SPG - Malls: How Many Is Too Many?
The simple plotline is that the U.S. retail sector is getting destroyed by the so-called retail apocalypse, as consumers increasingly shift toward online shopping. That's definitely a key part of this page-turner, sped up by the coronavirus pandemic, but it's not the whole retail story.
Investors need to step back and consider the nuances hidden beneath the easy narrative and what that means for retailers -- and, increasingly, the real estate investment trusts (REITs) that lease them space.
Over the past month or so, I have visited more than a dozen malls in and around where I live in eastern New York. My goal was to get a first-hand look at what was happening in the retail space. On the one hand, I was pleased to see that people are still visiting their local shopping malls, often in impressively large numbers given the COVID-19 issue. Some retailers, meanwhile, have long wait lines outside of their stores because of reduced capacity rules.