SPGS - Mall REITs: Only The Strong Shall Survive

• Despite reporting record-low occupancy rates and rental rate spreads, mall REITs have been the best-performing property sector this year, riding the vaccine-driven reopening rotation to gains of more than 40%.
• "A traumatic time for our company." Reflecting on an epic plunge in operating performance over the past year, Simon Property's CEO sounded humbled when discussing recent performance and its outlook.
• While rent collection rates have improved to around 90%, Q1 results showed that vacancy rates continued to climb. Simon is the lone mall REIT projecting positive FFO growth this year.
• From SPARC to SPAC. Desperate times call for desperate measures, and we've been encouraged to see some "fight" and creativity from Simon, which sponsored a SPAC and continues to buy distressed retail brands.
• Dismal earnings reports from mall REITs came despite the strongest year for retail sales in history. Outside of Simon, the remainder of the mall sector remains in a fight for survival with an uncertain future.

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