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Does the Amazon Effect Equal a Compelling Mall REITs Buying Opportunity?

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A recent analysis from BTIG takes a detailed look at the Amazon recent announcement of its proposed $13.7-billion acquisition of Whole Foods and whether it has a negative impact on the performance of the mall REITs that the firm covers.

The consensus is that the mall sector is far from being dead, and had been the best performing REIT sub-sector along with strip malls, until the announcement that is.

Beginning on June 16th, just after the announcement, BTIG saw a reversal on that good performance for mall REITs and say that it “was completely unwarranted.”

The firm then further reiterated its buy ratings on mall REITs including companies like General Growth Properties, Simon Property Group and Macerich, the name a few.

“We believe that the Amazon announcement, together with WalMart’s Bonobos acquisition announcement, confirms that the retail future is an omni-channel one and that the primary market opportunity is the household segment with above-average income levels,” says the firm’s report.

The firm continues that it interprets the pull back in share prices following the Amazon announcement makes for “a compelling buy opportunity.”

Check back in the next day or so for more analysis from BTIG, where they go more in depth on Amazon and the effect on strip center as it relates to pressure on REIT shares.


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