A 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!