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A Sears mall entrance A Sears in Oxford, AL, one of hundreds that retail chains have slated for closing over the next few months. (Photo courtesy of Quintard Mall)

CLEVELAND—Retail REITs’ steady stride is likely to be broken by the wave of tenant bankruptcies and planned closings, according to analysts at RBC Capital Markets. “It’s too early to say just how extensive the store closings might be, and, in most cases, we expect the REITs will simply re-tenant lost space at higher rents,” write RBC analysts Rich Moore and James Bambrick, based in Cleveland. “Nonetheless, the unexpected closings are likely to dampen operating metrics near term.”

First-quarter reports from the retail REITs covered by RBC analysts were broadly in line with expectations. Same-store NOI growth, occupancy, leasing spreads, average base rent—all were “generally sound and typically improving.” Even tenant sales appeared to be steady.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.

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