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

Multi-family REIT's

March 16, 2009

Analysis by: GLG Expert Contributor

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

As a current COO of aClearwater based General Contractor specializing in multi-family renovations I believe that REIT's will have a extremely hard time renovating apartments due to declining abilities to generate additional rent increases to offset the Capital expenditures to upgrade interior/exterior of properties. All majorREIT's such as Equity,United Dominion,Waterton, and others have pulled back Capital dollars for 2009.

General Questions And General Answers

March 16, 2009

Analysis by: GLG Expert Contributor

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

General questions and general answers are the substance of astrology. There is such a wide variety of REITs that a generality has little meaning. The one general thing about REITs is that each company has a strategy and execution.

Kenneth LeonardPrincipalLeonard Associates

They Continue To Miss The Obvious

March 16, 2009

Analysis of:Real estate stocks: It may still be too early to buy | www.usatoday.com

By blaming the recent decline in stock value almost entirely on the current recession, the reporter has taken the "brainless" approach to filling his required space for the day. The only  items worth highlighting is the fact that the reporter took the time to report on the calculations of the SNL U.S. REIT equity indexindicating that REITs are now 40% below the companies projected asset values and that most REITs used borrowed money to bid the prices of their acquisitions well above the market.

Kenneth LeonardPrincipalLeonard Associates

Lampert no match for Buffet

March 16, 2009

Analysis of:Heavy Discounting Hits Sears Profit, Raising Doubts About Revival Effort | online.wsj.com

Although the WSJ reporter was much too polite to totally trash Mr. Lampert's efforts to revive the ailing SHLD and went overboard in his efforts to find something nice to say in his analysis of Mr. Lampert's "Buffet-like" letter to his stockholders, it should be obvious to even the most faithful GLG believers in the Lampert genius that his luster is worn off and the "king has no clothes". This article and the many others that came out immediately after Eddie's letter hit the wires, clearly demonstrate that Mr. Lampert's self aggrandizing comparisons to Mr. Buffet, (or at least his self appointed role as heir apparent to the title of resident financial genius) has lost all creditability.  I for one, would like to see all future comparisons put to rest. I would go so far as to promise never to question Mr. Lampert's genius ever again if Mr. Lampert so much as demonstrates he is capable of producing one quarter of increased sales and profits any time in the next three years!

Jack KernManaging DirectorKern Investment Research

Riding REITs Runs Risk

March 16, 2009

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

REITs, particularly the ones noted in the Money.cnn.com (c) article have had a pretty good run, but there is the same potential risk and variability in buying these indices and shares as in other sectors. Real estate, and all of their types are sometimes in favor and sometimes not. Like anything else, buying the funds the magazine recommends is not always the best approach. Anyone buying stocks based on a magazine's recommendation might want to look at a bridge I have for sale in Brooklyn.

JREITs supported while Japan RE companies continue to fail

March 4, 2009

Analysis by: GLG Expert Contributor

Analysis of:Japan’s real-estate sector under pressure | www.ft.com

Recently regulators have begun intervention in the JREIT market by directing asset managers to remember their fiduciary duty and not sell assets at a discount. They back this up by monitoring banks and no longer allowing panicky refusal to refinance debt to these low-levered vehicles, which is what caused the NCRI issue. They argue that there was no reason for NCRI to need to file for civil rehabilitation.   Vulture investors flocking to Japan for distressed asset deals may be surprised not be able to find them in the JREIT market - except for their stock shares. The pricing of NCRI may also surprise, as the Japan Development Bank is also participating in the bid.  But opportunities continue to arise in the real estate market. Developers unable to sell to REITs and construction companies building it all continue to file for bankruptcy. The NPL game is starting over again, but the best assets are still tightly owned by the large Japanese corps, conglomerates, and JREITs.

Kenneth LeonardPrincipalLeonard Associates

Impairment Is Only The First Shoe To Drop

February 25, 2009

Analysis of:Impairment Charges Hammer Shopping Center REITs In The Fourth Quarter | retailtrafficmag.com

This article is basically just a listing of the lackluster results turned in by the 11 Shopping Center REITs reporting on their fourth quarter results. The reporter makes a feeble attempt to justify the decline by noting that almost all REITs mentioned that they blame "Impairment" relating to abandoned projects, aborted deals and declining land values. It is interesting to note that not one of the REITs blamed what I think is the real reason behind their poor performance, the increased competition that has forced the marginal retailers in their centers to go dark. This is also the same reason that is going to explain the continued decline in performance during the next few quarters.

Kenneth LeonardPrincipalLeonard Associates

It Shouldn't Take A Recession To Do The Right Thing

February 23, 2009

Analysis of:Westfield to Cut U.S. Mall Hours to Help Retailers | www.bloomberg.com

Now that SPG and Westfield have announced shorter Mall hour, we can expect to see almost every mall in America follow suit.  There is no single change in mall operating conditions that will have as profound and beneficial affect on retailer's bottom lines as the simple act of finally recognizing what has been obvious for many years, shorter hours saves money. The real question behind the headlines is "what has taken Mall REITs so long to make this happen"?

Brooks MendellPresidentForisk Consulting

Timber REITs: Debt Burdens Remain

January 19, 2009

Analysis of:Wash-based Potlatch Sells Timberland in Arkansas | news.moneycentral.msn.com

Potlatch's recent sale of timberland in Arkansas highlight two issues relevant to investors of publicly-traded that currently own timberlands (timber REITs) or formerly owned timberlands (forest industry C-corps).  First, industry-wide debt levels became sharply and increasingly burdensome with this period of minimal demand in housing-dependent end use markets (lumber, plywood, etc).  Two, timberlands provide firms with a relatively liquid asset that can supply cash on a near term basis.  Those firms with substantive debt that divested their timberland portfolios eliminated a ready option in this period of financial distress.

Kenneth LeonardPrincipalLeonard Associates

An Excellent Leading Indicator For Values Of Troubled Malls

January 12, 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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