Simon and other mall owners largely brushed off Sears' bankruptcy filing during calls with analysts last week. Many are saying it provides an opportunity, even as these landlords are now forced to spend billions of dollars renovating empty spaces and potentially suffer from lost rent in between tenants. A recent wave of store closures by big-box retailers and department store chains like Sears, Toys R Us, J.C. Penney and Bon-Ton is forcing commercial landlords to pony up more cash and get creative to replace those spaces with unconventional new tenants, like Nobu hotels.

Still, the "ultimate, unfortunate demise" of Sears came as no surprise to Simon Property Group , the largest mall owner in North America, according to CEO David Simon. It's been planning for it for some time — talking to up-and-coming retailers and hotel companies as possible replacements, as well as disposing under-performing assets, Simon told analysts on a conference call Thursday. The real estate investment trust, which operates more than 100 malls globally, is putting Sears "in the rear-view mirror," he said.

U.S. mall owners see Sears' bankruptcy as "tragic," dumping millions of square feet of empty real estate on a market already marked by store closures and staggering vacancy rates .

Simon says it will spend more than $1 billion in capital to redevelop the 33 Sears stores it has in its portfolio that either have already shuttered or are expected to close later this year. Washington Prime Group, which has 28 Sears locations in its portfolio slated to go dark, says it's allocating up to $325 million of capital to renovate them for new tenants. The latter also said last week it's now expecting net operating income to decline about 2 percent in fiscal 2018, primarily because of Sears.

Other landlords with exposure to Sears and Kmart include Macerich, CBL Properties, Urban Edge Properties and Kimco.

Sears is planning to shut more than 140 locations before the year is over, including those still operating as Kmarts. But it's possible the chain will have to liquidate all of its roughly 700 existing stores if it can't pull together enough financing to stay alive. That could deal an even bigger blow to the real estate industry, requiring mall and shopping center owners to set aside more capital.

Simon and Kimco are among U.S. shopping mall owners that called the situation an opportunity, even if Sears totally liquidates.

"The mall of the future doesn't need five, six ... department stores," Simon said during an earnings conference call. "The ability to reclaim [those spaces] allows us to densify our properties. And I think we have that opportunity in a rather large scale."

While outdated department stores are going dark, Simon also said the smaller, specialty shops inside the malls are thriving, and their sales are actually up.

"Maybe the industry got too carried away with having all these big department store boxes. As we transition to a smaller, more appropriately sized group ... I think the center will get healthier," he explained.

Simon has diversified the types of tenants it usually courts to fill empty stores, replacing an old Belk department store at Phipps Plaza in Atlanta with a Nobu hotel, office space and a 90,000-square-foot Life Time Athletic center. Landlords are also starting to look at co-working spaces and apartments as other fillers.

"Let's face it. If you are a tenant and you get put down a Sears wing of a Simon mall, you are not exactly thrilled," Sandler O'Neill + Partners analyst Alexander Goldfarb told CNBC. "Now if they rip down the Sears and put in restaurants or a movie theater," it's a welcome change.

To be sure, it's not yet clear how many Sears and Kmart stores will ultimately close — before it filed for Chapter 11 bankruptcy, the department store chain had more than 700 stores open across the U.S., compared with more than 3,000 during its heyday. Back-filling these spaces will be costly, regardless, and can take years.

When sporting-goods retailer Sports Authority liquidated in early 2016, only about a third of its empty stores were filled within the first 18 months, according to an analysis by real estate research firm Green Street Advisors. About 15 percent are still empty today.

Analysts say companies like Macerich, CBL and Washington Prime should also be thinking about contract clauses that may allow tenants like Gap or American Eagle to terminate their leases and shut stores within the mall without penalties, when a department store goes dark.

"There is limited visibility into how prevalent these clauses are in the REITs' portfolios, but they could easily put a low-productivity center with limited retailer demand into a proverbial death spiral," Green Street Advisors' lead retail analyst D.J. Busch said.

Then, another fear among analysts and investors is that with these hefty redevelopment costs, some retail REITs — which are required because of their structure to pay out at least 90 percent of taxable income to shareholders in the form of a dividend — won't be able to keep up with their dividend payments.

Overall, shopping mall owners are saying Sears' bankruptcy allows them to bring in more stable tenants and better traffic drivers — budding e-commerce brands like Untuckit and Casper, medical facilities, food halls or play spaces for kids.

"While some legacy retailers have been unable to adapt and compete in the new environment, resulting in reorganization or liquidation, there are many more savvy, well-capitalized and experienced retailers who have successfully adapted their business models and are flourishing," Kimco CEO Conor Flynn told analysts on an earnings call Thursday. "We are also seeing many new and creative concepts stepping in and grabbing market share at a rapid clip."

To replace Kmart stores, for example, Kimco has been working with off-price retailers like TJ Maxx and Five Below, both of which are still growing across the U.S.

Simon and Kimco both last week raised their full-year outlooks, citing an acceleration in retailers looking to open stores, along with more retailers investing in their stores to drive sales.

Other retail REITs including Macerich, Taubman and Seritage are set to report earnings this week. Analysts expect to learn more about their plans to back-fill empty Sears boxes.