By Ian Salisbury
It has been a difficult year for REITs, which means they offer opportunities for yield-seeking investors.
Take a look at Brixmor Property Group, a shopping-mall real estate investment trust with a 4.7% dividend yield. Shares were down 0.4% on Wednesday to $26.25. They have tumbled about 7% since the company reported third-quarter earnings Oct. 27 and are down about 5.9% on the year. Lower prices mean higher dividend yields.
It may be a buying opportunity, according to Goldman Sachs, which added Brixmor to its Conviction List of top stock picks this week.
Goldman analyst Caitlin Burrows attributed the recent selloff to an "underwhelming" profit forecast from Brixmor, which operates more than 360 shopping centers, concentrated in Florida, Texas, Pennsylvania, and New York.
Brixmor's results were otherwise solid. Adjusted funds from operations, the REIT industry's equivalent to operating profit, beat analysts forecasts.
Burrows, who has a target of $32 for Brixmor's stock price, argues the company should benefit from resilient consumer spending and strong demand for space in the open-air/strip-type malls it specializes in. The stock is trading at just 11.5 times its forward funds from operations, below its recent average of 12 times and at a 35% discount to the REIT sector as a whole, she says.
She isn't the only one that is bullish, according to FactSet. Of the 18 sell-side analysts that follow Brixmor, 15 rate it at Buy, and the other three have it at Hold. There are no Sell ratings.
The average price target is $30.67, implying a gain of about 17% from the current price.
One long-term factor could play to Brixmor's advantage: About four-fifths of its rents are from properties anchored by grocery-store tenants. Vacancy rates for retail properties anchored by grocery stores were 3.5% in 2024, the lowest in a decade, according to CFRA, an investment-research firm.
While developers haven't been building many new shopping centers, demand for space in the ones with grocery stores remains strong. That is because even in this era of online shopping, most American families still pile into the car in order to stock up on kitchen essentials such as milk, eggs, and vegetables.
"In 2025, U.S. households averaged approximately six grocery trips per month, with 75% of grocery shopping still occurring in-store, driving spillover visits to the broader center," wrote CFRA's Nathan Schmidt in a recent note.
Write to Ian Salisbury at ian.salisbury@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
November 05, 2025 14:42 ET (19:42 GMT)
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