MORE MILLS MYSTERY

Implications: Gazit-Globe, an Israeli real estate investment firm controlled by Mr. Chaim Katzman (the outgoing CEO of the Equity One REIT), has acquired 9% of the Mills stock. He has also offered to invest an additional $1.2 billion to recapitalize the company.

Although the entire transaction raises more questions than answers, it has again forced Mills back into the spotlight at a critical point in their efforts to both satisfy the SEC and New York Stock Exchange.

Analysis: To most observers who have been following the Mills saga, this latest twist is but a speed bump. My opinion is that Mr. Katzman is not smarter than some of the best and brightest of the CEO's of United States REITs. What ever his game plan might be, it will not be as successful as the plans already in place by those prospective bidders who completed their due diligence some months ago and decided not to bid.

The Mills portfolio has not improved since the final bid date. Several of the previously announced deals that supposedly would "save" Mills have not materialized. Some of the deals -in -progress have been adversely impacted by events beyond their control (i.e. Block 37 on Chicago's State Street has serious new competition as the result of Carson's being converted to a new retail complex), and several of Mills' key employees have jumped ship.

Over the years I have seen instances of foreign investors inserting themselves into our industry and in effect saying "I can do better than the best minds in the American real estate industry". Not one has turned out to be correct. In fact, the only one who has proven to be successful is Westfield.  They are the only one who has had the patience to hire top people from our industry and gradually build a business based solely on well established principals developed in this country over years of trial and error.