• Post-vaccine revival? Shopping Center REITs have been the best-performing property sector over the last month, surging more than 40% following the release of positive coronavirus vaccine trial results.
• After plunging more than 50% early in the pandemic, shopping center REITs have reported stabilizing fundamentals over the last two quarters with rent collection improving to nearly 90%.
• Strong leasing activity was the highlight of third-quarter earnings reports, confirming that the long-term outlook for open-air strip centers remains far more promising than their enclosed regional mall peers.
• Shopping Center REITs are not out of the woods yet. Struggling service-oriented small-shop tenants may not survive a "third wave" of economic lockdowns that have cascaded across the country.
• Following the frenetic post-vaccine rebound, Shopping Center REITs are no longer the "essential bargain" that they were last quarter. We've turned cautious on the sector, but still see value in select grocery-anchored REITs.

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Disclosure: A complete list of holdings and Real Estate and Housing Index definitions and holdings are available at HoyaCapital.com. Hoya Capital Real Estate advises an Exchange Traded Fund listed on the NYSE. Hoya Capital is long all components in the Hoya Capital Housing 100 Index.

Additional Disclosure: It is not possible to invest directly in an index. Index performance cited in this commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Data quoted represents past performance, which is no guarantee of future results. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy.