BPYU - Shopping Center REITs: Big Box Boom

• Big Box Is Back: The COVID pandemic has radically transformed consumer spending habits - perhaps permanently - shifting spending towards goods over services and towards larger-format retailers over smaller shops.
• While enclosed regional malls face a long and uncertain road to recovery, the outlook for open-air Shopping Center REITs has brightened considerably this year. Recent earnings results have been impressive.
• Rent collection has fully normalized and trends in occupancy rates and leasing have been encouraging. 9 REITs raised guidance in Q2 and a full earnings recovery appears likely by late-2022.
• It took a few years, but Big Box retailers have learned to compete effectively in the e-commerce era. Shopping centers are becoming hybrid distribution centers in a decentralized last-mile delivery network.
• We've seen the "animal spirits" come alive with several mergers, an IPO, and signs that external growth will be reignited. Valuations again appear attractive as the share price rally has cooled while fundamentals have heated up.

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