Mizuho's Take On Retail REITs Following ICSC Convention

Start generating passive income through real estate.

Own a piece of your favorite cities through diversified real estate investments in the country's top markets

*Terms and conditions apply. Visit Nada's website for more details.

The recent market volatility in the retail REIT space could be an overreaction to sluggish sales numbers from big-name retailers such as Macy’s, Inc. M and Kohl’s Corporation KSS. After attending the ICSC annual convention in Las Vegas, Mizuho analyst Haendel St. Juste believes better days are ahead for several top retail REITs.

Retail REITs, Malls, Shopping Centers

According to St. Juste, retail REIT investors and management have been surprised by the volatility in the space in the past month.

“Overall, the mood among landlords remains largely optimistic despite weak tenant sales, as tight supply continues to support fundamentals, especially for higher productivity landlords, while shopping/power centers [have] a ‘defensive’ edge,” St. Juste explained.

Related Link: 7 U.S. States Have Shrinking Economies While The Rest Of The Country Booms

He added that financing continues to flow smoothly for retail REITs.

For mall and shopping center REITs, tight supply is more than offsetting lackluster retail sales, and store closures are down significantly compared to last year. This tight supply is helping mall and shopping center REITs maintain precious pricing power within an unstable macro environment.

A Few Top Names

If the near-term, Mizuho expects volatility to continue, but the firm sees significant upside to several top names.

Mizuho has Buy ratings on American Assets Trust, Inc AAT, General Growth Properties Inc GGP, Simon Property Group Inc SPG and Taubman Centers, Inc. TCO.

Disclosure: the author holds no position in the stocks mentioned.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorLong IdeasNewsREITEventsAnalyst RatingsTrading IdeasReal EstateHaendel St. JusteICSCmizuho
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!