Archive for October 2nd, 2008
by David Bodamer October 2nd, 2008
Updated at 2:13 PM
(Crain’s) — General Growth Properties Inc. has come under fire for asking to be included on the short-selling ban list while its executives were dumping shares.
Proxy adviser Glass Lewis & Co., in a note to investors Wednesday, said the Chicago-based mall owner’s action amounted to “rigging the system” and called for General Growth to be removed from the no-short list, according to a report by Bloomberg News.
The short-selling ban was due to expire Friday, but has been extended.
“Since electing to be added to the no-short list of ‘financial’ companies, General insiders have sold $40 million in shares,” wrote Todd Fernandez, a senior research analyst with San Francisco-based Glass Lewis, according to Bloomberg. “We see that as rigging the system and hope General would do shareholders a favor and remove itself from the list.”
This is another piece of bad news for the company. We summed up the issues that have hit the firm in recent weeks yesterday.
As I write this, General Growth’s stock is down 35 percent on the day to $9.46 per share. It bottomed at $8.38 per share earlier today–about $6 below its previous 52-week low.
Update: Bloomberg has more.
Related Topics: Management & Leasing, News, REITs, Retail Real Estate |
by David Bodamer October 2nd, 2008
U.S. retailers’ sales in November and December will be the worst in at least three decades, according to Britt Beemer, whose forecasts for Christmas spending were correct in 16 of the last 17 years.
“What I see happening today is like nothing I’ve seen in my lifetime,” said the 57-year-old chairman of Charleston, South Carolina-based America’s Research Group, which surveys as many as 10,000 consumers a week.
Before the credit crunch and Wall Street turmoil intensified last month, Beemer predicted same-store sales would drop as much as 2 percent in November and December from a year ago. Beemer revised his projection this week to a decline of as much as 4 percent following the bankruptcy of Lehman Brothers Holdings Inc. and moves by U.S. and European governments to prop up weakened banks.
“We’re going to have a lot more spending reductions for Christmas than we could have imagined,” he said in an interview.
Link.
Related Topics: News, Retail |
by David Bodamer October 2nd, 2008
fter failing to find a buyer, Borders Group Inc. on Wednesday was forced to issue warrants to Pershing Square Capital Management LP, potentially giving its largest shareholder even more reason to push the bookseller toward a sale.
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Borders said in March it was exploring a possible sale as part of a larger financial restructuring plan.
According to filings with the Securities and Exchange Commission, if the company didn’t sign an agreement by Wednesday or abandoned its plans, it would have to issue more warrants to Pershing. That arrangement was part of an April deal with Pershing to line up $42.5 million in financing.
Link.
Related Topics: News, Retail |
by David Bodamer October 2nd, 2008
UBS isn’t waiting for the bailout to pass. It’s found a way to move some of its commercial and residential mortgage assets. Terms were not disclosed so there’s no way to know how much the bank marked down its assets or who bought them. But perhaps some of the vulture funds we’ve been hearing about were involved.
Shares of UBS soared 10.5%, or 2.06 Swiss francs ($1.81), to 21.76 Swiss francs ($19.21) on Thursday afternoon in Zurich, after the Swiss bank said it had “substantially reduced” its U.S. commercial and residential mortgage-related assets, mainly through disposals. A spokeswoman for UBS declined to value the size of the disposal or say where the toxic assets had gone.
UBS’s comments on Thursday suggest it could have disposed of up to 10.0 billion Swiss francs ($8.8 billion) of its toxic assets, said Jean Sassus, an analyst at Raymond James Equities in Paris. “This shows that there are buyers out there who we didn’t know about before, which is good news for everyone,” he said.
UBS declined to say whether the assets were going into government or private hands, but Sassus said the most likely situation was that a club of investors, possibly distressed debt funds, had snapped them up.
Related Topics: Finance, International, Investment, News |
by David Bodamer October 2nd, 2008
Grapevine-based GameStop Corp. announced it has acquired Micromania, a French video game retailer that has 332 locations throughout the country. The transaction, worth about $700 million in cash including the assumption of debt, still needs to be cleared by the European Commission and is expected to close in November.
GameStop bought Micromania from L Capital, a private equity fund that was the company’s controlling shareholder. GameStop didn’t have any stores in France, but the Micromania acquisition will put GameStop’s European store count at more than 1,077.
Link.
Related Topics: International, Investment, News, Retail |
by David Bodamer October 2nd, 2008
At The Oaks shopping center in Thousand Oaks, community health education seminars are being presented twice a month by Los Robles Hospital and Medical Center in cooperation with the mall’s owner.
“We thought this might be monthly, but there’s such a great demand for health information, especially in the senior category, we had to go to twice a month,” said Kris Carraway-Bowman, the medical center’s vice president of marketing and public relations.
About 60 to 120 people are in the audience for most of the classes, up from 20 who participated when the sessions began earlier this year at the mall, which is undergoing renovation and expansion.
On a recent morning, a health seminar was under way in the lower-level courtyard as mall construction workers in hard hats sipped coffee, moms pushed strollers, a teen hobbled on crutches and a man talked on his cell phone.
Link.
Related Topics: Management & Leasing, News, Quirky, Retail Real Estate |
by David Bodamer October 2nd, 2008
AP reporter (and frequent Retail Traffic contributor) Lauren Shepherd has an interesting story about how restaurants are negotiating for better terms from landlords. Landlords are pushing back, however.
“Landlords are being fairly aggressive now,” said David Litchman, chief executive of Pockets, a sandwich and salad chain based in Chicago. “Now we’re getting many, many more deals come across the table.”
As gas prices have jumped to record levels and confidence in the economy has tanked among consumers, spending has slowed down and led to lower sales and profits at restaurants and retailers. That’s led to some pain for landlords, because companies have less money to expand.
Meanwhile, lenders have become more cautious on extending credit to restaurant franchisees, further constraining growth in the industry.
With less credit available and a decline in growth overall for restaurants, landlords have been more willing to offer incentives like tenant improvement packages, in which a landlord offers tenants money to improve the property in exchange for a lease.
Some landlords, meanwhile, are keeping rents consistent rather than raising them.
“They’re saying, ‘If we can just hold our own for a year or two, we’ll kind of be out of the woodwork’,” said leasing consultant Dale Willerton, CEO of The Lease Coach.
Related Topics: Management & Leasing, News, Retail Real Estate, Trends |
by David Bodamer October 2nd, 2008
A few months ago we linked to an item from Boston about how the mayor wanted greater assurances from developers about financing before giving the green light to large projects. At the time, the Filene’s redevelopment was stalled because of lack of financing.
It appears that even amid the credit crisis, the project was able to secure financing. The big question, of course, is what the terms are. They are not described in the story.
After weeks of uncertainty about the struggling project, developer John B. Hynes III and partner Vornado Realty Trust have secured financing to proceed with construction on the 1.25 million-square-foot mixed-used site, which will include retail shops, condominiums, a hotel, and offices in the historic department store building and a new 38-story tower next to it.
The head of the company building the project, John F. Fish of Suffolk Construction Co., said he was told by the developers to ramp up construction work because the team had locked in its final pieces of funding in recent days.
“We’ve been given the green light to move forward, and the financing has been validated, so we’re in good shape,” Fish said. His firm has even bought the structural steel for the complex.
The project has been in the works for a while.
Related Topics: Development, Finance, Mixed-Use, News, REITs, Retail Real Estate |
by David Bodamer October 2nd, 2008
Over the past five or 10 years there has been a downright explosion of bank branches all over the place. With the rapid consolidation of the sector, that’s bound to change. In New York, for example, there’s no way JP Morgan Chase keeps all the Washington Mutual branches open. At any rate, this will translate into more vacancies and subleases.
“Like any retailer, they thought ‘out of sight, out of mind,’ so they changed the way banking was done” by making themselves more visible to customers by adding more stores, Roseman said. Competition among banks for space drove up rent prices and drove out small businesses and even large businesses that might have fit better into those locations.
In just the past week, J.P. Morgan Chase & Co. took over a bulk of Washington Mutual’s operations and Citigroup Inc. acquired most of Wachovia Corp. The surviving banks will review their portfolios and see which of their newly acquired branches and their existing ones should stay open and which should close, Roseman said.
The banks must still honor their leases, so many will be looking to sublet the spaces where they close branches, said Lisa Breier Urban, an attorney with the law firm Breier Deutschmeister Urban & Fromme in New York. Smaller businesses and so-called “mom and pop” stores, which were pushed out when the bank branches were expanding and driving up rents, might not be able to afford the spaces, even though the market values across the country will readjust in the coming months, Urban said. “My sense is that when they are gone, they are gone,” she said of the small businesses. “Only chains have the money to step into these types of spaces,” Urban said, citing New York City’s ubiquitous drug store Duane Reade as an example.
Related Topics: News, Retail, Retail Real Estate, Trends |
by David Bodamer October 2nd, 2008
Updated at 10:51 AM
The Senate version of the bill that passed last night includes a whole lot of stuff that has nothing to do with solving the current problem–restoring liquidity to the financial system. Doesn’t all this stuff mean the real price of the bill will be hundreds of billions of dollars more than the $700 billion?
Update: This Forbes story indicates that the added provisions could increase the cost of the bill by $110.4 billion over the next 10 years. The energy provisions, meanwhile, are paid for.
TITLE I—ENERGY PRODUCTION INCENTIVES
Subtitle A—Renewable Energy Incentives
Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine renewables.
Sec. 103. Energy credit.
Sec. 104. Energy credit for small wind property.
Sec. 105. Energy credit for geothermal heat pump systems.
Sec. 106. Credit for residential energy efficient property.
Sec. 107. New clean renewable energy bonds.
Sec. 108. Credit for steel industry fuel.
Sec. 109. Special rule to implement FERC and State electric restructuring policy.
Subtitle B—Carbon Mitigation and Coal Provisions
Sec. 111. Expansion and modification of advanced coal project investment credit.
Sec. 112. Expansion and modification of coal gasification investment credit.
Sec. 113. Temporary increase in coal excise tax; funding of Black Lung Disability
Trust Fund.
Sec. 114. Special rules for refund of the coal excise tax to certain coal producers
and exporters.
Sec. 115. Tax credit for carbon dioxide sequestration.
Sec. 116. Certain income and gains relating to industrial source carbon dioxide
treated as qualifying income for publicly traded partnerships.
Sec. 117. Carbon audit of the tax code.
Read the rest of this entry »
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