The COVID-19 pandemic has hurt malls and outlet centers financially, but foot traffic has been climbing for both entities since May, according to a recent S&P Global Market Intelligence report. Outlet center foot traffic is increasing faster, however.
S&P used data from AirSage, which collects and analyze real-time mobile signals, GPS and other location data to track movement patterns, to conduct this report. AirSage Data noted that mall and outlet center foot traffic in the U.S is almost reaching pre-pandemic levels.
The report included properties that Simon Property Group, Taubman Centers Inc., Macerich Co., Tanger Factory Outlet Centers, Brookfield Property REIT, Washington Prime Group Inc., Pennsylvania REIT and CBL & Associates Properties Inc. own. Foot traffic to U.S. Malls that publicly traded REITs own was down approximately 15% year over year in early August, while outlet center foot traffic was just above its 2019 levels, according to AirSage.
Tanger’s portfolio had the fastest foot traffic recovery among the analyzed REITs. The improvement was attributed to the outlet centers’ open-air environment. Tanger’s outlet centers began to reopen during the second quarter as states started to lift closure mandates. By the end of the July, 95% of Tanger’s occupied stores had reopened.
“Basically, when the mandates were lifted, consumers were ready to shop,” Tanger CEO Steven Tanger said during the REIT’s second quarter earnings call.
Meanwhile, Simon Property Group saw its outlet centers recover faster than its enclosed mall properties.
“I do think the consumer generally feels a little more comfortable in the outdoor environment,” Simon Chairman, CEO and President David Simon said during the company’s recent earnings call. Simon also noted that increased foot traffic was also correlated with a lower prevalence of COVID-19 cases in a given location.
Taubman Centers and Macerich properties have seen the slowest foot traffic rebound, according to AirSage. The companies are still down about 25% year over year as of August 9.
The increased foot traffic numbers are good news, but malls aren’t likely in the clear just yet, however. Just two weeks ago, it was reported that CBL Properties would likely file for bankruptcy by October 1. Meanwhile, longstanding mall tenants like J.C. Penney, Nordstrom and Neiman Marcus are closing stores or filing for bankruptcy.
Joe Dyton can be reached at firstname.lastname@example.org.