Why is Gold More Than a Safe Haven Asset?

Despite its strong ties to geopolitical events, gold is still driven by supply and demand.

The pandemic has battered real estate investment trusts that focus on retail stores, with Bank of America Corp. analysts calling the second quarter the toughest ever for landlords in the modern era of REITs.

Before the outbreak of Covid-19, store closings had been running at a slower pace than in 2019 — but now they’ve almost eclipsed last year’s total with still more than four months to go in 2020, the analysts said Thursday in a research report. The 9,544 of closures that Bank of America has tallied this year compares with 9,670 in all of 2019.

The jump in shuttered stores is weighing on real estate investments tied to malls and strip centers. Even with rent collections ticking up last month, mall REITs lost 11.6 percent in the third quarter through August 19, the report shows, while strip REITs tumbled 10.3 percent.

“Accelerated bankruptcies and store closings will still push occupancy lower into 2021,” the Bank of America analysts said in the report. “While near term investor focus is on rent collection, we look to leasing activity as a signpost of normalizing conditions.” 

Ascena Retail Group, Barnes & Noble, the Gap, Macy’s, and Office Depot are now on Bank of America’s top tenant watch list for retail REITs due to their greater risk of store closings. PetSmart, PETCO Animal Supplies, Staples, J.C. Penney Co., L Brands, and Neiman Marcus are also on watch for REIT managers.

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