by Elaine Misonzhnik March 25th, 2011
Shopping center REITs closed 2010 in stable condition, though their performance was more mixed than that posted by regional mall REITs. The sector seemed to be experiencing the lingering impact of multiple big-box closings in 2009, as well as some troubles in re-leasing smaller shop space to mom-and-pop retailers.
Out of the 15 REITs that have reported, eight beat consensus analyst estimates on FFO per share, six missed and one met expectations. The outperformers included the largest sector players like Kimco Realty Corp. and Developers Diversified Realty, as well as Inland Real Estate Corp., Federal Realty Investment Trust, Acadia Realty Trust, Urstadt Biddle and Whitestone REIT. The range of their outperformance, however, was modest–from $0.01 per share to $0.06 per share.
On the other hand, Cedar Shopping Centers, Regency Centers, Ramco-Gershenson Properties, Weingarten Realty, Saul Centers and National Retail Properties missed by a larger margin, starting at $0.05 per share for Ramco.
Kite Realty Group was in line with consensus estimates.
The good news, according to a March 8 note by RBC Capital Markets analyst Rich Moore is that the worst of the closings appear to be over. He wrote:
Retailer bankruptcies outside Ultimate Electronics and Borders are light and appear likely to remain so for the remainder of the post 4Q holiday bankruptcy season. As a result, we expect operations to continue to improve into 1Q11 and throughout the year.
During an earnings call with analysts a few weeks ago, Kimco Realty president and CEO Dave Henry also noted that in aggregate, leasing activity and rent growth were coming back to the sector, though there are still wide differences between the best and worst markets.
Related Topics: News, REITs, Retail Real Estate, Trends |
by Elaine Misonzhnik March 25th, 2011
Blockbuster revealed this week that it will reject 150 leases, in addition to the 220 it had already canceled, according to The Street. The company was previously facing threats of eviction from some of its landlords because it was late on rents. For additional news reports about retail and retail real estate, follow the links below:
Related Topics: Finance, Management & Leasing, News, Retail, Retail Real Estate, Trends |
by Elaine Misonzhnik March 24th, 2011
The streak of private equity firms going after retailers continues, with Leonard Green & Partners signing a confidentiality agreement with BJ’s Wholesale Club, according to Supermarket News.
Private equity took a breather from the retail sector in 2009 and 2010, but there has been a definite pick-up in deal activity in recent months, including the contested buyout of J.Crew by a Leonard Green/Texas Pacific partnership and several restaurant chain buyouts.
As a buyout target, BJ’s has several things that might make it attractive to private equity players, including a focus on value and an established brand name. Its main weakness, according to analysts, is that it’s competing against two stronger players: Costco and Sam’s Club. That would give an experienced private equity owner something to work with in creating additional value for the chain. If the Leonard Green deal goes through, it would be interesting to see what the firm will do with BJ’s to help it gain market share.
Ironically, while private equity firms are taking a closer look at more and more retailers, a chain that perhaps needs a private partner the most, Barnes & Noble, is about to give up on its search for a buyer, Bloomberg reports.
For more news on retail and retail real estate, follow the links below:
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by Elaine Misonzhnik March 22nd, 2011
Last night, Grubb & Ellis announced it hired a financial advisor in JPM Securities to explore strategic alternatives, including a possible sale of the company, Bloomberg reports. According to company chairman Michael Kojaian, Grubb & Ellis received some unsolicited offers and given its less than stellar stock performance in recent months, decided to look into the possibilities.
The move begs the question of whether we might see more merger/acquisition activity among CRE firms going forward. Over the course of 2009 and 2010, most brokerage companies struggled as investment sales and leasing transactions plunged. Recently, however, some finally started to show profits and hiring new talent. Or in any case, exchanging existing professionals on both the investment sales and leasing fronts.
Does this mean conditions might be ripe for healthier firms to go after weaker players? It will be interesting to see how the story plays out over the coming months, especially as investment sales activity and leasing are expected to pick up.
Back in 2007, Grubb & Ellis was only one of a number of brokerage firms to try to grow its market share through M&A deals.
Related Topics: News, Retail Real Estate, Trends |
by Elaine Misonzhnik March 17th, 2011
Landlords anxious to know whether their centers will be affected by the Borders reorganization will have to wait a little longer. On Wednesday, the bankruptcy court granted the retailer an extension to decide which leases to keep and which to terminate. In addition, the court approved $505 million in debtor-in-possession financing Borders arranged prior to filing for Chapter 11.
The Wall Street Journal reports that Borders executives would like to exit bankruptcy protection by summer’s end and are seriously considering closing an additional 75 stores, on top of the 200 closings confirmed subsequent with the chain’s bankruptcy filing. For more stories about retail and retail real estate, follow the links below:
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by Elaine Misonzhnik March 11th, 2011
Now that Sandeep Mathrani has assumed the post as GGP’s new CEO, he plans to further clean out the REIT’s portfolio. Mathrani would like GGP to stick with its core mall format and shed the assorted strip centers, power centers and office buildings it still owns, according to the CoStar Group. Mathrani said his goal is to reduce GGP’s holdings to 150 properties, principally malls. For more on retail and retail real state follow the links below:
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Forest City Sells Stake in New York Retail Portfolio
by David Bodamer March 30th, 2011
Forest City Enterprises has been extremely busy the last couple of years as it has aggressively cleaned up its balance sheet, increased liquidity and revamped its approach to development and redevelopment (including halting all its projects at one point). And, of course, it even recently completed a succession plan.
In just one example of how its tidied up its balance sheet, two months ago the firm exchanged senior notes for about 10 million shares of its common stock.
In the latest move in that vein, Forest City announced last night that it reached a deal to sell joint venture interests in 15 retail properties in and around New York City.
It’s a move the firm teased late last year and now has come to fruition.
According to the firm’s release:
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