Why Is Everybody Picking On Malls?

Implications: The past 12 months have seen mall stocks drop 31%.  Same store sales are down and store closings are up. So what?   Mall REIT profits are up and occupancy rates are holding steady at 94%. Re leasing rates are also holding steady in the top line REITs but not in the REITs with a majority of product in smaller markets or in "B & C" malls. Is this the beginning of a disaster or simply the routine workings of an orderly market?

Analysis: In this writer's firm opinion, the retail world has been "overstored and overmalled" for many years. The past few years of so much money at such low interest rates have contributed to the unwarranted growth of new properties being developed well ahead of market demand.

All of a sudan the lenders seem to have awoke to this  "sudden" situation and are restricting virtually all loans on new product or refinancing of older ones. What's a fella to do with his mall REIT stock?

Well lets look at the facts. In 2007 GGP, Macerich, Simon, Taubman & Westfield grew FFO per share. For REITs with concentrations of properties in smaller markets, however, there was a slightly different story. CBL, PREIT and Glimcher, despite strong re leasing results, all had lower net income.
 
My goodness, does this mean that reporters and analysts are no longer going to be able to lump all mall REITs together as commodities? Does it mean that they may actually have to do their homework to pick the good from the bad? Well its a good thing that GLG is available to help provide some guidance!