It looks like Dillard's wants to take the steps to start a REIT. And after the firm announced its intentions in an SEC filing, department stores and other retailers that own a lot of their real estate, like Macy's and The Home Depot, saw their shares rise.
(Read the full Dillard's SEC filing here.)
Dillard's is practically the last name we think of when considering innovation in the retail industry, but it doesn't seem like many retailers have followed this path. Regional New York City chain Alexander's became a REIT after its purchase by Vornado in the 1990s, but by then it had shut all of its stores. William Ackman wanted Target to spin its real estate into a REIT, but that never materialized. A few years back, there was talk of McDonald's doing the same. People thought it would happen with Sears.
It sounds like Dillard's would be the own landlord of its nearly 300 stores and making money from their results. That wouldn't have been such a good prospect not too long ago, but its financial results are improving as of late.
Is a Dillard's REIT a good idea? If so, how come we haven't seen more of this from retailers.
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