Bluebirds operates shopping malls. It holds a $30,000,000 deferred tax asset relating to credit carryforwards at the state, local, and federal levels. No valuation allowances exist.

The shopping mall industry is not in good shape due to the loss of anchor stores and the increase in online shopping activity by consumers.

BlueBirds’s business plan for the next 5 years includes:

• The conversion of store space by new tenants (theaters and gyms), none of which are likely to produce the profit levels lost from the stores they replace

• The sale of several malls at depressed prices.

What is the need for BlueBirds to establish a valuation allowance against its deferred tax assets?