FRT - Retail REITs: Near Term Capex Caution Despite Strong Fundamentals
2024-06-10 23:12:19 ET
Summary
- Increased online sales activity during the pandemic highlighted the importance of an omnichannel strategy for retailers.
- Retail store openings are expected to surpass closings for the third consecutive year in 2024, signaling a shift from the "retail apocalypse" narrative.
- The lack of new retail development and the surge in demand are driving strong rental growth, but recurring capital expenditures and interest expenses are limiting bottom-line growth.
In recent history, e-commerce can be argued as the biggest societal shift to impact commercial real estate. We’ve detailed the topic in retail outlooks from November 2022 and November 2021 , and more recently in our Industrial Outlook from March 2024 . Many expected the surge in online shopping during the pandemic to supercharge the “death of brick and mortar” retail....
Retail REITs: Near Term Capex Caution Despite Strong Fundamentals