ROIC - Shopping Center REITs: Future Of E-Commerce

• Reopening Rotation: Shopping Center REITs have continued their post-vaccine resurgence into mid-2021, surging another 45% this year and pushing stock prices back near or above pre-pandemic levels.
• Rent collection has fully "normalized" for most REITs, and recent earnings reports showed that, while occupancy rates remain under pressure, a full earnings recovery could come as soon as 2022.
• The pandemic accelerated retailers' investment in their in-store order fulfillment platforms. Shopping centers are becoming hybrid distribution centers in a decentralized third-party delivery network powering same-hour delivery.
• The food "takeout" model - supplemented by delivery platforms like Uber, Postmates, and DoorDash - is becoming ubiquitous across all retail categories, but not all shopping centers are equally well-suited for this evolution.
• While the long-term outlook for open-air strip centers remains far more promising than their enclosed regional mall peers, valuations currently appear stretched, and "bargains" have become harder to find.

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