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  • Alex Pettee, CFA

Mall Merger Lifts REITs [Daily Update]

  • After jumping by more than 3% last week, US equity markets resumed their rally on Monday as fears over the coronavirus outbreak subside while corporate earnings have been relatively strong.

  • The S&P 500 finished higher by 0.7% while the Dow Jones Industrial Average added another 160 points after gaining 840 points last week. The 10-Year Yield declined to 1.55%.

  • The broad-based commercial Real Estate ETF (VNQ) gained 1.1% on the day, led by the mall REIT sector after Simon Property announced plans to acquire fellow mall REIT Taubman Centers.

  • Taubman, which owns a relatively high-quality portfolio of Class A malls, jumped more than 50% on the day, pushing its gains this month to roughly 100%. Simon Property ended higher by 1.5%.

  • Fellow mall REIT Macerich also jumped by more than 10% on speculation that it could be next in line to be scooped-up by Simon. Lower-productivity mall REIT CBL & Associates, however, dipped another 3%.

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