Malls are losing tenants to open air shopping centers like the CBL property, Fremaux Town Center in Slidell, La.

Retailers opting to relocate to open air shopping centers from second tier malls will have a two-fold impact on commercial mortgage backed securities, according to Fitch Ratings

CMBS backed by malls that lose tenants to open air centers will see reduced cashflows, while those backed by the open air shopping centers will see an improvement, the rating agency said in a report published Wednesday.

The report states that the trend of “off-malling” for traditional in-line mall tenants could weaken the credit profiles of retail REIT landlords with sizeable second-tier mall holdings, such as Washington Prime Group, Inc. and CBL & Associates, Inc. The REITs “own a meaningful number of the lower-producing malls in CMBS conduits,” stated the report.

On the other hand, the trend would boost performance for groups such as Brixmor Property Group and Kimco Realty Corp., two of the largest outdoor shopping center owners in the U.S.  Both companies “noted greater interest in their centers from traditional mall tenants during the companies' third-quarter 2014 earnings conference calls,” the report states.

Fitch believes that rental rates at shopping centers may look more attractive compared to mall rental rates. "We believe that recent mall REIT spinoffs are the catalyst that has caused some retailers to consider nonmall locations to a greater extent," the report states.

Fitch stated in the report that mall tenants that are most actively considering (re)locating in shopping centers  include The Gap, Banana Republic, American Eagle, Chico's, Christopher & Banks and Torrid, as well as a handful of jewelry stores.

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