REITs Struggle After Landlords Faced Toughest Ever Quarter
Signs of optimism emerge for retail REITs — even as Bank of America warns that “accelerated bankruptcies and store closings will still push occupancy lower into 2021.”
August 20, 2020 | Christine Idzelis | Institutional Investor
The pandemic has battered real estate investment trusts that focus on retail stores, with Bank of America Corp. analysts calling the second quarter the toughest ever for landlords in the modern era of REITs.
Before the outbreak of Covid-19, store closings had been running at a slower pace than in 2019 — but now they’ve almost eclipsed last year’s total with still more than four months to go in 2020, the analysts said Thursday in a research report. The 9,544 of closures that Bank of America has tallied this year compares with 9,670 in all of 2019.
The jump in shuttered stores is weighing on real estate investments tied to malls and strip centers. Even with rent collections ticking up last month, mall REITs lost 11.6 percent in the third quarter through August 19, the report shows, while strip REITs tumbled 10.3 percent.
