This Mall REIT's Largest Tenant Just Went Bankrupt
Forever 21 recently filed for Chapter 11 bankruptcy. It's yet another fashion retailer that has hit the skids because it couldn't keep up with the changes in customer buying habits taking shape today. The company announced plans to close stores and refocus its efforts around its best locations. That means that the growth of online shopping is once again buffeting the mall real estate investment trusts (REITs) in which stores like Forever 21 are located.
This time, however, the potential impact highlights some important differences between mall owners like Simon Property Group (NYSE: SPG), Taubman (NYSE: TCO), and Macerich (NYSE: MAC).
The first thing most investors will likely think about when noting the Forever 21 bankruptcy is the so-called "retail apocalypse." That's an overhyped phrase used to highlight the increasing importance of online shopping. Truth be told, the bankruptcy is partly a sign of this issue. However, a big portion of Forever 21's problem is that it expanded at the wrong time. It also started to increase the size of its individual stores, which made it that much harder to afford its rent. So the damage was at least partly self-inflicted.
Source Fool.com
