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Simon Property Group – a falling knife?

(Credit: Simon Property Group)

Mall owner Simon Property Group increased its full-year earnings guidance as retail sales and shopper traffic picked up. Occupancy at the company’s U.S. malls and outlets was 91% as of March 31, compared with 94% a year earlier.

Worth Noting: CEO David Simon cited California and New York as two examples where store traffic remains suppressed by Covid-related restrictions. International tourism has also yet to return. 

Retail + real estate crossover continues: The RIET and Authentic Brands Group also agreed to buy Eddie Bauer, adding the outdoor gear and apparel retailer to its collection of brands that includes Aéropostale, Forever 21 and Brooks Brothers. Eddie Bauer has 300 stores across North America, but nearly half of its retail sales last year came through e-commerce, CNBC noted.

Macro TrendsMoody’s Analytics is forecasting national average effective retail rents to fall a further 6.8% in 2021. Vacancy rates are also predicted to reach an all-time high of 12.3%. 

Heard on the StreetSam Zell who recently acquired industrial REIT Monmouth for $3.4 billion: “I previously said that retail real estate was a falling knife, and last I checked, the knife was still falling. We are smart, but I don’t know that we’re very good at catching knives nor do I know anybody who is. I just don’t think there’s an opportunity in retail yet.” [Bloomberg+Reuters+SA]

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