In recent years, changing shopping trends and the growth of e-commerce have decimated the U.S. mall sector. Many malls have closed over the past decade, and an even greater number are trapped in death spirals and likely to close within the next five years or so. Meanwhile, hardly any new malls are under construction.
However, on Thursday, Macerich (NYSE: MAC) and Pennsylvania Real Estate Investment Trust (NYSE: PEI) celebrated the opening of Fashion District Philadelphia, an urban mall located in the heart of Philadelphia. This will serve as an important earnings catalyst for both REITs, which could in turn reenergize their moribund stocks.
Fashion District Philadelphia isn't exactly a new mall. Instead, it is the result of a comprehensive multiyear redevelopment of a low-performing mall called the Gallery at market East.