The pandemic has battered actual property funding trusts that target retail shops, with Bank of America Corp. analysts calling the second quarter the hardest ever for landlords within the trendy period of REITs.Earlier than the outbreak of Covid-19, retailer closings had been operating at a slower tempo than in 2019 — however now they’ve nearly eclipsed final yr’s complete with nonetheless greater than 4 months to go in 2020, the analysts stated Thursday in a analysis report. The 9,544 of closures that Bank of America has tallied this yr compares with 9,670 in all of 2019.The bounce in shuttered shops is weighing on actual property investments tied to malls and strip facilities. Even with hire collections ticking up final month, mall REITs misplaced 11.6 p.c within the third quarter via August 19, the report exhibits, whereas strip REITs tumbled 10.three p.c.“Accelerated bankruptcies and store closings will still push occupancy lower into 2021,” the Bank of America analysts stated within the report. “While near term investor focus is on rent collection, we look to leasing activity as a signpost of normalizing conditions.” Ascena Retail Group, Barnes & Noble, the Hole, Macy’s, and Workplace Depot are actually on Bank of America’s high tenant watch listing for retail REITs on account of their higher danger of retailer closings. PetSmart, PETCO Animal Provides, Staples, J.C. Penney Co., L Manufacturers, and Neiman Marcus are additionally on look ahead to REIT managers.“In the first roughly eight months of 2020, the largest store closing announcements have come from Ascena and GNC,” the analysts wrote. “The bigger impact will be felt from Ascena store closings given the smaller size of an average GNC location (1,200 square feet).”JCPenney, the enduring U.S. clothes and residential furnishing chain that filed for chapter safety in May, has led division retailer closings this yr based mostly on sq. footage, in line with the report. The analysts stated about 40 main retailers have filed for chapter in 2020, greater than doubling final yr’s complete.[II Deep Dive: Pensions Are Making Riskier Real Estate Bets] The second quarter was “without a doubt the toughest quarter retail REIT landlords have faced in the modern REIT era,” they wrote within the report. Nonetheless, the analysts pointed to bettering hire collections in July and “encouraging leasing activity” at strip facilities in the course of the second quarter.“Mall REIT management teams are facing a much more uphill battle,” they stated, “but we are particularly encouraged by MAC’s leasing pipeline.” MAC is the stock ticker for Macerich, which says on its web site that its portfolio includes “trophy properties in the most desirable, densely populated and highest-barrier-to-entry U.S. markets.” Bank of America analysts have a impartial ranking on the REIT.Of their report, they beneficial “higher quality portfolios,” with “buy” rankings on U.S. REITs together with Acadia Realty Belief, Kimco Realty, Regency Facilities Corp. and Weingarten Realty Buyers.