Jerry Reichelscheimer, Chair of the Retail Leasing and Development Practice, spoke to National Real Estate Investor about his outlook for REITs centered around grocery stores, amid the COVID-19 outbreak. As Americans go to grocery stores to stock up on essentials, foot traffic has soared. According to National Real Estate Investor, traffic increased 36 to 40 percent at some national grocery store chains during the two-day period of March 13 through 15, compared to the same time last year. Reichelscheimer noted grocery stores can provide a reliable stream of revenue to REITs, but they must learn to adapt to quickly evolving situations, such as the ongoing COVID-19 outbreak.
“Although a grocery store might not be as attractive as an Apple store or otherwise produce the same high rental stream as some of the more flashy retail tenants, it is a steady revenue source,” Reichelscheimer said. “The grocery chain needs to be very flexible, able to move and change quickly, and have the economic background to withstand disruptions to their stores. A weak grocery store chain that doesn’t have vision is just as vulnerable as other retailers.”