Why savvy real estate investors are looking at mid-level malls

Certain conditions make the assets look a little more appealing

TRD New York /
Feb.February 13, 2018 09:30 AM

Jefferson Valley Mall

High dividends have some investors taking a second look at “class B” shopping centers.

Due to falling share prices, mall operators’ dividends have increased dramatically, some well over 15 percent, the Wall Street Journal reported. For example, Tennessee-based CBL & Associates Properties and Ohio-based Washington Prime Group saw dividends spike 19 and 18 percent, respectively, last year, even as shares nosedived

Still, the federal tax overhaul, coupled with rising income of consumers, could act in favor of mall operators. Changes to the tax law also mean income from real estate investment trusts will pass through to investors, possibly making these underperforming assets more appealing to investors.

“It is within the strike zone of attractiveness and it certainly intrigues me,” Joel Beam, managing director and senior portfolio manager of Salient Partners LP, told the Journal. He added: “Investing in the equities at this point is for adults only.”

A recent report from Green Street Advisors found that J.C. Penney’s was particularly exposed to declines in Class-B malls, while rival Macy’s has been aggressive about closing low-performing stores in Class B and C malls. [WSJ] — Kathryn Brenzel 


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

From left: 172 Madison Avenue, 100 East 53rd Street, Woolworth Tower, 53 West 53rd Street, 615 10th Avenue

Loan wolves: Bankers are stalking developers as debts come due

State Sen. Julia Salazar and Assembly member Harvey Epstein proposed the tax this month in an effort to disincentivize real estate speculation (Credit: iStock, Getty Images)

Experts take issue with proposed tax on mezzanine loans

Brookfield's largest-ever $15B property fund has invested in properties from New York (666 Fifth Avenue) to Bangalore (the Leela Palace hotel) (Credit: Brookfield, Getty Images, Leela)

Real estate fundraising hits lowest level since 2013

Some investors continue to find U.S. commercial real estate as attractive places to park their capital (Credit: iStock)

Brexits and Bubbles: How investors view Europe’s shaky real estate market

State Senator Julia Salazar and Assemblymember Harvey Epstein (Credit: Getty Images)

Pols take aim at private equity with plan to tax mezz debt

Donald Trump with Rep. Emanuel Cleaver II, Rep. Ron Kind and Sen. Cory Booker (Credit: Getty Images, iStock)

Trump’s Opportunity Zone program is under investigation

arrow_forward_ios
Loading...