Displaying items by tag: MAC

Tuesday, 08 December 2009 00:00

Subscriber Research Update

In keeping with the theme of Wall Street's ability to peddle nearly anything to the Name Brand enamoring masses, I have decided to offer an addendum to the recent REIT analysis for my subscribers that provides a scenario for an additional (this would be the second in 12 months) equity offering in an attempt to close the equity gap between what the maximum practical LTV on assets and the extant amount of debt to be refinanced. The original update only had scenarios for distressed sale of assets, distressed debt refinancing and voluntary allowance of foreclosure of assets. Although I would consider it unlikely that an equity offering could be pulled off, I have seen stranger things happen.

MAC Report_Consolidated_051209 equity offering addendum MAC Report_Consolidated_051209 equity offering addendum 2009-12-08 03:33:30 308.60 Kb

Tuesday, 08 December 2009 00:00

Subscriber Research Update

In keeping with the theme of Wall Street's ability to peddle nearly anything to the Name Brand enamoring masses, I have decided to offer an addendum to the recent REIT analysis for my subscribers that provides a scenario for an additional (this would be the second in 12 months) equity offering in an attempt to close the equity gap between what the maximum practical LTV on assets and the extant amount of debt to be refinanced. The original update only had scenarios for distressed sale of assets, distressed debt refinancing and voluntary allowance of foreclosure of assets. Although I would consider it unlikely that an equity offering could be pulled off, I have seen stranger things happen.

MAC Report_Consolidated_051209 equity offering addendum MAC Report_Consolidated_051209 equity offering addendum 2009-12-08 03:33:30 308.60 Kb

Monday, 07 December 2009 00:00

The Latest REIT Updates are Now Available

In case subscribers haven't noticed, I have decided to decrease the frequency of analysis in order to increase the depth of the subjects analyzed. Due to the market's detachment from the fundamentals (a phenomenon that looks like it has just about run its course, btw), fundamental practitioners must tread very, very carefully. On that note, I am releasing the 2nd REIT analysis, which I feel makes for an  outstanding short opportunity, particularly in comparison to the previous analysis whose subject has no immediate and/or pressing concerns. This is the most comprehensive work performed in the real estate space since the GGP project, and has the potential to be just as successful as well. The professional version of the document is nearly 30 pages long, and although it is dense reading, I strongly recommend subscribers read through every page very carefully. The retail version is twice its normal length as well.

There will be a substantial amount of follow up analysis and opinion coming. Basically, I am at loggerheads with Goldman Sachs who has out a buy call on the banking and CRE space, wherein my readers know that I am very bearish on this space for fundamental reasons for 2010. I will present evidence to support my case both privately through the subscription services and public through the blog by pulling up instances in the past when GS turned bullish on real estate and what happened to those clients a year or two afterwards.

Enjoy!

MAC Report Consolidated 051209 Retail MAC Report Consolidated 051209 Retail 2009-12-07 03:46:49 580.11 Kb

MAC Report Consolidated 051209 Professional MAC Report Consolidated 051209 Professional 2009-12-07 03:48:11 1.03 Mb

Monday, 07 December 2009 00:00

The Latest REIT Updates are Now Available

In case subscribers haven't noticed, I have decided to decrease the frequency of analysis in order to increase the depth of the subjects analyzed. Due to the market's detachment from the fundamentals (a phenomenon that looks like it has just about run its course, btw), fundamental practitioners must tread very, very carefully. On that note, I am releasing the 2nd REIT analysis, which I feel makes for an  outstanding short opportunity, particularly in comparison to the previous analysis whose subject has no immediate and/or pressing concerns. This is the most comprehensive work performed in the real estate space since the GGP project, and has the potential to be just as successful as well. The professional version of the document is nearly 30 pages long, and although it is dense reading, I strongly recommend subscribers read through every page very carefully. The retail version is twice its normal length as well.

There will be a substantial amount of follow up analysis and opinion coming. Basically, I am at loggerheads with Goldman Sachs who has out a buy call on the banking and CRE space, wherein my readers know that I am very bearish on this space for fundamental reasons for 2010. I will present evidence to support my case both privately through the subscription services and public through the blog by pulling up instances in the past when GS turned bullish on real estate and what happened to those clients a year or two afterwards.

Enjoy!

MAC Report Consolidated 051209 Retail MAC Report Consolidated 051209 Retail 2009-12-07 03:46:49 580.11 Kb

MAC Report Consolidated 051209 Professional MAC Report Consolidated 051209 Professional 2009-12-07 03:48:11 1.03 Mb

Thursday, 20 November 2008 01:00

The Macerich Sensitivity Analysis

This is an actionable intelligence note for profesional level subscribers.

We have done a sensitivity analysis of Macerich's (MAC) valuation based on different scenarios representing re-financing conditions and sale assumptions.  We have broadly assumed four scenarios loosely based upon the options that were available to GGP (see GGP and the type of investigative analysis you will not get from your brokerage house), which had a vastly superior portfolio:

  • Re-financing scenario: Macerich would be able to re-finance all its loans, though at higher interest rate (6.5%, which is slightly conservative considering they just announced 2 loans at 6% and 7.5% in an increasingly adverse environment).
  • Sale scenario: Macerich would be able to re-finance its properties at 65% LTV and the balance of re-financing requirement would be met through sale of some of its properties. We expect MAC to sell a few properties at a discount to the current NOI-based valuation (assuming 15% discount, again taking into consideration the success of GGP over the last few months given their significantly superior portfolio).
  • Foreclosure scenario: Macerich would be able to refinance its properties at 65% LTV and will have to foreclose some of its properties to meet its re-financing requirements. As a result of foreclosure, we expect MAC's interest rates to increase (by 250 basis points).
  • Distressed scenario: Macerich would be able to re-finance at 50% LTV and would have to sell and foreclose some of its properties to meet its re-financing requirements. This is the worst case scenario under which we expect a 20% discount on NOI-based valuation on sale of properties and increase in refinancing costs by 350 basis points. All these conditions may drive the company close to a bankruptcy situation.
macerich_chart.jpg
Professional subscribers may download the actionable note here: Macerich Sensitivity Analyis - Pro. Adobe Acrobat Reader version 9 or better required.