Mall operating fundamentals are expected to recover more quickly than previously predicted, thanks in part to tenant sales that are better than expected, according to an analysis from Green Street.
Despite the rise of the Omicron COVID variant, which threatened foot traffic when it first appeared, and ongoing supply chain challenges, brick and mortar retail sales remained solid and are up 17% over Q3 2019 levels. Meanwhile, e-commerce sales decreased for the first time this year, down 3% over Q2 2021. Apparel stores—the most significant retailer type for malls—have mostly caught up to other categories, Green Street analysts say.
The firm revised its forecast for mall REIT NOI next year higher; the metric is now 1% down from 2019 levels, up 300 basis points over prior estimates.
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