The WSJ reported that shareholders rejected the pay package for the CEO in a non-binding vote. They actually were focused on the base pay package of $1.25mm per year, not so much the $132mm potential stock option awards, because it was more than 2x that of the other employees at Simon.
It doesn't really seem like that much to me - the company is worth 45 billion and has 3,300 employees. The only surprising thing about the shareholder group's statement is that the next highest paid employee is apparently taking home closer to 1/2 a million - you'd think the other c-suite guys got more, right? I don't really look at salaries much though, so maybe I'm way off here.
Showing posts with label SPG. Show all posts
Showing posts with label SPG. Show all posts
Wednesday, May 23, 2012
Friday, May 14, 2010
Lakeforest Mall - BSCMS 2005-T20 $121mm
Reuters had a headline grabbing (give it time, it'll make its way up the headlines) story out today about a Simon Mall about to default.
Default, or not? Occupancy is rough at only 65%, but they're still covering at 1.74x. Any quick review of cash flows and the mall is likely worth far more than the 55% OLTV senior mortgage on it. The maturity date is July 2010, so the real problem is what is going to happen then - refinanced and paid off, or extended.
Seems like a tough call. If you use GGP as a guideline - highly performing assets, maturity dates looming - it will get modified.
The scary part is the special's comments where they apparently do not know the anchor tenants (none of which are part of the collateral). I refer them to the Mall's tenant directory and map.
Default, or not? Occupancy is rough at only 65%, but they're still covering at 1.74x. Any quick review of cash flows and the mall is likely worth far more than the 55% OLTV senior mortgage on it. The maturity date is July 2010, so the real problem is what is going to happen then - refinanced and paid off, or extended.
Seems like a tough call. If you use GGP as a guideline - highly performing assets, maturity dates looming - it will get modified.
The scary part is the special's comments where they apparently do not know the anchor tenants (none of which are part of the collateral). I refer them to the Mall's tenant directory and map.
Monday, March 22, 2010
Extended Stay creditors attempt to freeze cash from Prime Outlets
Ruh roh.
Line Trust Corp. and Deuce Properties Ltd., junior lenders to Extended Stay, will ask a New York state judge to prohibit Lightstone Group LLC and founder David Lichtenstein from transferring cash it receives from the sale, a lawyer for the companies said. Simon Property, the largest U.S. shopping mall owner, said in December it would buy Prime Outlets Acquisition Co. from Lightstone for $2.33 billion including debt.
Sunday, March 7, 2010
Tuesday, February 16, 2010
SPG just offered to buy GGP
Looks close to market close price... cash ($6) and equity ($3+) offer...
UPDATE: Don't forget my nifty interactive map showing the two companies postcoital.
UPDATE: Don't forget my nifty interactive map showing the two companies postcoital.
Wednesday, November 18, 2009
Simon and GGP Marriage - With wedding photos and charts
What would this look like?
Something like the above, where the little rusty-red dots are GGP and the Blue dots are SPG. Note that I think the "CUBA" property is really in Italy and the GEO-Coder misinterpreted it - you can click here for an interactive map that includes all their properties, not just domestic.
GGP has substantially lower coupons on their mortgage debt, averaging 63 bps lower @ 5.29%, but the divide is even larger on loans maturing before the end of 2012, favoring GGP by an average of 125 bps. So, given everything else remains the same, Simon will be likely to assume GGP's mortgage loans. Add in factors such as the lack of available financing, higher coupons, stricter underwriting, etc. SPG's only roadblock to assuming the mortgage debt is getting rating-agency sign-off where its required.
GGP's mortgages on their malls actually perform slightly better than Simon's from a cash flow over debt service perspective. The majority of GGP's malls have a NCF DSCR greater than 2x. Simon's average DSCR is 1.83x.
GGP properties also have slightly lower leverage, with average original LTVs at 62.72% versus SPG's average orig. LTV of 66.53%.
Obviously GGP has a lot more overall debt (mortgage and corporate) due to the Rouse acquisition, and we all know about their huge refi hurdle - look below. This is the maturity schedule, in billions, for all GGP and SPG CMBS mortgages, extended out to their maximum ARD or Extension date.
The footprint overlap is probably of some concern that might lead Simon to cherry pick assets instead of taking the entire platform down. Some MSAs have multiple properties operated by each REIT.
Take Atlanta-proper, for instance. SPG has Phipps Plaza, Lenox Square, and Northlake, while GGP has Cumberland and Perimeter; if you expand to the Atlanta MSA, you end up with SPG malls Discover Mills, Gwinnett Place, Town Center at Cobb, Mall of Georgia, Mall of Georgia Crossing, North Georgia, and GGP has North Point and Southlake. Not only is there a high number of malls in the Atlanta MSA from both sponsors, but a quick look at the loans and the GGP Atlanta loans are higher leveraged then average (so are the SPG loans), and have lower DSCRs than average.
Tenant overlap is pretty consistent, just looking at the non-anchors, and focused on revenue, Simon has a slightly more diverse tenant base.
Not sure who wins the battle of increased tenant concentration - probably the tenants since they have more negotiating power, but could go to the landlords because the tenants have fewer location options.
Will be interesting to see if Simon cherry picks the performing assets and let's the others (especially in high-overlap areas) flounder, or if they go in and take it a substantial percentage of the total to increase their footprint and dominate the space (as if they don't already) blocking out any competitors.
Something like the above, where the little rusty-red dots are GGP and the Blue dots are SPG. Note that I think the "CUBA" property is really in Italy and the GEO-Coder misinterpreted it - you can click here for an interactive map that includes all their properties, not just domestic.
GGP has substantially lower coupons on their mortgage debt, averaging 63 bps lower @ 5.29%, but the divide is even larger on loans maturing before the end of 2012, favoring GGP by an average of 125 bps. So, given everything else remains the same, Simon will be likely to assume GGP's mortgage loans. Add in factors such as the lack of available financing, higher coupons, stricter underwriting, etc. SPG's only roadblock to assuming the mortgage debt is getting rating-agency sign-off where its required.
GGP's mortgages on their malls actually perform slightly better than Simon's from a cash flow over debt service perspective. The majority of GGP's malls have a NCF DSCR greater than 2x. Simon's average DSCR is 1.83x.
GGP properties also have slightly lower leverage, with average original LTVs at 62.72% versus SPG's average orig. LTV of 66.53%.
Obviously GGP has a lot more overall debt (mortgage and corporate) due to the Rouse acquisition, and we all know about their huge refi hurdle - look below. This is the maturity schedule, in billions, for all GGP and SPG CMBS mortgages, extended out to their maximum ARD or Extension date.
The footprint overlap is probably of some concern that might lead Simon to cherry pick assets instead of taking the entire platform down. Some MSAs have multiple properties operated by each REIT.
Take Atlanta-proper, for instance. SPG has Phipps Plaza, Lenox Square, and Northlake, while GGP has Cumberland and Perimeter; if you expand to the Atlanta MSA, you end up with SPG malls Discover Mills, Gwinnett Place, Town Center at Cobb, Mall of Georgia, Mall of Georgia Crossing, North Georgia, and GGP has North Point and Southlake. Not only is there a high number of malls in the Atlanta MSA from both sponsors, but a quick look at the loans and the GGP Atlanta loans are higher leveraged then average (so are the SPG loans), and have lower DSCRs than average.
Tenant overlap is pretty consistent, just looking at the non-anchors, and focused on revenue, Simon has a slightly more diverse tenant base.
| Top Retail Tenants by Rental Income | Simon | GGP |
| The Gap | 2.20% | 2.90% |
| Limited | 2.00% | 2.60% |
| Abercrombie & Fitch | 1.80% | 2.30% |
| Foot Locker | 1.40% | 2.30% |
| Zale | 1.00% | <1% |
| Luxottica Group | 1.00% | <1% |
| American Eagle | 0.90% | 1.50% |
| Express | 0.90% | 1.30% |
| Sterling Jewelry | 0.90% | <1% |
| Genesco | 0.80% | 1.10% |
Not sure who wins the battle of increased tenant concentration - probably the tenants since they have more negotiating power, but could go to the landlords because the tenants have fewer location options.
Will be interesting to see if Simon cherry picks the performing assets and let's the others (especially in high-overlap areas) flounder, or if they go in and take it a substantial percentage of the total to increase their footprint and dominate the space (as if they don't already) blocking out any competitors.
Friday, April 24, 2009
Oh no she didnt... Highland bites back at Dillard's
Dillard's wanted to break it's lease that expires in 2017 because Highland Mall (JPMCC 2002-CIB4) is supposedly mismanaged and is now a ghost town, so they sue in court. Mind you the Dillard lease appears to have been renegotiated in 2007.
The mall is having issues: The 3Q 2008 numbers were 1.38x NCF DSCR and 81% occupancy down from prior year occupancies of 94+%, and significantly lower than the rest of the MSA. They lost JC Penney and apparently there is dark space (no relation) in that section of the mall. And there is a huge ongoing local dispute because the mall shut down early one day following a predominantly african-american
track event - the NAACP has given speeches, names like Jim Crow were plastered on billboards, and a boycott has been sounded by african american and hispanic populations (this mall is in Texas) - so it has issues.
GGP and SPG jointly own the mall, so I guess Dillard's figured it could railroad its way around that pesky contractual lease given the problems at the parent co's. Nope. The mall counter sued Dillard's:
Searching for on-line law degrees with a focus on CRE law now...
The mall is having issues: The 3Q 2008 numbers were 1.38x NCF DSCR and 81% occupancy down from prior year occupancies of 94+%, and significantly lower than the rest of the MSA. They lost JC Penney and apparently there is dark space (no relation) in that section of the mall. And there is a huge ongoing local dispute because the mall shut down early one day following a predominantly african-american
track event - the NAACP has given speeches, names like Jim Crow were plastered on billboards, and a boycott has been sounded by african american and hispanic populations (this mall is in Texas) - so it has issues.GGP and SPG jointly own the mall, so I guess Dillard's figured it could railroad its way around that pesky contractual lease given the problems at the parent co's. Nope. The mall counter sued Dillard's:
The mall’s owners ask for a declaratory judgment, attorneys’ fees and damages related to Dillard’s alleged breach of contract, “business disparagement” and “interference with business relations.”Now their legal fees and judgments are likely to exceed any lease expense they could have had.
Searching for on-line law degrees with a focus on CRE law now...
Wednesday, April 22, 2009
Simon Preparing Jingle Mail?
Sounds like Simon might be preparing to turn in the keys on Palm Beach Mall. This is the 3rd largest loan, 5.8%, in JPMCC 2003-PM1A.
The property performance declined drastically last year (Madoff?) to just 0.63x DSCR for YE 2008 from 2007 DSCR of 1.32x. Simon has been covering the shortfall out of pocket, but apparently stopped doing so, according to Kris Hudson at the WSJ (sorry no link, but pasted below).
No special servicer notes were readily available. You'll recall that Eastland Mall (formerly Glimcher's) went through a similar process, but it dragged out for years and the saga continues today.
The property performance declined drastically last year (Madoff?) to just 0.63x DSCR for YE 2008 from 2007 DSCR of 1.32x. Simon has been covering the shortfall out of pocket, but apparently stopped doing so, according to Kris Hudson at the WSJ (sorry no link, but pasted below).
No special servicer notes were readily available. You'll recall that Eastland Mall (formerly Glimcher's) went through a similar process, but it dragged out for years and the saga continues today.
Pain in Palm Beach
Even the biggest landlords face losing properties to foreclosure in this recession. Take mall owner Simon Property Group Inc., which is poised to forfeit the 42-year-old Palm Beach Mall after the servicer on the mall's $51 million securitized mortgage initiated foreclosure proceedings last week.
Simon inherited the mall in West Palm Beach, Fla., when it bought two rival mall owners in 1996 and 1998. Even then, Palm Beach Mall was losing out to newer, ritzier malls in neighboring cities. Simon renovated it this decade, but it continued to decline and now is mostly empty. An effort to lure home-goods retailer Ikea was scuttled by the recession.
In recent years, all of the cash flow generated by Palm Beach Mall went to paying the interest on its mortgage. But it fell short in the past year, and Simon opted against chipping in extra money to cover the difference in March and this month.
Efforts to renegotiate the loan failed, according to a person familiar with the talks. A representative of the mortgage's servicer, Orix Capital Markets LLC, declined to comment, as did a Simon representative.
—Kris Hudson
Friday, April 3, 2009
Who is making and receiving mortgages -- Bank of Amerillwide
The fine researchers at Bank of Amerillwide put out a good list of loans and extensions, some of which were news to us. See below:
Macerich - Refied two mortgages, extended two. Shops at North Bridge received a $205 mm 7-year, 7.5% coupon mortgage from insurance money; it refies a $205 mm pari passu loan with a 4.67% coupon in LBUBS 2004-C6 and MSC 2004-IQ8, but the new DSCR is still roughly 1.89x using 3Q 08 annualized net cash flow numbers. On a separate unamed property, they closed a $115 million bank loan with a 2-year term floater at L+350 bps with a 5.25% floor.
Macerich also extend the $54 mm Inland Center in San Bernadino (LBUBS 2004-C2) loan all the way out to 2/2011 with a 50 bp coupon step-up every 6 months. BOMLW points out that this destroys the A2 holder who would have been paid down substantially had the loan paid off as scheduled. Again, the other extended loan remains unamed but received a 2-year extension as well.
The mention the two Simon malls in LBCMT 1999-C1 that we discussed yesterday.
Brandywine closed a $90 mm mortgage on a Philly office building taking out a soon to be maturing loan of $69mm. No further details.
Liberty also reported 6 separate loans funded by life insurance for a total of $317 mm. Half floaters and half fixed, with an all-in coupon of 7.1%.
Macerich - Refied two mortgages, extended two. Shops at North Bridge received a $205 mm 7-year, 7.5% coupon mortgage from insurance money; it refies a $205 mm pari passu loan with a 4.67% coupon in LBUBS 2004-C6 and MSC 2004-IQ8, but the new DSCR is still roughly 1.89x using 3Q 08 annualized net cash flow numbers. On a separate unamed property, they closed a $115 million bank loan with a 2-year term floater at L+350 bps with a 5.25% floor.
Macerich also extend the $54 mm Inland Center in San Bernadino (LBUBS 2004-C2) loan all the way out to 2/2011 with a 50 bp coupon step-up every 6 months. BOMLW points out that this destroys the A2 holder who would have been paid down substantially had the loan paid off as scheduled. Again, the other extended loan remains unamed but received a 2-year extension as well.
The mention the two Simon malls in LBCMT 1999-C1 that we discussed yesterday.
Brandywine closed a $90 mm mortgage on a Philly office building taking out a soon to be maturing loan of $69mm. No further details.
Liberty also reported 6 separate loans funded by life insurance for a total of $317 mm. Half floaters and half fixed, with an all-in coupon of 7.1%.
Thursday, April 2, 2009
LBCMT 1999-C1 - Two Simon Loans Refi
The two large Simon sponsored loans in this deal matured in the first quarter of this year, and apparently refied without any problems. Both loans were purportedly done through insurance company money, allowed Simon to take out new 10-year loans with interest rates just 70-75 bps higher than the old loans. Further, the loans were originated in 1999, so they had 10-years of embedded appreciation, so Simon was able to take out significant equity on the two loans.
LBCMT 1999-C1 New Loan
Penn Square Mall
Rate 7.025% 7.75%
Orig. Bal. $74.8mm $100mm
Most Recent $65.8mm
Woodland Hills
Rate 7.00% 7.79%
Orig. Bal. $89.6mm $97.5 mm
Most Recent $78.6mm
Both of the prior loans were amortizing, so Simon took out a signficant $53.1 mm in cash out of the deal. This is realy what I expect to see in the coming "wave of maturities" - the exception being the 5-year loans starting in earnest in late 2010 and 2011 that seem problematic to me.
2008 YE for Penn Square was a 3.34x DSCR - why doesn't anyone report that! I stumbled across these refis (Hotel Tango Journal Record), but had no problem finding the maturity default last week on another of their malls
LBCMT 1999-C1 New Loan
Penn Square Mall
Rate 7.025% 7.75%
Orig. Bal. $74.8mm $100mm
Most Recent $65.8mm
Woodland Hills
Rate 7.00% 7.79%
Orig. Bal. $89.6mm $97.5 mm
Most Recent $78.6mm
Both of the prior loans were amortizing, so Simon took out a signficant $53.1 mm in cash out of the deal. This is realy what I expect to see in the coming "wave of maturities" - the exception being the 5-year loans starting in earnest in late 2010 and 2011 that seem problematic to me.
2008 YE for Penn Square was a 3.34x DSCR - why doesn't anyone report that! I stumbled across these refis (Hotel Tango Journal Record), but had no problem finding the maturity default last week on another of their malls
Monday, March 30, 2009
The Source Maturity Default
The Source matured 2 weeks ago with no payoff...
This particular mall has been hit with multiple bad exposures - Steve & Barry's, Circuit City (3rd largest tenant), and Fortunoff. I prefer to wait on the sidelines to see how this one plays out. I haven't looked at the financials to see how much those tenants contributed to the bottom line, but the mall was performing well last year, it has 10 years of appreciation built into it, and it might be a likely extension (again, not knowing the details).
It should be widely reported today - it's already here and here. This is the sort of news the CMBS sector needs to nip last week's rally in the bud - we can't have strong rally's, we're in a recession folks. Save your money for ammo and water.
This particular mall has been hit with multiple bad exposures - Steve & Barry's, Circuit City (3rd largest tenant), and Fortunoff. I prefer to wait on the sidelines to see how this one plays out. I haven't looked at the financials to see how much those tenants contributed to the bottom line, but the mall was performing well last year, it has 10 years of appreciation built into it, and it might be a likely extension (again, not knowing the details).
It should be widely reported today - it's already here and here. This is the sort of news the CMBS sector needs to nip last week's rally in the bud - we can't have strong rally's, we're in a recession folks. Save your money for ammo and water.
Friday, March 20, 2009
SPG 10.875% 2018 sells $650mm
The debt was heavily oversubscribed and upsized from $500mm. It traded at a discount to their 2019 notes by over 100 bps, and was very rich to A CMBS with over 5,000 bps of spread between the two. The new issue matures in 2018.
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