NEW YORK ( TheStreet) -- Looking at the second-quarter results reported for most retail real estate investment trusts, the "brick and mortar" model is alive and well.
Clearly consumers are embracing social media such as Facebook (FB) and Twitter but they are also continuing to utilize the traditional retail storefront experience. It's quite clear that the combination of the two -- or the multi-modal shopping model -- has created an integrated merchandising experience where e-commerce serves as a secondary storefront.
Some have argued that the primary storefront -- the "brick and mortar" model -- is a dying breed. However, consumers are continuing to exploit the evolutionary combination of both e-commerce and "brick and mortar," an experience that complements rather than competes.
During the second quarter all retail REITs that I follow have reported increased occupancy and most have reported increased earnings, as measured by Funds from Operations, or "FFO", a standard REIT metric. Also, most retail REITs have reported increased "Same Store NOI" and that simply means that this metric allows investors to compare net operating income growth from existing properties that have been open for longer than one year.In the shopping center sector, Kimco Realty (KIM - Get Report), the largest shopping center REIT in the nation, and Retail Opportunity Investment Corporation (ROIC - Get Report), a West Coast REIT, have outperformed the peer group. Kimco, with a market cap of around $9.216 billion, crushed the latest quarter results with an FFO gain of around 12.9%. Retail Opportunity, with a market cap of around $980 million, also delivered exceptional second quarter results with a spike in FFO of 11.7%. The mall REITs also turned in sound results and two of the top quarterly performers were Simon Property Group (SPG - Get Report) and Tanger Factory Outlets (SKT - Get Report). Simon, with a market cap of $48.9 billion, had an exceptional quarter as evidenced by a 11.6% jump in FFO and a 5.9% increase in same-store NOI. Tanger, the only "pure play" outlet REIT, saw FFO increase by 10.3% and same-store NOI grew by 4.5%. Overall, the retail REITs are continuing to demonstrate very strong operating fundamentals and most are seeing occupancy level improvement, evidence that consumers are embracing the traditional "brick and mortar" model. Next week I will report on the growing Triple Net REIT sector as earnings will be released this week for American Realty Capital Properties (ARCP) and Cole Real Estate Investments (COLE). At the time of publication the author had no position in any of the stocks mentioned. Follow @swan_investor This article was written by an independent contributor, separate from TheStreet's regular news coverage.