$SPG Whopping drop since my short call in March 2019!

The original thesis revolved round a complete paradigm shift in the way Americans shop. The brick and mortar retail industry is in the crosshairs of a complete disruption. It is now an online driven retail economy. As mall retailers falter left and right, rents per square feet will suffer drastically which strikes at the center of $SPG's revenue with share holders ultimately paying the price in losses. Anchor stores are dropping and the impact to REITs is undeniable. Much has been written about $SPG strong balance sheet, but it all boils down to revenue. I could care less how strong your balance sheet is, if money coming in is less than the year before... you're at a loss. If you invested 100 million developing a mall property in 2017, and in 2020 that properties valuation is worth less... you're at a loss on paper. You can try and ride it out if you paid cash, but it's a hell of a difference when your LTV's are in excess of 70%

The mall bubble has burst, rents are dropping, CAP rates will explode, CRE will collapse.

Yorum:

And then there is COVID-19 and the screeching halt to community gathering