Mall stocks fall as retail sales plunged in March

Nareit’s mall index down 9%, the biggest drop among all REIT groups

TRD NATIONAL /
Apr.April 15, 2020 02:57 PM
Robert Taubman of Taubman Centers, Louis Conforti of Washington Prime Group and David Simon of Simon Property Group (Credit: Donato Sardella/Getty Images, Mireya Acierto/Getty Images, iStock)
Robert Taubman of Taubman Centers, Louis Conforti of Washington Prime Group and David Simon of Simon Property Group (Credit: Donato Sardella/Getty Images, Mireya Acierto/Getty Images, iStock)

The stocks of mall real estate investment trusts tumbled Wednesday, as the U.S. saw a record drop in retail sales last month.

While the S&P 500 and Dow Jones Industrial Average fell about 2 percent each, major mall stocks nosedived, performing worse than the broader market and REITs in general.

Macerich, for instance, closed down over 13 percent, and CBL & Associates Properties fell almost 11 percent. Washington Prime Group plunged over 15 percent, and Simon Property Group fell just under 10 percent Wednesday. Taubman Centers, which is being acquired by Simon, dropped by about 5 percent.

Meanwhile, the FTSE Nareit All REITs index, which tracks all publicly traded REITs, fell Wednesday by a little more than 4 percent. As of 3:45 p.m., Nareit’s regional mall index was down 9.32 percent, the largest daily drop among all the REIT indices the industry group tracks.

After the Federal Reserve announced another round of lending assistance to individuals and businesses last week, REITs outperformed the broader market. But Wednesday, stocks fell as the U.S. Census Bureau reported that retail sales plunged by 8.7 percent in March from February, the worst monthly decline on record, and by 6.2 percent from the year before.

Government shutdowns because of the coronavirus have disproportionately impacted the hotel and retail sectors. Clothing stores, a retail sector already struggling with changing consumer preferences, recorded the steepest monthly drop off in sales, down almost 51 percent. Car dealerships followed, down almost 27 percent. Sales at food establishments were down over 26 percent.

Mall owners have already taken steps to preserve funds. Macerich last month upped the amount of stock it would pay out to investors in lieu of cash. David Simon of Simon Property Group took a pay cut and furloughed staff. And on Wednesday, Washington Prime Group said it was suspending its quarterly cash dividend, furloughing 20 percent of its staff and cutting senior pay.

Write to Mary Diduch at [email protected]


Related Articles

arrow_forward_ios
Hudson Pacific Properties CEO Victor Coleman (Illustration of Victor Coleman by The Real Deal; iStock; Coleman via Hudson Pacific)

Hudson Pacific is effusive about Blackstone deal, defensive about office space

Hudson Pacific is effusive about Blackstone deal, defensive about office space
Gov. Gavin Newsom

Reclose the economy: Newsom shuts down malls, restaurant dine-in

Reclose the economy: Newsom shuts down malls, restaurant dine-in
Foot Traffic At Major LA Retail Arteries Down Significantly

TRD Insights: LA retail hasn’t rebounded in these major submarkets

TRD Insights: LA retail hasn’t rebounded in these major submarkets
Carson Mayor Albert Robles and a rendering of the proposed project (Credit: The city of Carson)

Simon-Macerich mall project in Carson sparks latest legal claim

Simon-Macerich mall project in Carson sparks latest legal claim
Alicia Silverstone from the film 'Clueless', 1995, and a rendering of the Beverly Center (Credit: Paramount Pictures/Getty Images, and Beverly Center via Los Angeles Times)

For LA’s malls, lawsuits could be the next crisis

For LA’s malls, lawsuits could be the next crisis
Baldwin Hills-Crenshaw Plaza mall and CIM co-founder Avi Shemesh

CIM Group backs out of mall buy after community backlash

CIM Group backs out of mall buy after community backlash
The Egyptian theater (Credit: iStock)

LA movie theaters will soon reopen, but they won’t be the same

LA movie theaters will soon reopen, but they won’t be the same
From left: Bill Shopoff, Sandy Sigal, and David Simon

Payment Gap: Retailers are reopening, but many aren’t paying rent

Payment Gap: Retailers are reopening, but many aren’t paying rent
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...