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

Kenneth LeonardPrincipalLeonard Associates

Strike Three For Ackman

May 7, 2009

Analysis of:Ackman Out as General Growth Interim Lender | www.chicagorealestatedaily.com

William Ackman, fresh from being shown the door by Sears and Target for his greedy over reaching attempt to enrich himself at the expense of both companies long term health, has now been shown the door by GGP for the same reasons.

Kenneth LeonardPrincipalLeonard Associates

Competition Trumps Recession

May 6, 2009

Analysis of:When Good Assets Go Bad | retailtrafficmag.com

Although this article was written ostensibly as a promotional piece for the virtues of auctioning off defunct shopping centers, it can serve as an object lesson for GLG readers interested in how seemingly solid assets can turn into dust within less than a year.

Kenneth LeonardPrincipalLeonard Associates

Mall REITs Are A Lagging Indicator

May 6, 2009

Analysis of:Helped By Lower Expectations, Mall REITs Outperform In First Quarter | retailtrafficmag.com

The six mall REITs that have reported their first quarter results have all surprised the financial community by performing better than expected. This GLG "Leader" says "so what"? When reporters report about financial expectations being exceeded, they are merely demonstrating their lack of industry understanding. Historically the mall REIT industry has been a lagging indicator and especially under this recessionary climate with so many store closings are being announced, it is very easy to make naive assumptions without understanding how mall lease commitments actually work. To those of us in the industry, this is a nonevent. However, to the GLG News reader/Client who is interested in this business sector, there are some important "hidden" messages contained in this article.

Kenneth LeonardPrincipalLeonard Associates

Fitch Doesn't Know The Half Of It

April 23, 2009

Analysis of:Fitch Lowers Outlook On General Growth CMBS | www.chicagobusiness.com

Fitch obviously does not have shopping center specialists on its staff as witnessed by the belated yet mild change to their rating of GGP. If they had asked an industry specialist, they would have realized that the entire debt burden of GGP is so far underwater that by the time CMBS problem is addressed, there may be little, if anything left.

Kenneth LeonardPrincipalLeonard Associates

Overpriced + Overleveraged = Overcome

April 16, 2009

Analysis of:General Growth Files For Bankruptcy Protection | www.chicagorealestatedaily.com

To the surprise of no one, it was finally announced that GGP was unable to refinance its' debt and accepted the inevitable. The major implication for GLG News readers will come in the months ahead when the first few properties are sold at auction and the hedge fund analysts will finally have a specific indicator of the current value of the portfolio of the major Mall REITs.

Kenneth LeonardPrincipalLeonard Associates

GGP's Vegas Gamble

April 14, 2009

Analysis of:Pressure Mounts On General Growth | online.wsj.com

After a quick review of all the recent articles in the trade publications as well as the major business papers, I have yet to see a proper explanation and focused examination of the real reasons for GGP's current difficulty. GLG readers can now say "they heard it here first".

Kenneth LeonardPrincipalLeonard Associates

Indigestion Follows Overeating

April 7, 2009

Analysis of:Bon-Ton followed numbers after acquisition | www.jsonline.com

Bon-Ton is a classic example of what happens when a healthy Goldfish tries desperately to swallow a sick Lake Trout. First Bon-Ton, a small, moderately priced department store chain serving mostly small Pennsylvania towns, acquired a chain of small, moderately priced department stores called Elder-Beerman, serving mostly small Ohio towns. That worked pretty well since there was no overlap and the "fit" was good between the two "neighboring" chains. At the height of the "cheap money feeding frenzy" in 2006, Bon-Ton bought the troubled collection of second rate department stores from Saks. For the most part they were much bigger stores serving large urban areas and offering a more upscale line of goods. Almost immediately the industry noted that a severe case of indigestion had set in.

Kenneth LeonardPrincipalLeonard Associates

Hey Mr. Simon: How Should We Determine Which Malls Should Written Off?

March 23, 2009

Analysis of:David Simon: "Don't Write Off Malls | blog.retailtrafficmag.com

This article quotes the gist of what David Simon , the CEO of SPG, said in his address to the Wharton Leadership Lecture Series. It quite naturally paints a much rosier picture than industry insiders believe. In reality his speech serves as a thinly veiled commercial for the SPG's ability to sell off their underperforming malls to "bigger fools" while buying up the best malls of other troubled mall REITs such as GGP. It says nothing about the proper way to determine which malls should be written off and which malls should not be written off.

Kenneth LeonardPrincipalLeonard Associates

Whatever Happened To Fundamentals ?

March 17, 2009

Analysis of:RETAIL REITs HAVE FURTHER TO FALL as STORES STRUGGLE | www.bloomberg.com

While many of the industry professionals quoted in this article are solid performers in the money management industry, not one of them appear knowledgeable in the shopping center or mall ownership industry. As would be expected in a Bloomberg article that interviews money manager's opinions about stock prices, the entire thrust of the article consist of various unrelated commentary about recent events in the industry and how they relate to measurable changes in certain economic indicators such as unemployment and income. Not one of the comments talked about what is really happening in the industry itself! For example,  not one of the commentators made reference to the impact the growing  number of department store closings will have on most Retail REIT's NOI!

Are REITS Worth It? - Depends Upon What "It" Is (to paraphrase a former President)

March 17, 2009

Analysis by: GLG Expert Contributor

Analysis of:Are REITs worth it? | money.cnn.com

A few selected REITS might still be in play, but only if a clear detailed picture of balance sheets, income statements and detailed cash flows are available and up to date. But it will take a lot of investigative homework to find one now. FFO's by themselves meaningless; and are the stock dividends, in lieu of cash, worth the paper they are printed on? Or merely an IRS compliance formality?

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