Few Bargains in Retail REITs

The disappointments from retailers piled up fast last week, but any possible slowdown in consumer spending won't affect mall REITs as much as some investors might imagine. Extended valuations are a bigger concern.

Wall Street is understandably worried that expensive gas prices and rising interest rates are slowing down consumer spending. Wal-Mart(WMT Quote) added fuel to the fire when it blamed high gas prices for lackluster spending from its low-income shoppers. Other disappointments last week came from The Gap Stores (GPS Quote), The Limited (LTD Quote) and Hot Topic (HOTT Quote).

However, J.C. Penney(JCP Quote) and Nordstrom(JWN Quote) both reported strong sales and earnings that beat Wall Street estimates, showing that consumers are still flocking to certain mall tenants. ...