The Changing REIT Landscape

As customer preference continues to skew toward online purchases, brick-and-mortar stores continue to feel the impact. The competition can come from online-only rivals or from traditional retailers ramping up their e-commerce platform—including competition from a brick-and-mortar store’s own online presence.

Regardless of whether an individual retailer comes out ahead after multi-channel sales are combined, it certainly has an effect for real estate investment trusts (REITs) investors. 2017 brought with it many notable department store closings around the country, from Sears to Macy’s to Dillard’s. However, these stores are closing in B- and C-tier malls—not across the board. That’s important to note because I believe A-tier mall property owners still present opportunity in the REITs space. We’re being very selective in choosing where to invest headed into 2018, and I see a bright year on the horizon.

I also see REITs benefiting this year from tax reform, both in the short-term and the long-term—specifically rental properties. Watch the four-minute video above for more insight into what’s driving my thought process as I lead the charge for locating opportunity in the next 12 months.

The opinions expressed are those of Steve Brown and are no guarantee of the future performance of any American Century Investments fund.

References to specific securities are for illustrative purposes only, and are not intended as recommendations to purchase or sell securities. Opinions and estimates offered constitute our judgment and, along with other portfolio data, are subject to change without notice.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.