Mall REITS got hammered today as KeyBanc downgraded the whole mall sector mostly on concerns of Sears Holdings.
But …………. Is this really a concern? From my recent experience with various shopping malls there is certainly no less people out shopping and as for the “Outlet Malls” I have visited they are most certainly thriving. One can argue that for even the malls that may have exposure to Sears that the closing of Sears will, in the long term be a net positive for the operators as it will allow the vacated properties to be re-purposed into a more lucrative holding and will more than likely serve to increase their traffic.
Everyone knows that Sears is dying a slow and painful death so speeding things up a bit will not hurt at all.
But, even if it does hurt some mall operators for the short term Dividend Income Investors need to see this panic for the opportunity that it is. A great Buying Opportunity ! Only a small fraction of Mall properties have exposure to Sears. Investors can now pick up shares of these REITS at discounted Prices and achieve higher Yields from the Dividends than they normally could.
Some of the bargains with their current yields are :
CBL & Asscociates (CBL) – 12%
Simon Property Group (SPG) – 4.26%
Tanger Factory (SKT) – 4.08%
Taubman (DCO) – 3.91%
Washington Prime Group (WPG) – 12.44%
Investors tend to overreact and as a Dividend Income Investor you should always be on the watch for opportunities. I am officially declaring Mall REITS as an Out of Favor Stock Sector which means this sector is ripe for picking bargains. Choose wisely though.
Of course you should do your own due diligence before investing.
Your Thoughts ? Please comment below below