There is little hope of a recovery for the hard-hit retail sector until next year at the earliest, and even so, about 25% of all U.S. malls (totaling about 1,000 now) are doomed to close over the next five years, according to a new report from Coresight Research.

The sorry state of department stores and other anchors, which was true well before the coronavirus pandemic, will be a key factor driving mall closures, with lower-end shopping centers at most risk of closures. One specialist in Class-B and Class-C properties, CBL Properties, is already planning to file for bankruptcy.

A number of properties might be able to survive, or at least delay a possible closure, by changing their tenant mix, the report says. More viable options for some space include grocery and healthcare retail, as well as last-mile fulfillment centers.

But remaking space into fulfillment will not be an option for a large number of properties. Most locations aren't zoned for that purpose, and overcoming local resistance to rezoning will pose an insurmountable challenge in many cases, CNBC reports.

The glum outlook for retail properties is despite the fact that overall U.S. retail spending has bounced back to pre-pandemic levels as of July.

The patterns of consumer spending have changed, however. Americans are buying more than ever from nonstore retailers via e-commerce, which saw year-over-year sales growth of 24.7% in July. Sales were up for the year as well at grocery stores, building and garden supply stores, and sporting goods and hobby stores, according to the Census Bureau.

Clothing retailers and department stores, on the other hand, have been crushed by the pandemic, though they were already suffering sales losses before that. In July, sales at department stores were down 13.4% compared with last year, and clothing stores dropped 20.9% compared with 2019.

In a separate report, Moody's Investor Service says that most retail sectors will suffer falling profits in the quarters ahead, with department stores and apparel and footwear taking the worst hit, losing over 200% and 150% in operating income respectively in 2020.

"Our industry outlook remains negative because we still face two quarters of severe declines, before the recovery begins in 2021 amid an operating environment fraught with uncertainty," Moody's Vice President and Senior Credit Officer Mickey Chadha said in a statement.

Moody's expects overall retail operating income to drop 25% to 30% in 2020.

"The road to recovery will be protracted and challenging, and we do not expect operating profit levels to return to pre-COVID-19 levels until 2022 at the earliest," Chadha said.