• Mall REITs are longing for the days when the 'retail apocalypse' was their biggest concern. Despite a 100% rally from their lows, malls remain the worst-performing property sector in 2020.
• Malls reported collection of less than 25% of rents in April and May as retail landlords struggled to collect rent from "non-essential" tenants. Most mall REITs have eliminated their dividends.
• Glimmers of hope have emerged, however, amid the economic reopening as several key mall-based tenants have reported a faster-than-expected demand recovery, prompting a substantial share price rebound.
• While mall REITs may be off life-support for now, the pandemic likely further amplified the significant secular headwinds facing the enclosed mall format and accelerated store closing decisions.
• Absent a miracle, mall REITs are likely to underperform the REIT average for the fifth straight year in 2020. Excluding the relatively steady Simon Property, the sector should be avoided for non-speculative investors.

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