It’s no secret that retail is in a tailspin. The rise of online shopping has cratered sales at long-time retail stalwarts like Macy’s Inc (NYSE:M) and Kohl’s Corporation (NYSE:KSS). And while share prices of the retailers themselves have suffered, the owners of the physical brick-and-mortar stores have suffered more.
Retail real estate investment trusts (REITs) have plunged on the recent spate of bad earnings for their major tenants. The sector is down nearly 6% in just one week. And over the course of the past year or so, they’ve suffered much, much worse.
That’s just the kind of opportunity that income seekers should be looking for.
Yes, some retailers are dying … but other retailers are thriving in the new e-commerce world, whether it’s because they’re increasingly participating online, or because e-commerce isn’t really affecting their area of the retail world. Class A mall sales per square foot have continued to rise, while many mall owners have begun to focus more on entertainment and less on shopping. That’s helping to drive sales. Moreover, REITs that own standing real estate continue to see great demand for their properties.
But Wall Street doesn’t know how to pick and choose losers, so a lot of quality retail REITs have been thrown out with the bathwater. That means quality companies have not only gone on sale … but lower prices have resulted in even higher dividends in this part of the real estate space.
With that in mind, here are three retail REITs to scoop up from the wreckage.