Forefront Communications

SNL Financial: Class A Mall Operators Suffering Foot Traffic Slump – Thasos Data

Forefront

Mark Dowd

Mark Dowd

Foot traffic at U.S. malls is down, even among class A mall operators, contrary to recent statements from management, new data shows.

According to data intelligence firm Thasos Group, foot traffic declined 5.4% year over year on a rolling quarterly basis through May 2017 at Simon Property Group Inc.-owned malls; dropped 5.7% at GGP Inc. properties; and declined 6.2% at Taubman Centers Inc. properties. Thasos aggregates and analyzes real -time location data from mobile phones worldwide to produce insights on business, market and economic performance for hedge fund clients.

The findings contradict some REIT management teams’ comments on recent earnings calls about stable or increasing foot traffic, as well as the conventional wisdom that higher-quality properties will thrive even in turbulent times.

Foot traffic at Macerich Co. properties was slightly negative on a quarterly year-over-year basis through May. On a monthly year-over-year basis, the company’s Santa Monica Place property saw traffic up about 40% through March and about 15% through May. CEO Art Coppola attributed that jump to the recent arrival of mass transit.

Class A mall properties on the whole, according to Thasos, have seen traffic drop about 3% on a monthly year-over-year basis through May, compared to average declines of between roughly 6% and 5% for class B and class C malls, respectively, on the same basis. The data firm also noted that the presence of “high-tech” stores like Apple and Tesla had no effect on traffic patterns at class A malls, and traffic was weaker at class A properties with “destination” restaurants like Cheesecake Factory and P.F. Chang’s. 2017

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