Activism and Re-Awakened Value Hunting Sparks Private Investor Interest in Mall REITs

November 29, 2017

Activism and Re-Awakened Value Hunting Sparks Private Investor Interest in Mall REITs

November 28, 2017 | Donna Mitchell | National Real Estate Investor

Mall REIT executives have long asserted that the public markets consistently undervalue their company stock, even though the properties in their portfolios trade at relatively low cap rates. The public markets might now have incentive to change their positions, however, after three separate mall REITs have attracted strong interest from private investment groups.

Earlier this month Brookfield Asset Management submitted a bid of about $14.8 billion to acquire Chicago-based GGP Inc., effectively taking the company private.

Investors are expressing interest in mall REITs in other aggressive ways, too. Elliott Management, a New York City-based hedge fund, reportedly has accumulated enough shares in Bloomfield Hills, Mich.-based Taubman Centers to hold a so-called activist position, yet not enough to publicly disclose them, according to media reports. This comes amid Stamford, Conn.-based Land & Buildings Investment Management pressuring Taubman to make significant management changes at the company. Taubman recently made some changes to its board. Elsewhere, the hedge fund Third Point recently accumulated enough shares in Macerich Co., to own a 5 percent position in the company and give it an activist voice in the company, according to media reports and regulatory filings.

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John E. Moriarty, ChFC
December 2015
February 3, 2016

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