U.S. Retail/Net Lease REITs "Sole Searching - June 2026" Goldsmith

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U.S. Retail/Net Lease REITs "Sole Searching - June 2026" Goldsmith

with KIM having the largest (~5 stores), UE (~3 stores), SPG (~2 stores), and BRX

(~1 store). The Triple Net REITs have much larger exposure, led by O (~168 stores),

BNL (~18 stores), and FCPT (~17 stores) per CoStar. Despite improving traffic

trends, landlords continue to actively reduce exposure to the tenant. BNL noted on

its 4Q25 earnings call that it reduced its Red Lobster exposure from 25 stores to 18

stores and is actively seeking to further lower its concentration. In our view, the

improvement in foot traffic is an encouraging sign for tenant health; however, the

ongoing disposition activity by landlords suggests that portfolio management

decisions continue to be driven by risk reduction and tenant concentration

considerations, rather than solely by near-term operating performance.

Digging deeper into notable tenants

We also examined several tenants outside our formal watch list that warrant attention

due to recent operating trends and potential implications for landlord portfolio quality.

David's Bridal: We continue to monitor David's Bridal following its second

bankruptcy filing in five years in April 2023. Traffic trends remain under pressure,

with June T3M foot traffic declining 13.9% y/y. While performance remains weak,

traffic improved modestly relative to the prior period, with June T3M growth

accelerating by 280 bps versus the previous trailing three-month period.

At Home: Although At Home emerged from bankruptcy at the end of 2025, the

retailer remains a focus for several landlords. Notably, NNN highlighted the tenant

as a watch-list name during its 4Q25 earnings call. June T3M foot traffic declined

13.9% y/y, suggesting operating fundamentals remain pressured despite the