Keepin' It Real 

Economics, Housing, & Commercial Real Estate Analysis

ETF express.png
  • Alex Pettee, CFA

Mall REITs: Catch A Falling Knife

  • For full article, click here to visit Seeking Alpha!

  • Despite the strongest year of retail sales growth since 2015 and a 30% decline in store closings, mall REITs continued to skid in 2018. Excluding Simon, the sector plunged 32%.

  • The bifurcation between top-tier and lower-tier mall REITs continues to widen. Store closings remain elevated in low-productivity properties and the outlook for these weaker malls remains weak.

  • A new and unexpected bifurcation has emerged: between REITs and their tenants. High-productivity malls reported a 7.8% rise in tenant sales per square feet in 4Q18, but just a 1.1% rise in same-store NOI growth.

  • For high-productivity malls, however, the metrics are stronger than the stock performance suggests. Occupancy remains around 95% and leasing spreads averaged 10% in 2018 as the long-term outlook remains solid.

  • Lower-productivity mall REITs appear to be a recession away from the end. That said, another half a decade of solid economic growth could be enough to turn it all around.

  • Facebook Social Icon
  • Twitter Social Icon
  • LinkedIn Social Icon

Hoya Capital Real Estate, LLC

(833) HOYA-CAP

Hoya Capital Real Estate ("Hoya Capital") is an SEC-registered investment advisory firm that provides investment management services to ETFs, individuals, and institutions, focusing on portfolio and index management of publicly traded securities in the real estate industry. It is not possible to invest directly in an index. Index performance cited in this website or commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Nothing on this site nor any published commentary by Hoya Capital is intended to be investment, tax, or legal advice or an offer to buy or sell securities. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and should not be considered a complete discussion of all factors and risks. Data quoted represents past performance, which is no guarantee of future results. Investing involves risk. Loss of principal is possible. Investments in companies involved in the real estate and housing industries involve unique risks, as do investments in ETFs, mutual funds, and other securities. Hoya Capital has no business relationship with any company discussed/mentioned. Hoya Capital never receives compensation from any company discussed/mentioned. Hoya Capital, its affiliate, and/or its clients and/or its employees may hold positions in securities or funds discussed on this website and our published commentary. A complete list of holdings and other important disclosures and definitions are available by clicking the links below.

Privacy Policy 

 Client Relationship Summary 

Hoya Capital's ADV Part 2

Important Disclosures, Definitions, & List of Holdings 


The Easy Way To Invest In Real Estate