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📈 Mall REITs Unlock Hidden Value
GameStop stock jumps with Bitcoin move, Kroger countersues Albertsons for failed merger, Consumer confidence at 4 year low, Napster sells for $207M, Closures offer good news for Mall owners
Evelio Silvera
March 26, 2025
In partnership with
Good morning.
⚡ The Fast Five → GameStop stock jumps with Bitcoin move, Kroger countersues Albertsons for failed merger, Consumer confidence at 4 year low, Napster sells for $207M, Closures offer good news for Mall owners
🔎 Market Trends → US stocks end higher as traders focus on tariffs, data; US Stock Futures Rise on Tuesday
And now…
⏱️ Your 5-minute briefing for Wednesday, March 26, 2025:
MARKET BRIEF
Before the Open
As of market close 03/25/2025.
Pre-Market
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Fear & Greed
Markets in Review
Stocks Climb as Markets Shake Off Confidence Slump
The Nasdaq rose 0.5%, the S&P 500 added 0.2%, while the Dow was essentially flat. Investors leaned into tech and communication services, brushing aside another dip in consumer confidence.
The Big Picture:
Despite a downbeat read on consumer sentiment, markets stayed the course. Investors are betting that soft survey data won’t derail real economic momentum, especially as rate cuts remain on the table and corporate earnings continue to impress.
Consumer expectations may be at a 12-year low, but real indicators like home prices and job stability are holding up. That disconnect is driving a cautious—but still constructive—market mood.
Bond yields edged lower as Fed officials reiterated their patient stance. WTI crude was flat at $69.12, and gold rose 0.4%, as investors sought balance between inflation risks and geopolitical calm.
Market Movers:
Merck (MRK) fell 4.8% after signing a $2B licensing deal with China’s Hengrui for a heart drug. Strategic, but not yet earnings-accretive.
KB Home (KBH) dropped 5.2% after trimming its full-year revenue outlook, citing affordability pressure.
CrowdStrike (CRWD) jumped 3.3% as BTIG upgraded the cybersecurity firm to “Buy,” citing strength in endpoint protection and AI-tailwinds.
What They’re Saying:
“Perception is reality when it comes to spending and investment decisions,” Jefferies wrote. “But the hard data just doesn’t match the gloom.”
WHAT WE’RE WATCHING
Events
There are no events scheduled for today.
Earnings Reports
Today: Dollar Tree, Chewy, Petco, Paychex, RH (Restoration Hardware), Cintas, Steelcase, Jefferies Financial Group
Tomorrow: Lululemon, Walgreens, TD SYNNEX, Winnebago, Oxford, AAR, Telesat, TMC, Bitfarms
MARKET BRIEF
Leading News
Mall REITs: The Contrarian Play Where "Bad News" Unlocks Hidden Value
Photo Credit: Mostafa Moraji
Why it matters:
Forever 21's bankruptcy and closure of 350 stores represents not a retail apocalypse but a rental arbitrage opportunity for mall REITs to upgrade their tenant mix and boost rental income.
Zoom Out:
The enclosed mall, long written off by market pessimists, is showing remarkable resilience. While e-commerce continues its march, high-end malls are operating at near full occupancy with rising rents, defying the "retail is dead" narrative.
This contrarian investment thesis is strengthened by mall economics reaching what Compass Point's van Dijkum calls "the best shape in probably 20 years" - driven by negative supply growth as weaker properties exit the market and zero new mall construction.
Key Insights:
Net operating income (NOI) for quality mall operators like Macerich (MAC) has rebounded to pre-pandemic levels despite inflationary pressures - CEO Jack Hsieh's confirmation that "rent is going up" signals improving fundamentals for the sector.
The bankruptcy cycle is proving productive: Simon Property Group (SPG) expects to replace Forever 21 stores with "better retailers at higher rents" - potentially boosting revenue six-fold in some locations through strategic subdividing and tenant upgrades.
European mall giant Unibail-Rodamco-Westfield (URW.PA) has reversed course on its U.S. exit strategy, now planning to retain about a dozen prime American properties where tenant sales have outpaced inflation.
Market Pulse:
"The mall industry right now, in terms of supply and demand, is in the best shape that it's been in probably 20 years," notes Floris van Dijkum of Compass Point Research & Trading.
Bull’s Take:
Quality mall REITs represent a potential asymmetric opportunity: still trading at discounted valuations reflecting past fears, while fundamentals quietly strengthen. Counterintuitively, tenant bankruptcies may be the catalyst that unlocks the next leg of growth.
Headlines
Kroger countersues rival Albertsons after demise of $25 billion merger (link)
GameStop’s stock jumps as the videogame retailer makes its bitcoin move (link)
Consumer confidence plummets to lowest level since January 2021 (link)
Napster, now a streaming service, sells for $207m to Infinite Reality (link)
Instacart and DoorDash go head-to-head on ad tech (link)
7-Eleven Owner Says Couche-Tard Underestimates Antitrust Hurdles to Proposed $47 Billion Deal (link)
CRYPTO
Fear & Greed
Headlines
DAILY SHARE
On the Socials
*Hat-tip to BoringBiz_
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Past performance is not indicative of future results. Email may contain forward-looking statements. See US Offering for details. Informational purposes only.