July 18, 2016
Matt Werner, CFA, Chilton Capital Management
Portfolio Manager / Analyst at Chilton Capital Management
Class A Mall REITs Standing Tall
According to Green Street Advisors, there are 1,085 malls in the US, of which 589 are graded "B" or higher.
It is entirely possible that we will see many of the remaining 496 malls downsized or repurposed in the next 10-20 years.
The decline in low-quality malls could increase sales at high-quality malls by over 15%.
Contrary to popular belief, the headlines of struggling department store anchors are actually a good thing for high-quality mall owners.
Scale will also be important in the future, as mall owners that are not willing to invest in technology will be left behind.
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