The Real Deal New York

Despite the carnage, some investors are betting on malls

Stocks of mall owners fell in 2017
June 22, 2017 12:41PM

Rendering of the American Dream mall in NJ and Salient’s Joel Beam

Malls are doomed. But are they?

Some investors are buying up retail real estate investment trust stocks, betting that market bears are getting ahead of themselves and that share prices are undervalued. “We believe the stocks have come down to fair value for the risk that we’re taking,” Joel Beam, of asset manager Salient Partners, told the Wall Street Journal.

Salient recently bought shares in mall owner CBL & Associates Properties, whose stock price has fallen by 27 percent this year. On average, the shares of retail REITs are down 15.6 percent this year. Malls and department stores in New York City and across the country are struggling with the rise of online retail, but not everyone is buying into the pessimism.

“This is one of the most attractive investment opportunities these days,” said Matthew Werner of Chilton Capital Management, which recently bought shares in retail REITs like Simon Property Group. “Class A malls are one of the most profitable distribution centers for retailers.” [WSJ]Konrad Putzier