by David Bodamer January 25th, 2011
Canadian real estate giant RioCan REIT has been extremely active in building up its exposure in the United States. Last year it formed joint ventures with Inland Western Retail Real Estate Inc. and Cedar Shopping Centers Inc. Both of those JVs remain active in acquiring assets.
Now RioCan has hooked up with a third U.S. REIT–Tanger Outlet Centers. Only with this venture, RioCan is seeking to bring Tanger’s expertise up north. The $1 billion joint venture to develop outlet malls in Canada.
“In response to the increasing demand by U.S. tenants to expand into Canada, RioCan is pleased to partner with Tanger to develop Canada’s first portfolio of U.S.-style outlet centres,” Edward Sonshine, RioCan’s president and chief executive said in a statement.
“This venture will fill a void in the Canadian retail marketplace and will provide consumers with a distinctive outlet shopping experience closer to home,” he said.
…
The agreement will see RioCan and Tanger acquire and lease sites across Canada and redevelop them into discount shopping malls in the image of Tanger Outlet Centers in the United States, which cater to brand-name and designer manufacturers.
Here are some other recent news and notes from around the retail real estate world.
Related Topics: Development, International, Investment, News, REITs, Retail, Retail Real Estate, Trends |
by Elaine Misonzhnik January 13th, 2011
It looks like the number of publicly traded retail REITs might grow a bit this year. Today, news emerged that American Assets Trust Inc. successfully raised $564 million in the largest REIT IPO in more than a year.
For more on the latest news in retail and retail real estate follow the links below:
Related Topics: International, Investment, Management & Leasing, News, REITs, Research, Retail, Retail Real Estate |
by David Bodamer January 11th, 2011
With tomorrow’s deadline looming to make a bid for Capital Shopping Centres, Simon Property Group announced this morning that it was ending its pursuit of the British mall owner.
Text of its release is below:
On December 15, 2010 Simon announced an indicative offer of 425p for CSC’s entire share capital (less any dividend declared, made or paid after that date). Access to satisfactory due diligence from CSC is the only non-waivable outstanding precondition to Simon announcing a firm offer. If a firm offer were to be announced, it would be subject to a number of conditions including a non-waivable condition relating to the Trafford acquisition not proceeding. Despite numerous overtures from Simon and in full knowledge that Simon, given this due diligence precondition, is not able to announce a firm offer without it, the CSC board has refused to share any due diligence information with Simon. Simon therefore has no alternative other than to announce that it does not intend to make an offer for the entire share capital of CSC, and CSC shareholders are unfortunately thereby deprived of the option to sell their shares pursuant to such an offer.
On January 7, 2011, CSC announced revised terms for its proposed acquisition of the Trafford Centre. It is readily apparent that the CSC board revised the terms of the Trafford acquisition in response to pressure from Simon, despite having initially expressed unwillingness to contemplate revising the terms of the transaction. The revised terms do not address Simon’s fundamental concerns and the transaction remains deeply unattractive for CSC shareholders:
- The CSC board is still proposing to relieve the owner of the Trafford Centre of a potential tax liability of more than £300 million and to transfer significant control of CSC to Peel at a discounted price.
- The purchase price for the acquisition of the Trafford Centre is still too high.
- The transaction is still cash flow negative by c. £27 million on an annual pro forma basis reducing dividend and cash flow coverages.
- Existing CSC shareholders are still not being given the opportunity to participate in the discounted share issue and suffering a further dilution of their holdings in a company that had 376 million ordinary shares outstanding on a fully diluted basis in May 2008, but will have 897.5 million shares outstanding on a fully diluted basis if the Trafford transaction is completed on the revised terms, an astonishing increase of nearly 140%.
As Simon also announced on January 7, 2011, the CSC’s board’s belief in “potential net asset value of up to 625p [per CSC share]” represents, in Simon’s view, wishful thinking and was designed to frustrate Simon’s offer. If the CSC board really believes in this potential value, why are they proposing to issue 33% of the company’s existing shares to Peel at a price of 400p, thereby diluting existing shareholders?
Simon therefore continues to oppose the value-destructive Trafford Centre transaction and urges its fellow CSC shareholders to vote against it at the CSC EGM on January 26, 2011. Simon reserves the right to sell some or all of its existing holding in CSC and/or to acquire, and/or to offer to acquire, CSC shares or interests in CSC shares, subject to Simon and its concert parties not increasing their holding in CSC to more than 29.9% of CSC’s share capital. For the purposes of Rule 2.8 of the Code, Simon reserves the right to make or participate in an offer for CSC (and/or take any other action which would otherwise be restricted under Rule 2.8 of the Code) within the next six months following the date of this announcement: (i) with the agreement or recommendation of the Board of CSC; (ii) following the announcement of an offer by or on behalf of a third party for CSC; (iii) following the announcement by CSC of a “whitewash” proposal (for the purposes of
Note 1 on the Notes on Dispensations from Rule 9 of the Code) or a reverse takeover (as set out in Note 2 on Rule 3.2 of the Code); or (iv) if there is a material change of circumstances.
Simon currently holds 5.11% of CSC’s issued share capital or 35,355,794 shares in total.
Capital Shopping Centres acknowledged the announcement with a brief release of its own that continues to support its proposed Trafford Centre offer.
So it looks like this particular saga has come to close. Where will Simon’s attentions turn now?
For previous stories, check the links below.
Related Topics: International, Investment, News, REITs, Retail Real Estate |
by David Bodamer January 5th, 2011
With one week to go before Simon Property Group’s deadline to make a takeover offer for Capital Shopping Centres Group Plc, there is a new twist in the story. Yesterday afternoon, shopping center REIT Equity One announced the closing of an acquisition of Capital and Counties USA, Inc. (C&C USA) through a joint venture with Capital Shopping Centres.
This comes about a week after Simon announced that it had raised about $4.6 billion in debt to cover a potential acquisition of Capital Shopping Centres.
According to the terms of the deal:
Capital Shopping Centres will receive 4.1 million shares of Equity One common stock and 11.4 million joint venture units, after accounting for working capital adjustments. Capital Shopping Centres may redeem its units in the joint venture for Equity One common stock on a one-for-one basis, or cash, at Equity One’s option. Equity One will assume approximately $243 million of mortgage debt, including its proportionate share of debt held by joint ventures and following the repayment of an $84 million mortgage secured by Serramonte Center which occurred simultaneously with the closing of this transaction.
In December 2010, C&C USA sold two non-core properties consisting of South Figueroa, a vacant land parcel in Los Angeles, and 625 Third Street, an office building in San Francisco, for net proceeds of approximately $16.9 million.
It’s hard to say off the bat exactly this might affect Simon’s pursuit of Capital. For one thing, it lessens Capital’s overall debt load and gives it access to cash. Will that ultimately affect Simon’s offer or provide ammunition for Capital to ward off the takeover bid?
At any rate, the story continues to move quickly. It’s been just over a month since we first got wind of a potential deal here and it seems like we’re rapidly moving towards a resolution within the next week.
For previous stories, check the links below.
Related Topics: Finance, International, Investment, News, REITs, Retail Real Estate |
by David Bodamer December 15th, 2010
Updated at 10:58 AM
Simon Property Group has taken its pursuit of British mall owner Capital Shopping Centres up a notch with a new offer to buy the company for $4.8 billion. Simon had sent another letter over the weekend reiterating its opposition to Capital Shopping Centres’ acquisition offer for Trafford Centre and offered an alternate method for financing that deal. Capital Shopping Centres rejected that proposition.
The $4.8 billion offer is 26 percent above Capital Shopping’s share price immediately prior to the offer period and 21 percent above the average price for the six preceding months. In the latest letter, Simon CEO David Simon wrote, “Our interest in making an offer for CSC is, of course, not new. By making this offer on the terms outlined in this letter, we are confident that we have now answered any objections you have previously expressed. We believe that we should work together to announce a recommended offer, and would urge you to listen to calls from your shareholders – many of whom we have spoken to – opposing the Trafford Centre transaction or asking you to adjourn your forthcoming EGM.”
More details on the offer can be found at the New York Times‘ Deal Book blog and at Property Week.
For previous blog posts on this saga, go here and here.
Update: Property Week is reporting that CSC has rejected Simon’s offer. However, CSC has also decided to postpone the shareholder vote on its proposed Trafford Centre purchase, meaning that there will very likely be more back and forth between the firms before this is all said and done.
Related Topics: Finance, International, Investment, News, REITs, Retail Real Estate |
Zell Talks About CRE Outlook; Rips Obamacare and Dodd-Frank
by David Bodamer March 3rd, 2011
The great Sam Zell, chairman of Equity Investments, was on CNBC this morning talking about a range of topics. A few minutes in he talks about why he has not done deals during the down cycle and his explanation for why the distressed market did not play out the way many people thought it would.
Here are some excerpts from the video. You can watch the whole clip embedded below.
In another segment of the interview, Zell talked politics and blasted Obamacare and ripped the Dodd-Frank bill. Those two clips are below.
Aside from that, there are several other pieces to the interview Read the rest of this entry »
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