Shopping Center REITs: An 'Essential' Bargain

August 27, 2020 | Hoya Capital

Shopping Center REITs: An 'Essential' Bargain REIT Rankings Sector Aug 27 Written By Move aside, retail apocalypse. Despite being the primary "distribution center" to many suddenly-thriving essential retailers, shopping center REITs have plunged more than 40% in 2020 amid the ongoing coronavirus crisis. Shopping Center REITs reported a 17.7% decline in same-store NOI growth in Q2 - by far the worst on record - as landlords struggled to collect rent from non-essential tenants. 13 of 17 shopping center REITs reduced or eliminated their dividend since the start of the pandemic.

Federal Realty managed to increase its distribution to keep its five-decade-long streak alive. The long-term outlook, however, looks far more positive than their enclosed regional mall peers, as leasing spreads remain firmly positive and rent collection has improved to above 80% in August. While we’ve remained bearish on retail REITs, the magnitude and persistence of the sell-off in shopping center REITs appear unjustified, particularly among the higher-quality, grocery-anchored REITs. To continue reading, click here to visit Seeking Alpha! Comments (0) Newest First Oldest First Newest First Most Liked Least Liked Add Comment --> Preview Edit --> Post Comment… Previous Previous Incomes Rise | Savings Swell | REITs Rebound Next Next Lower For Longer | Narrow Rally | Cell Tower M&A?