Why Mall REITs Like Macerich, Simon, and Penn REIT Fell Sharply on May 13
Outlet-focused mall real estate investment trust (REIT) Tanger Factory Outlet Centers (NYSE: SKT) fell about 10% within the first hour of trading on May 13. However, enclosed-mall peers Macerich (NYSE: MAC), Simon Property Group (NYSE: SPG), and Pennsylvania REIT (NYSE: PEI) weren't far behind, each dropping by about 10% (rounding up in a couple of cases) for the day by around 11:30 a.m. Wall Street time. With three of the four names here having reported earnings at this point, investors are still trying to get a read on what they've learned and what it means for the future.
The first quarter really wasn't terrible for the mall REIT niche, since the government's efforts to contain COVID-19 didn't take effect until the latter half of the three-month span. Essentially, the REITs didn't have to close their malls (because they were deemed nonessential) until much of the rent for the first quarter had been collected. Yes, the closures led to weak results, but the real news investors wanted was about April rent collections. That would provide some idea of how bad the second quarter, and beyond, would look.
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Source Fool.com
