Mills is a Clearer Picture Now.

Implications: A lot has happened here all of a sudden:  Canada’s Ivanhoe has taken over the offshore developments, the Chicago development has been sold and now Colony Capital has removed the Xanadu property from the Mills table.  Mills announced that sales for the last 12 were $ 392 per sq. ft. versus $376 for the previous 12.  In my mind that puts the portfolio at an average “C” quality when compared which the Mall REIT’s.  Simon is operating at an average $ 474 per sq. ft. and the last General Growth numbers I saw were at or around $ 450.  General Growth’s numbers are reduced by the Price portion of the portfolio which operates at lower numbers in smaller Western U.S. communities.  Occupancy for Mills now stands at 87 + %, up marginally from a year ago.

Analysis: Mills seems to be a lot more definable and manageable now.  I believe the problem is to reinvigorate the properties to compete against the newly awakened department store chains and the malls they anchor.  Nordstrom is still flying and now expanding at a greater clip.  Macy’s is really formidable now and its private brands are established.  J.C. Penney is a competitor again.  Sears is doing better too.  Now a new management is going to have a clean business plan to put into operation at Mills.  A change of focus from development to operations should kick it up here.  New investors are in the fold and I believe others may be lurking too.  I look for big improvements when they get it going next year.