Retail Apocalypse Becomes Retail Euphoria


  • The "retail apocalypse" narrative that has been aggressively pushed by the financial media couldn’t have been more wrong. The stars are aligning for a record-smashing holiday season for retailers.
  • Financial conditions are ideal for robust growth in retail sales. Consumer confidence is near multi-decade highs, household net worth is surging, and wintery weather conditions have been favorable.
  • Brick and mortar sales trends have seen a resurgence in 2017 amid weakening growth in e-commerce. Retailers like Walmart are proactively emphasizing and encouraging the higher margin in-store sales channel.
  • Retailers themselves got a huge Christmas present from the tax reform package. Retailers stand to benefit more than any other industry from the corporate tax cuts.
  • After getting hammered in early 2017 amid a wave of store closures, retail REITs have rallied into year-end. The sentiment remains too negative and could reverse after the holiday season.

REIT Rankings: Shopping Center

In our REIT Rankings series, we analyze one of the fifteen real estate sectors. We rank REITs within the sectors based on both common and unique valuation metrics, presenting investors with numerous options that fit their own investing style and risk/return objectives. We update these rankings every quarter with new developments.

REIT Rankings: Shopping Center

We encourage readers to follow our Seeking Alpha page (click "Follow" at the top) to continue to stay up-to-date on our REIT rankings, weekly recaps, and analysis on the REIT and broader real estate sector.

Shopping Center REIT Overview

We separate retail REITs into two categories: open-air shopping center REITs and enclosed mall REITs. We recently updated our quarterly mall report: "iMall X: A Holiday Resurgence." While the macro trends are similar with retail REIT categories, open-air shopping center REITs are generally seen as more resistant to e-commerce than malls and exhibit distinct operating characteristics.

Shopping center REITs comprise roughly 7% of the REIT Indexes (NYSEARCA:VNQ and NYSEARCA:IYR). Within our market value-weighted Shopping Center REIT index, we track ten of the eighteen shopping center REITs within the sector, which account for roughly $50 billion in market value. American Assets (NYSE:AAT) Acadia Realty (NYSE:AKR), Brixmor (NYSE:BRX), DDR (DDR), Federal Realty (NYSE:FRT), Kimco (NYSE:KIM), Regency Centers (NASDAQ:REG), Retail Opportunity (NASDAQ:ROIC), Retail Properties of America (RPAI) and Weingarten (NYSE:WRI).

shopping center REITs

We separate the space into three categories: power/strip centers, grocery-anchored centers, and street-level urban retail. Grocery-anchored centers have historically commanded premium valuations relative to power centers, a premium that has expanded in recent years as e-commerce has encroached on the competitive positioning of many "big-box" retailers that reside in power centers. Shopping center REITs have been proactive in recent years in transforming the tenant mix into a more "experience-oriented" portfolio that is less threatened by disintermediation.


Despite these efforts, the

This article was written by

Hoya Capital profile picture
Build sustainable portfolio income with premium dividend yields up to 10%.

Real EstateHigh Yield Dividend Growth.

 Visit for more information and important disclosures. Hoya Capital Research is an affiliate of Hoya Capital Real Estate ("Hoya Capital"), a research-focused Registered Investment Advisor headquartered in Rowayton, Connecticut. 

Founded with a mission to make real estate more accessible to all investors, Hoya Capital specializes in managing institutional and individual portfolios of publicly traded real estate securities, focused on delivering sustainable income, diversification, and attractive total returns. 

Collaborating with ETF Monkey, Retired Investor, Gen Alpha, Alex MansourThe Sunday Investor, and Philip Eric Jones for Marketplace service - Hoya Capital Income Builder. 

Hoya Capital Real Estate ("Hoya Capital") is a registered investment advisory firm based in Rowayton, Connecticut that provides investment advisory services to ETFs, individuals, and institutions. Hoya Capital Research & Index Innovations is an affiliate that provides non-advisory services including research and index administration focused on publicly traded securities in the real estate industry.

This published commentary is for informational and educational purposes only. Nothing on this site nor any commentary published by Hoya Capital is intended to be investment, tax, or legal advice or an offer to buy or sell securities. This commentary is impersonal and should not be considered a recommendation that any particular security, portfolio of securities, or investment strategy is suitable for any specific individual, nor should it be viewed as a solicitation or offer for any advisory service offered by Hoya Capital. Please consult with your investment, tax, or legal adviser regarding your individual circumstances before investing.

The views and opinions in all published commentary are as of the date of publication and are subject to change without notice. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Any market data quoted represents past performance, which is no guarantee of future results. There is no guarantee that any historical trend illustrated herein will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that any outlook made in this commentary will be realized.

Readers should understand that investing involves risk and loss of principal is possible. Investments in real estate companies and/or housing industry companies involve unique risks, as do investments in ETFs. The information presented does not reflect the performance of any fund or other account managed or serviced by Hoya Capital. An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes.

Hoya Capital has no business relationship with any company discussed or mentioned and never receives compensation from any company discussed or mentioned. Hoya Capital, its affiliates, and/or its clients and/or its employees may hold positions in securities or funds discussed on this website and our published commentary. A complete list of holdings and additional important disclosures is available at

Disclosure: I am/we are long VNQ, SPY, MAA, CPT, CCP, OHI, PLD, GGP, TCO, PEI, STOR, SHO, SUI, ELS, ACC, EDR, DLR, COR, REG, CUBE, PSA, EXR, BXP, SBRA, AMT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: All of our research is for educational purposes only, always provided free of charge exclusively on Seeking Alpha. Recommendations and commentary are purely theoretical and not intended as investment advice. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. For investment advice, consult your financial advisor.

Recommended For You

Comments (60)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.