Morningstar Recommends Retail REITs as a Contrarian Play?

door-1802621_960_720.pngA few weeks ago, analyst Edward Mui of Morningstar recommended three large retail REITs: “High-quality, well located, and compelling physical retail environments will still be successful even as online shopping grows.”

This in the midst of The Retail Apocalypse is Officially Descending Upon America with an expected 3,500 stores expected to close down in the next couple of months. The American consumer is tapped out, and while certain retail locations will still perform as consumers want experiences of dining out, strolling through nice areas, etc., according to the U.S. Census Bureau, national department store revenue is down by $7.2 billion than what it was in 2001.

Legacy retailers are getting hit hard right now. According to Bloomberg, Payless Shoes is expected to announce 500-1,000 store closures next week. On the other hand, Amazon and other online retailers continue to expand.

When was the last time you were in a mall and bought something? How does that compare to your behavior five or 10 years ago?

GGP, Inc. (GGP: US) was recently featured in Bloomberg: Kiddie Activity Hubs Seen as Way to Make Malls Amazon-Proof. The CEO of GGP seems to think that KidZania can save his malls. I don’t think a lot of kids are hoping to be retail mall REIT CEO’s when they grow up!

This entry was posted in Retail mall REITs, Short retail mall REITs, Uncategorized by Ron Mahabir. Bookmark the permalink.

About Ron Mahabir

Ron Mahabir has been focused on major macro trends since the mid-1990’s when he began investing in early-stage Internet companies. In 1999, Ron moved to Tokyo to concentrate on the opportunity provided by the Asian Financial Crisis. He established the Japan office for Colony Capital, a Los Angeles based private equity group which has invested over US$39 billion. As President of Colony Japan, Ron oversaw the acquisition, management and disposition of corporate, non-performing loan and property transactions. In 2004, Ron foresaw the makings of a credit bubble and until late 2006 led an investment in and turnaround of the largest mortgage default communications company in North America, The Walz Group. Since acquisition, The Walz Group has experienced significant growth and was listed at #45 on the Inc. 5000 (2008). In anticipation of the largest emerging macro opportunity, the twin crises in resources and the environment, Ron co-founded Asia Cleantech Capital in late 2006. Based in Singapore, Asia Cleantech is focused on investment in clean forms of transportation and power for the Asia Pacific. Ron Mahabir graduated with honors from the Haas School of Business at the University of California, Berkeley.

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