Commercial Real Estate Finance

Posts Tagged ‘Simon Property Group’

Forbes will publish a list of anything these days.

Still, I thought this was an interesting one: America’s Most Trustworthy Companies. The list includes both mid-cap and large-cap corporations in a wide array of industries. What is more, points out REIT.com, this list includes some of America’s largest real estate investment trusts. From an article published this month on NAREIT’s REIT.com, here are the Top 9 Most Trustworthy REITs in the U.S.:

• Essex Property Trust
• Kimco Realty Corp.
• Realty Income Corp.
• American Campus Communities
• Brandywine Realty Trust
• BRE Properties
• Government Properties Income Trust
• Highwoods Properties
• Post Properties

These are in no particular order, although it’s worth noting the first three REITs were included in Forbes’ “large-cap” section, the other six in the “mid-cap” category. Read the rest of this entry »

Look on the bright side. Even though the Great Recession led to enormous bankruptcies, high unemployment, depressed asset values, an epidemic of foreclosures, the imminent threat of total financial collapse, and general misery–it  wasn’t all bad.

I could have phrased that better.

What I mean to say is it made things affordable again. If you were looking to buy real estate at a great bargain, 2009 was the time. Of course, no one was spending money in 2009.

After the economy went berserk,  a few people jumped into commercial real estate investment–where there were any opportunities to be found–and profited greatly. Many U.S. CRE markets and asset types have rebounded much faster than other industries, and this success is beginning to make this “alternative” investment sector a top choice for many. Just look at REITs–giant firms becoming even larger thanks to a constant stream of new investment capital.

As certain markets transition from “recovery mode” to “growth mode,” however, the availability of inexpensive opportunities with strong  potential for yield is dwindling. We see this in lowering cap rates (especially for multifamily) and the swelling price of shares in publicly traded REITs. In the U.S, many CRE opportunities are preferable for the risk-averse, those seeking stability over returns.

But where does one go when looking for yield? Michael Hudgins, a strategist for JP Morgan (NYSE: JPM), recommends foreign REIT investment. Mr. Hudgins tells Barron’s, Read the rest of this entry »

Thankfully, I don’t fly nearly as often as I used to. I’m okay with flying–it’s the airports I have a problem with. No matter how uncomfortable a four-hour flight on Southwest may be, it’s still preferable to the endless, serpentine Security line.

Though waiting and finally getting through the metal detectors is rarely an airport highlight, I can think of one group of people who are extremely grateful for the work the TSA does (no matter how many water bottles and toenail clippers the TSA confiscates). That group is the retail sector.

After all, the TSA keeps airline passengers captive until (hours later) their plane finally begins boarding. For retailers, few things are more desirable than a captive audience. Where but airports (okay, and movie theaters, and theme parks) can you find sodas selling for $5 apiece?

While the freedom to charge exorbitant prices for simple comestibles provides a great advantage for companies that operate airport terminal retail, it hasn’t caused these operators to become complacent. In fact, some are now working to emulate the strategies of North America’s most successful, high-end shopping malls, bringing in the sort of luxury retail associated with Fifth Avenue.  Read the rest of this entry »

In the mid-90s, the King of Prussia Mall outside Philadelphia underwent an incredible transformation.

Its owners, including Kravco and Simon Property Group (NYSE: SPG), renovated and expanded the mall, connecting its two sections (the Court and the Plaza) to turn KOP into one of the largest shopping malls in the U.S. More importantly, the mall saw a huge influx of specialized, boutique and brand-name merchants, as well as higher-end anchor tenants like Nordstrom and Neiman Marcus. Suddenly, King of Prussia was no longer a mall; for the region’s shoppers, King of Prussia was THE Mall.

The enormous growth that turned King of Prussia (now majority-owned by Simon Properties) into a retail mecca was something that occurred throughout the country–a culmination of the 80s’ unbridled consumerism and emphasis of the shopping mall “experience.”

Today, e-commerce is crushing many community malls and power centers, and even the highest-end regional malls (KOP included) aren’t drawing shoppers the way they once did. But the “mega-mall” as we knew it in the 90s hasn’t gone away, but simply migrated to other countries.

Like Russia.  Read the rest of this entry »

From Retail-Insider.com, a Canadian retail news site, here is a ranking of the

Top 10 Best-Performing Shopping Malls in North America:

(Note: Each mall’s activity is measured in sales per leasable square foot)

10. Rideau Centre, Ottawa ON Canada: $1020/sq ft

9. Mall at Millenia, Orlando FL USA: $1040/sq ft

8. Mall at Short Hills, Short Hills NJ USA: $1050/sq ft

7. Chinook Centre, Calgary AB Canada: $1055/sq ft

6. Oakridge Shopping Centre, Vancouver BC Canada: $1200/sq ft

With the possible exceptions of Dunder Mifflin and the venerable anvils-and-explosives conglomerate Acme Corp., Geroge Costanza’s Vandelay Industries may be one of the most successful and renowned of fake TV show corporations. Seinfeld’s Constanza invented the import/export firm Vandelay Industries and its namesake, Art Vandelay, to spice up his resume,  but his creation has since become a fairly profitable brand–at least for novelty t-shirt vendors, where Vandelay Industries shirts remain popular years since the show ended.

And why do I bring up Vandelay Industries? Because today we’re talking about importing and exporting. Also because blog posts are better with 90s TV show references.

Vandelay specializes in the import/export of “latex-related” products, but I want to talk about the international give-and-take that influences two other, much more valuable commodities: investment capital and the strategies that go with it.

How’s that for a transition? Seamless. Read the rest of this entry »

Straight from Standard & Poor’s U.S. REIT Index, here is a ranking of the Top 10 Largest REITs by Market Cap. If you’re familiar with the world of real estate investment, I’m sure all of these names will be quite familiar.

10. Health Care REIT, Inc. (NYSE: HCN) 

We talk a lot about REITs here, and I don’t think it’s only because the U.S. REIT market has been performing so well in the last few years (though that’s part of it, of course). I think part of my interest in this investment structure is due to REITs’ great variety in terms of size, asset specialties, and overall strategy. Of course, as other nations update their tax policies, we’re sure to see many variations and newcomers in the REIT market in coming years. Especially if these investment vehicles continue to offer steady returns.

What all REITs have in common is their status as pass-through entities, avoiding the tax liabilities of other corporations. Additionally, these firms are more closely regulated and their risk-exposure kept in check, meaning REITs were able to weather the financial downturn better than their over-leveraged peers. Finally, they’re big, allowing them to pursue acquisitions and other opportunities out of most investors’ reach.

I associate REITs with enormous portfolios. Simon Property Group (NYSE: SPG)–the retail super-REIT–holds over $20 billion in assets and owns or holds an interest in about a quarter-billion square feet of real estate world wide. That’s a big REIT.

But most are much smaller, and some are even so small (“small” being a relative term here) that they comprise only a handful of properties.

Read the rest of this entry »

Mensch:

Noun, informal. A decent, upright, mature and responsible person.

Schlemiel:

Noun, slang. An awkward, clumsy, or unlucky person whose endeavors tend to fail; a loser.

Mensch of the Week: 

John Stephenson, Jr.

Atlanta Hall Management

For his work in bringing highly coveted investment dollars–which will lead to highly coveted tourist dollars for the city of Atlanta–John Stephenson is our Mensch of the Week. Mr. Stephenson (on the right) is the interim CEO of Atlanta Hall Management, the firm working to develop the College Football Hall of Fame in Atlanta.

One would be hard pressed to find a place in America where college football isn’t popular, and it would be harder still to locate a city that wasn’t attracted to the idea of establishing such a high-profile,  national tourist attraction. Clearly, it’s taken a great deal of planning and revision to make the Atlanta-based Hall of Fame a reality, and its development (expected to begin this year) will result in a much-needed driver for the city (whose CRE activity, some have said, tends to lag behind metros of similar size and status).

Atlanta Business Chronicle explains: Read the rest of this entry »

Week in Review for September 22 – 28:

- As publicly traded multifamily REITs reach record values, Lehman Brothers Holdings prepares to offer its Archstone apartment firm in an IPO. Analysts predict the offering may raise between $3 billion and $4 billion, which would make it the largest REIT IPO to date. However, Bloomberg reports apartment REITs have seen a decline in value since August.

- The Hershey Co. officially opens its new $300 million, 340, 000 SF chocolate factory near its original facility in Hershey, PA. This facility’s development, CoStar Group reports, was one of the largest Pennsylvania construction projects in two decades.

- In nearby York, PA, the Lightstone Groups sells the 742,000 SF West Manchester Mall to M&R Investors for $17.5 million (under $24/SF). Around a third of the mall’s leasable space is vacant, and the new owners plan to redevelop the property.

- Portfolio manager Matthew Werner discusses REIT investment and diversification strategies with Forbes.

- As consumers seek both brand recognition and affordability, Simon Property Group (NYSE: SPG) invests in luxury outlet shopping.

Read the rest of this entry »