"Second-tier malls continue to feel the squeeze," Richard Zigler, O'Conner's Houston research director, tells GlobeSt.com of the current market conditions. Town & Country's just getting pinched more than most. "2002 may be the last for Town & Country Mall," he predicts.

A confidential industry expert tells GlobeSt.com that MetroNational's buyout of the Saks Fifth Avenue retail spot and the planned acquisition of Dillard's retail space most likely will be the final blow for the center. The source says Town & Country's part owner plans to relocate Dillard's to Memorial City Mall, where $300 million has been pumped into renovations. The inside source believes MetroNational, headquartered in Houston, is driving Town & Country's demise since Dillard's is its gateway retailer.

In published accounts, Bill Peel, MetroNational's executive vice president, has made it clear that the final decision for the sites is up in the air. MetroNational officials could not be reached by press time.

Town & Country has experienced operating difficulties for years, pulled out of foreclosure in 1995 by New York City-based American International Group Inc. Difficult accessibility at the US Highway 10 and Beltway 8 intersection must shoulder its part of the blame for waning sales.

Zigler says the second-tier mall fallout is not a sign that the concept is falling by the wayside. Target and Wal-Mart fans have put a big dent in mall sales, but shoppers will still head to regional centers when they want to buy higher-end clothing, explains Zigler. There's also a social component to malls that has become practically a mainstay in American society. Destination malls like the Galleria and yes, Memorial City, will continue to be successful venues, he adds.

O'Conner's retail performance report says Houston's regional malls absorbed 148,416 sf in the fourth quarter while posting 87.28% occupancy. The retail report includes contributions from Marcus & Millichap, Grubb & Ellis, CB Richard Ellis and Insignia/ESG.