Americans are spending less and less at the malls, preferring to shop online. As a result, many US department stores are facing bankruptcy and closure.
According to Morningstar Credit Ratings data quoted by Reuters, $128 billion in commercial real estate loans are due to refinance between now and the end of next year.
Wells Fargo says $38 billion of this was borrowed by retailers and sold as commercial mortgage-backed securities (CMBS) to institutional investors.
Morgan Stanley, Deutsche Bank and other banks say half of these CMBS will face a tough time to get financing on the current terms.
Online shopping and discounts are the main reason for this.
The US Department of Commerce says overall sales have grown 31 percent from 2009, while department store sales have plummeted 17 percent.
Howard Davidowitz, chairman of Davidowitz & Associates, whose firm has consulted retailers since 1981, is predicting half of the 1,100 regional malls will be closed.
"When there is too much, and we have too much, then the only differentiator is price. That's why they're all going into bankruptcy and closing all these stores," Davidowitz told Reuters.
Cumulative losses from mostly 10-year CMBS loans issued in 2005 to 2007 have hit $32.6 billion, according to Wells Fargo.
This month, Wal-Mart reported it wants to shift from retail and bet on online business. Chief Financial Officer Brett Biggs said Wal-Mart would mainly remodel its existing stores and invest in e-commerce with only 20 percent going to the opening of new stores.
The company has boosted investment in online business from $300 million in 2013 to $1.1 billion to increase its share of e-commerce, which accounts for only about three percent of Wal-Mart's total sales.