Malls and their Hapless Investors Keep Getting Crushed

(Creative) Destruction in the brick-and-mortar meltdown.
Investors in retail malls didn’t need another wake-up call. They’ve been wide awake all year, hearing from Wall Street that there’s no brick-and-mortar meltdown even as the shares of their real estate investment trusts (REITs) have gotten crushed by the travails of brick-and-mortar retail and the over-malling of America. But late Thursday, mall investors got another unneeded wake-up call.
CBL Properties, a mall REIT with 119 mostly retail-oriented properties, reported earnings, and shares plunged 26% on Friday, to $5.92. They’d already been dropping for years because the brick-and-mortar retail meltdown is structural, and not new, and will not turn around before it’s finished melting down. Shares of CBL are down 50% year-to-date and 75% from May 2013.
‘This quarter’s results fell below our expectations as our revenues were impacted by additional bankruptcies, store closures and rent concessions,’ CEO Stephen Lebovitz summarized it in the third-quarter earnings report.

This post was published at Wolf Street by Wolf Richter ‘ Nov 3, 2017.