Retail spending has dropped in so much in the economic downturn that mall owners are going to the returns desk and dropping off poorly performing properties.

A recent report in The Wall Street Journal highlighted a growing incidence among shopping center real estate investment trusts, or REITs, discontinuing payments on heavily indebted, poorly performing properties to try to force lenders to renegotiate the debt.

Jefferies analyst Omotayo Oskusanya says the strategy is part of a move among mall owning REITs to cull and consolidate their portfolios, and it's a tactic Wall Street really likes.

"It's something we're seeing happen with increasing frequency," he says. "The examples I've seen seem like sound business decisions."

Macerich (MAC), which owns about 80 shopping centers nationwide, last month went into strategic default on the Dallas Valley View mall, stopping payments on the $135 million mortgage. Vornado, one of the largest public REITs, recently stopped payments on an $18 million mortgage on the Cannery at Del Monte Square in San Francisco. Taubman Centers and Simon Properties Group have also done strategic defaults in the last year.

Todd Lukasik, who analyzes REITs for Morningstar, says the payment stoppages are pressure tactics that makes sense. Retail tenants at shopping centers and malls have been hit hard by a dropoff in spending. That s made it tough for big landlords to raise rents, particularly in areas where the housing crunch has hit hardest, such as south Florida, Phoenix and Michigan. Until the last few quarters, tenant retention has been a bigger priority, and now some of their debt seems particularly expensive.

"We've seen it in other [REIT] sectors, particularly in the hotel space, where the threat of sending back the keys on a property was enough to get the lenders to change the financing on them," Lukasik says. "In many cases it s a strategic move."

Unlike individual homeowners, the taint of foreclosure hasn't hurt these mall REITs. In the past year, shares of Macerich are up 51%, Simon shares climbed 42%, Vornado is up 40% and Taubman shares rose 35%.

The S&P 500 is up 2.6% over the same period.

Because REITs must kick back 90% of their income as shareholder dividends, the sector remains appealing, even as the broad market languishes. The National Association of Real Estate Investment Trusts FTSE index was up 15.6% through July 31, and retail property REITs were up 16.4%. Exchange-traded funds that track retail property indexes, such as the iShares FTSE EPRA/NAREIT North America Index fund and the SPDR Dow Jones REIT fund, which include residential and broadly diversified REITs, have outpaced the S&P 500 for the year.

Lukasik says these highly priced shares are no bargain, but they should perform well for current shareholders as the economy makes a halting recovery. He covers Taubman, Simon and Tanger Factory Outlet Centers and says all three "are slightly overvalued," with Simon shares closest to fair market value.

"For most of these names, you're holding them more for the dividend yield on a near-term basis," says Okusanya.

While strategic defaults will likely continue, the REITs that survived the credit crunch will be more assiduous about culling their weakest properties in the future.

"A lot of REITs during the [cheap financing] heyday got addicted to process of not worrying about debt repayment and just refinanced," Lukasik says. That turned out poorly for General Growth Properties, which last April was forced to file for bankruptcy reorganization in the largest real estate bankruptcy in U.S. history.

A recent report from the Congressional Budget Office noted that $2.4 trillion worth of commercial real estate debt maturities will be due by 2014, so the hardball tactics to force individual lenders to refinance will likely increase.

"If you have a route where you can stop losing money on underperforming assets, you'll undoubtedly see more of this," Okusanya says.