- "There is no question in my mind that retail is a falling knife, and we are for sure not at the bottom," real estate mogul Sam Zell told CNBC.
- "The pandemic has accelerated the amount of online retail, and I don't think that's ever going to change," he added.
- There have been dozens of retail bankruptcies and thousands of store closures announced by retailers this year, and more are on the way as the coronavirus pandemic wreaks havoc on many companies.
One of the biggest real estate moguls in America — who used to be one of the largest investors in retail — thinks there is still more turmoil to come for an industry that has already seen dozens of retail bankruptcies and thousands of store closures this year.
"There is no question in my mind that retail is a falling knife, and we are for sure not at the bottom," Sam Zell told CNBC's "Squawk Box" on Wednesday morning.
"We started this whole [pandemic] with more retail space per person than any other country in the world, by a multiple," Zell said. "The change in retail is really just a reorganization of oversupply."
"The pandemic has accelerated the amount of online retail, and I don't think that's ever going to change," he added. "That's going to require future retail real estate to be very different than it has [been] up until now."
The coronavirus pandemic forced retailers like Nordstrom and Gap that were deemed nonessential to temporarily shut their stores, to try to curb the spread of Covid-19. Malls also went dark.
The headaches have only since mounted for retail real estate companies like the biggest U.S. mall owner Simon Property Group and New Jersey's American Dream owner Triple Five Group, which are grappling with retail chains and restaurants either not paying rent or going out of business entirely.
Tennessee-based mall owner CBL & Associates is expected to file for bankruptcy before the year is over — another sign of how much stress the industry is facing.
Only a handful of retailers including Walmart, Target and Dick's Sporting Goods have reported strong sales during the pandemic, with consumers flocking to their websites and stores for groceries, outdoor gear and other essential items.