The stock market was modestly higher on Tuesday, but retail operators were a standout. Site Centers (NYSE: SITC), formerly known as DDR Corp, was higher by nearly 14% at 3 p.m. EDT.
Other real estate investment trusts were higher as well. Outlet mall REIT Tanger Factory Outlet Centers (NYSE:SKT) and mixed-use center REIT Seritage Growth Properties (NYSE:SRG) were both 5% higher on the day. But Site Centers appears to be the biggest mover.
In a newly released investor presentation, Site Centers reports that 77% of its tenants are now open for business, up from just 32% on April 5. And while the company only collected 57% of its expected rent in April and May, this should pick up significantly in June and beyond.
The general move higher in retail REITs is fueled by positive developments related to the reopening of the U.S. economy. All 50 states have at least started to reopen, and many are in advanced stages of reopening. And while COVID-19 cases have increased slightly in some of these places, we aren't seeing any massive spikes like many people had feared. In fact, the overall new case numbers are continuing to trend downward, according to Johns Hopkins.
Furthermore, consumer-spending data has been strong; May's consumer-confidence data came in much higher than expected; and several retail REITs have reported stronger-than-anticipated rent-collection data.
Site Centers and other retail REITs are moving higher (and rightfully so) as the recent data indicates that the economy is reopening as quick or even faster than hoped. And consumer demand looks quite strong. While it's too early to know if the good news will continue, retail REITs like Site Centers could certainly continue to move higher if it does.