Tuesday, 29 December 2009 00:00

The next step in the GGP saga

Hovde has issued a reply to Ackman's second GGP presentation. These hedge funds put out more analysis than the bank analysts that follow GGP, SERIOUSLY! For those that need a recap: My responses to Ackman's presenations are CRE 2010 Overview and It was bound to happen. Reggie Middleton vs Ackman vs Hovde on GGP!

Here are the Ackman reports: Ackman's CRE presentation and pdf ackman_ggp122209_0 29/12/2009,14:58 1.18 Mb

This is the most recent one by Hovde: General Growth Properties - 2.pdf.

I also noted that Hovde is short Macerich. See my opinion on that company: A Granular Look Into a $6 Billion REIT: Is This the Next GGP?

Last modified on Tuesday, 29 December 2009 00:00

7 comments

  • Comment Link Bank Rate Recap Tuesday, 23 November 2010 13:31 posted by Bank Rate Recap

    I have spammed Reggie's site several times and have forced him to expose me. IF you don't like spammers, email me and ask me to stop. david.donson@gmail.com

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  • Comment Link Bank Rate Recap Sunday, 21 November 2010 19:34 posted by Bank Rate Recap

    hey, I added ur site to my RSS reader. thnx the posts are awesome!

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  • Comment Link NDbadger Wednesday, 30 December 2009 14:02 posted by NDbadger

    he did get a 20 bagger out of it, after all.

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  • Comment Link shaunsnoll Wednesday, 30 December 2009 10:08 posted by shaunsnoll

    thanks for your input Reggie, if anyone knows GGP inside and out it would be you.

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  • Comment Link Reggie Middleton Wednesday, 30 December 2009 09:55 posted by Reggie Middleton

    Hey, I'll give Ackman the high beta play. He made good money, but some people are confusing the beta from the market rally with the alpha of finding a truly undervalued opportunity.

    There is a difference.

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  • Comment Link NDbadger Wednesday, 30 December 2009 09:52 posted by NDbadger

    also further illustrates just how aggressive (and inappropriate in my opinion) is Ackman's cap rate.

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  • Comment Link Reggie Middleton Wednesday, 30 December 2009 07:16 posted by Reggie Middleton

    After going through the latest presentation by Hovde Capital on GGP. The key arguments impacting valuation including those regarding a)adjustments to NOI, b)Leasing spreads and future NOI c) Cap rates concurs with our analysis. However, there are some additional points which Hovde has further elucidated:
    •Hovde incorporates estimated annual debt amortization charge of $400 million in the adjusted interest coverage of 1.7x (based on our calculation) to calculate the debt service coverage of 1.2x.
    •Further reinforces the inappropriateness of taking Simon Property as comparable peer by comparing the credit ratings, leverage levels and fixed charges coverage ratios of Simon with GGP.
    •Lack of any possibility of strategic acquisition owing to very little value left for equity holders.
    •Reinforces the lack of value left in MPC (Master planned community) segment and the possibility of contingent liability emerging to heirs of the Hughes estate in case there is any value left in these assets. For the valuation purpose, we have taken the value of this segment as nil.

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