one of those properties, the real estate investment trust is finalizing negotiations with a new anchor store to replace Macy's. CBL will purchase the remaining three stores, currently owned by Macy's, for $5 million.
Not all of these stories will have a happy ending. For the properties that stand to lose both a Sears and Macy's, these mass closures could be detrimental to their future — especially if they don't have the cash to redevelop the space, Brown said. They can also trigger co-tenancy clauses that allow smaller tenants to exit their leases, or get rent concessions.
Many struggling centers in the U.S. are owned by small property owners, after the large REITs sold them off in a flight to quality centers. According to real estate research firm Green Street Advisors, there are more than 320 malls with quality grades of Cs or Ds that are at risk of closing or becoming irrelevant retail destinations.
One mall that was on both Sears' and Macy's latest closures list is the Shenango Valley Mall, in Hermitage, Pennsylvania. The general manager of that property did not immediately respond to CNBC's request for comment as for what it will do to fill the space.