guys, lets ease up on fer. At some level he makes the case for grt and against all reits. All real estate is selling at very low cap rates despite weak conditions.In grt we have bought real estate at below market prices. grt can not buy other real estate without duliting our bargin.Other reits have lower cost of capital, but the shareholders are the cost of capital. vno was my lrgest holding,but sold 2+ years ago at a price higher than current market
IMVHO, I do not think Vector Vest has the slightest clue as how to put a valuation on equity reits.I don't think they know the mechanics of how they make money. And I am sure of it in the case of MBS reits. Most of the "formulas" they use just don't apply to a peculiar "beast" like an MBS reit. Again, JMVHO
That is an interesting comment you made about VNO. I had a similar experience involving a different REIT. In 1998, I made seven purchases between February and July at costs of between $33.00 and $34.125 per share. I believe this REIT is the largest mall operator in the United States. Three of their malls are close to my home, and I assure you they are nice malls. My wife and I visited the largest mall in their portfolio, Mall of America. Finding the mall unique, it took us two days to see this mall. Can you imagine a 7-acre amusement park in the center of a mall? Or a 1,000,000-gallon aquarium IN THE MALL to see aquatic life?
The name of the REIT is Simon Property Group. Here we are, FOUR YEARS LATER, and the stock price is the same.
All this talk about capex rates and no development on the drawing boards for GRT has me wondering that, just maybe, BIGGER ISN'T BETTER.
(Disclosure: I do not own stock in SPG, and it is not my intention to hype or bash the aforementioned REIT.)
The key to malls is that they have mgmt teams that keep up with the times. Over the next few years I expect the Sears and JC Penney's and Macy's to give way in the sense that they will want or desire to control anchor space in so many malls. I see them shrinking and the malls responding to the challenge by changing their big box "3-anchor" traditional approach to a multiple anchor approach. It won't be as good as the newer malls multiple anchor concept because they will not be able to spread them throughout the mall and will have to use the 3 anchor positions to house more anchors by making the big boxes smaller.... perhaps halved.
SPG up to this point has handled their capex and infill developmt very well but they are reaching the end of the road and have been growing thru acquisition the last 2 years. Their growth is in fact slowing and they no longer will be the sector leader in ffo growth..... GGP and MLS will take over from here. Its interesting that SPG is so aggressive about taking out TCO. I suspect they are trying to get TCO on the cheap inasmuch as it just completed a large developmt program that has left their balance sheet weak but by all appearances TCO was about to see some supercharged earning growth from all their new developmt.
I haven't been hard on him. He simply refuses to address the issues I've raised on three separate occasions. Now it's possible I'm too stupid to make a decent point, but I don't think so. Why the refusal to respond?