All GLG News Analyses Filed Under: REITs/Operating & Development

From The Folks Who Brought You AAA Rated Mortgage CDOs

July 18, 2009

Analysis by: GLG Expert Contributor

Analysis of:Gray Clouds Persist for Equity REITs Despite Rays of Sunshine | www.pr-inside.com

The credit rating agencies have not distinguished themselves in this bust. The problem might have something to do with the fact that credit is only part of the question when it comes to real estate. This, in turn, may have something to do with the prior success of asset valuation in mortgage risk management. If Fitch has a negative outlook at this point, there are two likelihoods: much more extreme risk, and possibly some selective opportunities.

LANDMARK MALL ARTICLE MISSES THE POINT

July 16, 2009

Analysis by: GLG Expert Contributor

Analysis of:As Owner Struggles, Landmark Mall Languishes | www.washingtonpost.com

The article talks about the issues with Landmark Mall as though it is somehow unique or simply brought on by the current horrific economy. The truth is the fundamental concept of the enclosed regional center has been dying for at least 30 years or more. General Growth and the other enclosed mall developers in the United States have many more challenges than they care to admit.  

Jack KernManaging DirectorKern Investment Research

Landmark Mall Not A Landmark Opportunity

July 10, 2009

Analysis of:As Owner Struggles, Landmark Mall Languishes | www.washingtonpost.com

Landmark Mall in suburban Virginia has been in decline for almost 20 years, as cash strapped GGP milked the center for any operating income they could get. In what was supposed to be a grand vision of future retailing and commercial space, GGP simply waited too long to redevelop the center and now sits on a white elephant, replete with local uses and property tax blight. The site isn't as valuable as the City of Alexandria believes and the area is changing, and not for the benefit of GGP.

Kenneth LeonardPrincipalLeonard Associates

Distortion Wrapped in Misrepresentation Encased in a Lazy Reporter's Bad Writing

July 9, 2009

Analysis of:As Owner Struggles, Landmark Mall Languishes | www.washingtonpost.com

I could not help but bring this article to the attention of the GLG News readers because it is an excellent example of the silliness that surrounds every sick or dying mall. If the reader strips away the inaccuracies this article is not newsworthy or even worth reading. More importantly, it fosters and increases the myth of "the death of the mall".

Jack KernManaging DirectorKern Investment Research

REITs Slow Dance for the Street

June 30, 2009

Analysis of:Multifamily REITs see Underweighting by BOA-Merrill | www.globest.com

The apartment industry is subject to a great deal of coverage, and some of it, justified or not is decidedly negative. As an industry that is subject to great challenges, it also meets property management issues with concessions and no increases at renewal. In many places, the levels of site traffic are down, but submarkets prevail in this business and the downgrading of REIT stocks in multifamily overplays the reality of future rent growth in some markets. Property prices are declining based on in-place rents and so future IRR considerations are vastly more complicated than ever before. With the downgrade of REIT securities, the vast number of shares shorted will be rewarded, but long term, apartments are stable.

Kenneth LeonardPrincipalLeonard Associates

An ugly secret the REITs don't want you to know about

June 12, 2009

Analysis of:Retail landlords need a "reality check" | www.reuters.com

This is the first article I have seen by an industry insider, that blows the whistle on the pending crisis in REIT profits.   The implications are significant in that the reporter only talks about the smaller and/or independent retailers that are struggling to survive in shopping centers across America. The reporter pains a bleak picture of what is happening on a daily basis and what is likely to happen by next January after a deluge of retailers call it quits after lasting through the Christmas season and then closing their doors. If the reporter were to investigate the even more dangerous pending crisis brought on by the rapid departure of anchors, REIT stocks would be revealed to all be in serious danger.

Kenneth LeonardPrincipalLeonard Associates

Another Excellent "Comp"

June 4, 2009

Analysis of:Shopping Centers Anchored by Groceries Hold Drawing Power | online.wsj.com

This package of three "urban" strip centers is rather unique in that these centers are very old but successful and well insulated from nearby competition from the Target and Wal Mart super stores. However they can still provide a good indication of value of high quality grocery anchored strips to guide the GLG reader trying to stay current on the market value of strip center REIT's portfolios. 

Kenneth LeonardPrincipalLeonard Associates

Big News! Survival Of The Fittest Works In Business Too!

May 22, 2009

Analysis of:Recession Turns Malls Into Ghost Towns | online.wsj.com

The average GLG client who follows the shopping center REITs will find nothing new in this oddly placed (first page of the WSJ) article. In fact a close reading of the article reveals that the authors themselves recognize that there is no "new" news to report but expand the article to almost a full page by the time they finish acknowledging that the increase in "dead malls" is simply the result of excessive competition and the reality of too many malls being built, in too many marginal locations, with too many marginal anchor stores, during the periods of cheap money. However, there is something to be gained from this article in that it serves as a reminder that "all malls are not created equal" and "all mall REITs are not created equal".

Kenneth LeonardPrincipalLeonard Associates

An Insult To GGP's Intelligence

May 12, 2009

Analysis of:Creditors hit Ackman's new plan to finance General Growth | www.chicagobusiness.com

By attempting to "fine tune" his earlier offer for GGP's debtor-in-possession (DIP) financing, Mr. William Ackman and his Pershing Square Capital Management firm is once again demonstrating just how much smarter he thinks he is than the GGP Board and the 11 member unsecured creditors committee. By ignoring the obvious conflict of interest problems and the fact that such a move would give him improper control over GGP, Mr. Ackman once again demonstrates his disdain for the intelligence and experience of the management of successful retail oriented companies such as SHLD, Target and GGP.

Kenneth LeonardPrincipalLeonard Associates

An Excellent Leading Indicator For Values Of Troubled Malls

May 7, 2009

Analysis of:Glimcher Sells Mall For $9.5 million Less Than Mortgage | blog.retailtrafficmag.com

This article provides an excellent current "comp sales" figure for all the GLG clients who are grappling with the problem of attempting to place a value on the portfolios of troubled mall REITs such as GGP.

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