chuckhoffmann Wrote:
-------------------------------------------------------
> It looks like investors in the Pennsylvania Real
> Estate Investment Trust are punishing their stock
> for their decision to buy the Springfield Town
> Center.
>
> Also, according to this, there's going to be a
> police substation at the new Springfield Town
> Center, just like there was at the old Springfield
> Mall.
>
>
Was $465M too high a price to pay for
> Springfield Mall? Investors say yes
> By Michael Neibauer
> Apr 29, 2014
>
http://www.bizjournals.com/washington/breaking_gro
> und/2014/04/was-buying-springfield-mall-a-huge-mis
> take-for.html?fb_action_ids=10152403219533735&fb_a
> ction_types=og.comments
Top executives
> with the Pennsylvania Real Estate Investment Trust
> are convinced that their pending $465 million
> acquisition of the Springfield Town Center will
> pay big dividends.
>
> Investors and analysts? Not so much. PREIT’s
> stock (NYSE: PEI) is down 12 percent since March
> 3, when it joined Vornado Realty Trust, the mall's
> current owner, to announce the arrangement.
> PREIT's stock opened Tuesday's trading at $16.52.
> It closed March 3 with a price of $18.39.
>
> During a recent earnings call, PREIT CEO Joseph
> Coradino faced tough questions from Citi Managing
> Director Michael Bilerman, who suggested the trust
> should be looking for a way out — either walking
> away or restructuring the deal.
>
> “Since you’ve announced that transaction, your
> stock is down 12 percent,” Bilerman said.
> “You’ve lost almost $160 million in equity
> market cap. REITs over that time were up 1
> percent, malls were up 3 percent. Do you step back
> and sort of say, maybe the market is telling us
> something?”
>
> Yes, Coradino responded, the market is “telling
> us that they don’t feel the way we feel about
> the acquisition in Springfield Town Center.” But
> PREIT is unwavering, despite the “execution
> risk.”
>
> “The strategic location, superior demographics,
> quality of the renovation and demonstrated tenant
> interest confirms the potential of this
> property,” he said. “The property has it all.
> It’s accessible to mass transit at the
> confluence of three major interstate highways. It
> is located in one of the densest, highest income,
> well-educated, under retail trade areas with
> unemployment levels significantly below the
> national average. It has it all.”
>
> Coradino described leasing progress as
> “strong,” with roughly 65 percent of the
> mall’s in-line spaces committed and a “robust
> queue of prospective tenants.” According to a
> PREIT investor presentation, the 1.35
> million-square-foot mall is scheduled to reopen
> Oct. 17.
>
> Bilerman followed up that the cost of entry into
> Springfield was “too much.” But when the
> analyst suggested stock buybacks, more asset sales
> or even selling the company to strengthen investor
> confidence, Coradino said, simply, “We
> execute.”
>
> “It’s a marathon, it’s not a sprint,” he
> said. “The belief isn’t blind faith at this
> point. It’s important that you get that. I mean,
> the kind of tenant interest in negotiations that
> we’re in at Springfield Town Center clearly tell
> us that this was the right thing to do and that
> what we believed we could achieve there is
> achievable and will be achieved.”
>
> Coradino's "marathon" statement may be a reference
> to the fact that PREIT is not only buying the
> mall, but also its vast surface parking lots that
> are planned for future residential and commercial
> redevelopment. Hence, the town center.
>
> As an aside, the latest permits I’ve noted for
> the Springfield Town Center include The
> Children’s Place and Victoria’s Secret. Also,
> permits were issued for the police substation and
> the management office.
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