Why Mall REITs Macerich, Simon, Tanger, and Penn REIT Jumped on June 5
Shares of mall real estate investment trust (REIT) Macerich (NYSE: MAC) rose as much as 25% in early Friday trading on Wall Street. Following along were peer Pennsylvania REIT (NYSE: PEI), industry giant Simon Property Group (NYSE: SPG), and outlet center-focused Tanger Factory Outlet Centers (NYSE: SKT), which rallied 17%, 16%, and 14%, respectively, at the open of trading. To understand what happened, investors need a little bit of background.
The U.S. economy was, effectively, shut down in an effort to slow the spread of COVID-19. Nonessential businesses, like many of the ones that rent space in malls, were shut down by the government. Citizens were asked to practice social distancing. And places where people gather in large groups, the very purpose of an enclosed mall, were closed to the public. It was a devastating blow to mall REITs, just as it was a devastating blow to mall REIT tenants.
Image source: Getty Images.
Source Fool.com
