What, Me Worried?

Implications: Wall Street worries about the recession's impact on mall REITs are discussed in this article and found to be groundless. The article compiles recent Conference Calls with the CEOs of the leading mall REITs and concludes that once again the leading financial analysts have misread their tea leaves where the mall REITs are concerned.

Analysis: Based on the 4Q and year-end earning results and comments by Messrs. Simon, Bucksbaum and Taubman, this reporter concludes that "Overall, the regional mall sector is one of the more stable and defensive REIT sectors because of the long term leases and high quality assets". 

I am in total agreement with this consensus of industry experts and can not figure out why the financial community refuses to understand why the mall REIT sector does not respond to a recessionary economy in the same manner as the manufacturing or service sectors.

Mall REITs are a mature and stable industry. There is little if any growth and should be viewed in the same manner as other mature low growth industries.  In fact, because of the unique tax structure of the REIT industry, their stock values seem to be more responsive to short term changes in interest rates than to short term changes in the economy.