SPG

Zacks highlights three REITs with positive earnings surprise potential during Q2 2026 earnings season: Host Hotels & Resorts, Realty Income, and Simon Property Group. All three demonstrate strong fundamentals in their respective sectors (hotels, net lease retail, and shopping centers) with favorable Earnings ESP and Zacks Rank ratings, though headwinds from high interest expenses and tariff pressures are noted.

The retail REIT industry faces headwinds from elevated borrowing costs, inflation, and consumer caution, but benefits from limited new supply and resilient necessity-based tenants. Zacks highlights Simon Property Group, Realty Income, and Tanger as solid stocks to consider, citing strong occupancy rates, healthy leasing activity, and solid liquidity despite the industry ranking in the bottom 27% of Zacks industries.

Macerich (MAC) achieved 94% leased occupancy in June 2026, up from 92% a year earlier, driven by strong retailer demand and premium mall portfolio positioning. The company's Path Forward strategy targets a 6.5% NOI CAGR through 2028, supported by $124M in signed-not-open leases. However, tenant bankruptcies, e-commerce competition, and geographic concentration in select U.S. markets pose ongoing challenges.

With 10-year U.S. Treasury yields at 5.3%, income-focused investors face a choice between secure government bonds and higher-yielding REITs. Recent REIT selloffs have pushed dividend yields to 6-15%, creating potential buying opportunities despite higher risks. The article examines whether investors should lock in Treasury yields or capitalize on depressed REIT valuations for potential capital appreciation.

The Zacks REIT and Equity Trust - Retail industry faces pressure from elevated borrowing costs, inflation, and rising bond yields, which limit acquisitions and development. Consumer caution may weaken discretionary retail demand, while older properties face challenges from selective tenant preferences.

However, limited new supply and resilient necessity-based tenants provide some support. The industry ranks #181 out of 247 Zacks industries with dim near-term prospects, though three stocks are highlighted as solid considerations.