Where some might see a decline in consumer spending, others are seeing a behavioral shift in how consumers are spending their dollars, given the inability for travel and social experiences over the last couple of years. In this clip from "Ask Us Anything" on Motley Fool Live, recorded on May 31, Motley Fool contributor Tyler Crowe highlights a few retail REITs that have been performing noticeably well amid market volatility.
Tyler Crowe: The other one that defied the common narrative that was interesting was retail real estate investment trusts. Kimco Realty (KIM +1.85%), Realty Income (O +0.70%), Store Capital (STOR +0.00%), people like that. We saw Target (TGT +3.17%) earnings and the huge drop-off after Target earnings. Basically, this idea is that the consumer is exhausted. But if you look at the results from retail REITs, it doesn't seem to be as much the case. Kimco, their funds from operations per share, which is a decent proxy for REITs instead of earnings, theirs was up 18%, Store Capital up 21%. Regency Centers (REG +1.61%) is up 14%. Almost every single company that's in the retail REIT space raised guidance, raised dividends, and was looking at lease spreads versus difference between an old lease and a new lease. All of them were looking at 7-10% range. When we talk about tech, that doesn't sound like a huge increase. But for real estate, those are monumental numbers. It was interesting to me because all of these companies seem to be reacting very positively at a time when many other people were talking about the consumer is taxed out or things like that with companies like Target. I'm just curious. Brian mentioned it with travel, perhaps it's just a shift in the consumer, where for the past two years under COVID, it's been a lot of e-commerce stuff to be brought into your home and perhaps a little bit less pleasure shopping where you're doing for social experience, travel. The things that we have not been able to do as much over the past few years are starting to open up again, and maybe instead of thinking of it as a complete decline in consumer spending, maybe it's just more a shift in how those dollars are being spent.
