Struggling malls to fall further behind in 2015- outlook by Phil Wahba @FortuneMagazine January 28, 2015, 1:39 PM EST E-mail Tweet Facebook Google Plus Linkedin Share icons Consumers might be set to shop more in 2015, but that won’t be of much help to the hundreds of malls that are expected to disappear in the next decade. The conventional wisdom that malls are dying is only partly true. What’s really happening is the commercial real estate equivalent of growing income disparity: high quality malls, with tenants such as luxury department store Nordstrom JWN , growing specialty clothing store Uniqlo, and Apple AAPL are pulling away from weaker malls, often with a Sears SHLD or a J.C. Penney JCP , in terms of sales per square foot and value. And 2015 will be no exception, according to Green Street Advisors’ 2015 U.S. Mall Outlook, which the real estate analysis firm exclusively previewed for Fortune. The chasm between the sales per square foot—retail’s most important metric—between so called “A” malls, and “B,” “C,” or “D” (‘D’ stands for death, goes the real estate industry joke) malls keeps growing and will continue to. Sales per square foot among mall real estate investment trusts are up 36% since 2010, according to Green Street. And that has a lot to do with paring poor locations and bringing in more productive tenants. Indeed, General Growth Properties GGP and Simon Property Group SPG , two major mall operators which tend to have higher-end tenants and be in affluent, high population areas, each reported comparable net operating income rose more than 5% in the third quarter. (Both will report fourth quarter numbers soon.) At A++ malls (one such mall is Long Island’s Roosevelt Field, anchored by a Nordstrom, a Penney, a Bloomingdale’s, a Macy’s, and soon a Neiman Marcus), sales rose to $945 from $900 per square foot in 2013 a year earlier, and rose at A malls by $20. But at B’s and C’s, many of which are grappling with the closings of a Sears or a Penney or a tenant like Aeropostale, sales are declining, setting off a self-perpetuating trend that is hard to break. At C malls, the most vulnerable to closing in the coming years, sales were $240 per square foot, down $5 a year earlier. That will continue in 2015. “It’s circular,” said D.J. Busch, a senior analyst at Green Street. “As malls get more productive, they are more in demand from new, growing retailers so it’s a virtuous cycle. Conversely for lower B or C malls, as they lose tenants, it’s harder to find quality replacements.” Almost all of the 39 Penney stores set to close this year are in weak malls (including many where Sears, which is also closing stores, is a co-anchor) that will have a hard time thriving. That’s good for the department store, but bad for the malls and other tenants that rely on Penney, or a Sears for that matter, to bring shoppers to the mall. Indeed, Penney’s sales per square foot per year slipped to $147 in 2013 from $248 in 2007, so dropping stores in C malls will go a long way to lifting those results. Meanwhile, better malls have gotten a boost from the expansion of Apple’s retail stores, which now number 220 and generate almost $5,000 per square foot, lifting the A-malls’ performance. Electric car-maker Tesla TSLA is also opening showrooms at high-end malls like The Westchester north of New York City, and those generate similarly high sales. (One potential threat to the higher-end malls is a strong U.S. dollar that could curb visits by international visitors, who account for 30% of sales at some of the big malls in tourist areas.) Busch says sales at better malls should rise 3% this year, compared to some 1% at the B and C locations, a bigger gap than in recent years, and one set to grow in the future. He expects 15% or so of the 1,500 U.S. malls to close in the next decade. That’s about the same as he expected a year ago, but largely because the lack of new mall construction means supply is tight in the commercial real estate market. “We expect far more malls to close than new ones to open,” Busch said.