A RECORD SETTING EVENT

Implications: Pyramid is for sale.

Pyramid is one of the very last of the high quality, sizable portfolios of regional malls in private hands.

Speculation is building over who will enter and/or win this exciting new auction.
Interest is so high that several Hedge Funds are reportedly circling the battlegrounds. 

Analysis: Bob Congel, the holder of the controlling interest in the Pyramid Malls, has finally decided to take advantage of the highest valuations of regional malls in the history of the industry. I predict that his portfolio will sell for the highest price per square foot ever.

This is a perfect example of how the "feeding frenzy" that has taken place in the mall REITs has driven up prices. Pyramids malls are very good malls. However they are not of the same quality or able to generate the same sales per square foot as some recent portfolios such as the Rouse package bought recently by GGP for $12 billion or the Westcor package of 15.6 million square feet bought by Macerich for $1.5 billion.

In my opinion it more closely resembles the Wilmorite package of 13.4 million square feet Macerich acquired in 2004 for $2.333 billion.

However, simply because the mall REITs are loaded with cash and hungry for deals, this 18 million square feet of 19 malls, most of which are located in upstate New York and environs, is now expected to fetch as much as $4 BILLION!

In my opinion the speculation about some hedge fund or other type of private equity player outbidding the likes of Simon or GGP, is just plain silly.