Macerich (MAC - Free Report) recently announced that all 47 of its major retail properties nationwide are now open for business, and a number of centers are witnessing traffic numbers “approaching near normal levels”, indicating a healthy return to business.
However, the company noted that six of its properties in New York, two in New Jersey, and one in Pennsylvania are presently offering limited retail operations, including "curbside pickup" and retail with exterior access. Excluding these properties, other shopping centers of Macerich are ushering in shoppers.
The company noted that the South Plains Mall in Texas, which opened on May 1, registered 93.5% of year-over-year traffic on Jun 14. Meanwhile, Vintage Faire Mall in California's Central Valley, fully open since May 22, witnessed 97.1% traffic on the same day. Further, the company noted that FlatIron Crossing in Colorado, which reopened on Jun 16, also recorded healthy initial traffic of 33% on its first day.
Doug Healey, who serves as the senior executive vice president, leasing for Macerich, also pointed out that “Beyond increasingly strong shopper traffic, some key retail partners including Macy's and Nordstrom are describing better-than-expected sales at their reopened physical stores.” This resumption of activity is encouraging for Macerich, as it helps the company’s tenants to generate cash flows from their business and make rent payments.
Notably, the escalating number of coronavirus cases forced retailers, including Macy’s (M - Free Report) , J.C. Penney and several others, to close their stores in order to contain the spread of the virus. Some of the retailers resorted to reduced store hours, while many others are keeping their e-retail operations running as consumers are now increasingly opting for online purchases. As a result, retail REITs, including Simon Property Group (SPG - Free Report) , Kimco Realty (KIM - Free Report) and several others, which have already been battling store closures and bankruptcy issues, are feeling the brunt because consumers are avoiding gathering in large public spaces. Also, with financial distress of tenants, rent collections have been adversely impacted.
However, Thomas O'Hern, the company’s chief executive officer, noted that “local economies benefit in many important ways from strong retail activity.” The company’s centers generate employment for more than 110,000 people nationwide. Further, the portfolio makes $1.1 billion in sales tax revenues and $225 million in property taxes. These, in turn, support essential services, per the company’s press release.
Currently, Macerich carries a Zacks Rank #3 (Hold). However, shares of this retail REIT have depreciated 65.5% so far in the year, wider than the 23.2% decline recorded by the industry.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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