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Glimcher Realty Trust (NYSE:GRT)

Q4 2008 Earnings Call

February 19, 2009 11:00 AM ET

Executives

Melissa Indest - Vice President, Finance and Accounting

Michael P. Glimcher - Chairman and Chief Executive Officer

Mark E. Yale - Executive Vice President, Chief Financial Officer and Treasurer

Marshall A. Loeb - President and Chief Operating Officer

Analysts

Nathan Isbee - Stifel, Nicolaus & Company, Inc.

Benjamin Yang Ben - Green Street Advisors, Inc.

Louis Taylor - Deutsche Bank Securities

Quinton Falelli - Citigroup

Operator

Good day, ladies and gentlemen and welcome to the Glimcher Realty Trust Fourth Quarter Analyst Earnings Conference Call. My name is Fab and I will be your coordinator for today. At this time all participants are in listen-only mode.

We will conduct the question-and-answer session towards the end of this conference. (Operator Instructions).

I would now like to turn the presentation over to your host for today's call, Lisa Indest, Vice President of Finance and Accounting. Please proceed.

Melissa Indest

Good morning and welcome to the Glimcher Realty Trust 2008 fourth quarter conference call. Last evening, a copy of our press release was circulated on the newswire and hopefully each of you had the opportunity to review our results. Copies of both the press release and the fourth quarter supplemental information packet are available on our website at glimcher.com.

Certain statements made during this conference call which are not historical may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For a more detailed description of the risks and uncertainties that may cause future events to differ from those results discussed in the forward-looking statements please refer to our earnings release and to our various SEC filings.

Management may also discuss certain non-GAAP financial measures. Reconciliations of each non-GAAP measure to the comparable GAAP measure are included in our earnings release and the financial reports we filed with the Securities and Exchange Commission.

Members of management with us today are Michael Glimcher, Chairman and Chief Executive Officer; Marshall Loeb, President and COO, and Mark Yale, CFO.

And now, I would like to turn the call over to Michael Glimcher.

Michael P. Glimcher

Thank you, Lisa. Good morning everyone and thank you for joining us on today's call. Clearly, we are experiencing extraordinary times as it relates to the global debt and equity markets. We are currently operating in the unique environment and it seems like each day there is a new or different set of challenges to address. What keeps us grounded and focused is a simple plan that evolves, but has not changed substantially over the last several quarters.

We must continue to maximize property fundamentals, focus on liquidity and near term debt maturities or while delivering consistent and reliable earnings results.

It's easy to focus on all of the challenges that currently exist. But we would like to start with some of the positives that we see for our organization. To begin with, we delivered a solid quarter from a financial standpoint with our $0.59 of reported FFO per share for the fourth quarter falling within our guidance range going into the period.

Our year end portfolio metrics tracks favorably to our peer group. We held our mall store occupancy consistent with the prior year at a near record level of 94%. Releasing spreads remained positive at 10% for the fourth quarter and 15% for the entire fiscal year 2008. While we were disappointed with the absolute 3.3% decline in mall sales year-over-year, we were pleased by the relative performance to the peer group.

From a redevelopment perspective, we completed construction during the fourth quarter of our $50 million Lifestyle addition at our Polaris Fashion Place. The project has already been a huge success with our customers and the experience will only be enhanced when we open the additional stores throughout the remainder of 2009.

We are currently over 90% at leased with close to 60% of the space already open. The only other redevelopments of significance are the Goody's conversion at our Mall at Johnson City, where we are adding a new 20,000 square foot Forever 21 to the center and the addition of our 50,000 square foot LA Fitness at Lloyd Center.

Both of these leases are fully executed and scheduled to open by year end. The construction complete and signed leases in place, we see minimal execution risk with respect to our redevelopment pipeline. As it relates to ground up development, construction of our Scottsdale Quarter project located in Scottsdale, Arizona, is moving along according to plan on budget and on time as we work towards a Phase I opening during the first half of 2009.

We are currently -- have 90% of Phase I retail addressed through signed leases or letters of intent. We are extremely proud of the line up and the overall selection of fashion, dining, entertainment that we offer to our guests.

Notwithstanding the inherent risk associated with development in this environment, we remain confident of our ability to execute on this unique opportunity. As it relates to liquidity, we have already addressed a $119 million of our mortgage loans that mature in 2009, leaving us with only $20 million remaining in the year. When factoring and available extensions, we have only two maturing mortgages in 2010 totaling approximately $80 million, both of which are non-recourse.

One mortgage is on our Mall at Johnson City, a center doing over $400 per square foot in sales, the other, on our Polaris Town Center, an institutional quality power center. Accordingly, we believe our near term mortgage debt maturities are quite manageable. In addition to these mortgages, the only other significant debt maturities that needs to be addressed by the end of 2010 is our $470 million credit facility, clearly, the most significant financing hurdle facing the company.

We are in compliance with all of the line of credit covenants as of December 31, 2008 and our 2009 projections keep us in compliance, thus providing us with the opportunity to extend the line of credit through the end of 2010. However, there is risk that if economic and capital market conditions significantly deteriorate, we could end up with pressure with respect to certain covenants within our line of credit.

Accordingly, we understand the need to address a longer term extension of the facility sooner rather than later. And that it will likely involve some delevering for the company. As we have discussed previously, the company is interested in opportunities to joint venture or sell a portion of its small portfolio to accommodate this goal.

We also understand, in the current market, it might be necessary to move up the quality chain to free up liquidity and would be prepared to do so at appropriate pricing levels. With the strong banking relationships we have forged over the years and our ability to service the company's outstanding debt for the foreseeable future, we remain optimistic that we will secure a longer term solution to our credit facility and a timeframe that makes sense for all interested parties.

We appreciate that the spotlight is clearly on our balance sheet at this point. We have significant challenges ahead of us, but we believe our relative smaller size and simple capital structure are clear advantages as we navigate through the current environment. We have one bank group to work with and are dealing with an issue in the millions of dollars versus the billions.

Before I turn the call over to Mark, there is one last topic I would like to discuss. Clearly, the dividend represents the source of liquidity that is under the company's control, enhancing our liquidity with a strategically sound step in this environment. Thus, we will be able to apply our January 15 of '09 dividend towards meeting our payout requirements for taxable income purposes in 2009; we have brought flexibility with respect to the level of dividend payments for the remainder of the year.

Any reduction to the dividend is a very serious action for us to take and since we typically don't declare our first quarter dividend until the middle of March, it is our intension to differ any decision on the level of distributions until that time.

With that said, I would now like to turn the call over to Mark to provide you with more detail on our financial results.

Mark E. Yale

Thank you, Michael and good morning. As Michael discussed, we reported FFO per share of $0.59 for the fourth quarter of 2008, falling comfortably within our guidance range.

We're also pleased that our full year 2008 FFO per share of $2.04, fell within our original guidance range issued at beginning of 2008. Excluding Steve & Barry's, our comp NOI growth for our core mall portfolio was down by approximately 2% for the fourth quarter, driven primarily by lower recovery rates in the fourth quarter of 2008.

Redevelopment activity within the portfolio contributed approximately 50 basis points of positive growth. I'd now like to review our guidance for fiscal year 2009. In our earnings release, we introduced our 2009 FFO guidance at a range of $1.85 to a $1.95. Key assumptions that make up the guidance included anticipated decline in core mall NOI of 2% to 3%.

The impact of the Steve & Barry's bankruptcy represents over a 100 basis points of the decline with the remainder relating to an anticipated decrease in occupancy and expected rent relieve concessions reflected of the challenging economic environment.

Projected growth is flat when considering the positive contribution from redevelopment. With aggressive cost management initiatives, we expect to see a modest decrease in G&A from 2008 levels. The anticipated level lease termination and outparcel sales income is consistent with '08 amount at approximately $3 million.

We are anticipating $4 million to $4.5 million of net fee income. Additionally, we are assuming an average LIBOR rate of between 1.25% and 1.75% for the remainder of the year. Finally, we expect to incur $30 million to $35 million in redevelopment and development investments including another $10 million on the Polaris Lifestyle project, primarily related to tenant allowances; $5 million on the Mall at Johnson City and Lloyd Center redevelopment projects that Michael discussed, and $20 million of equity contributions for Scottsdale Quarter.

We also provided FFO per share guidance for the first quarter of 2009 in the range of $0.42 to $0.46. Key assumptions driving the guidance include net fee income of approximately a $1 million, lease termination and outparcel sales income of $500,000 and a decline in core mall NOI of approximately 2%.

As Michael discussed, we've already addressed a $190 million of our 2009 mortgage loan maturities. We paid off the Great Mall loan in early January, primarily with proceeds from the sale of the property. Additionally, we are able to close on a $25 million mortgage loan on Grand Central Mall. For the period of six months after the initial funding, the loan amount can be increased to $47 million through additional commitments from lenders.

The $25 million of funds were applied to repayment of the existing $46 million loan with the balance of the existing mortgage paid using funds from the company's credit facility. Shortly, after closing on the loan the company sold an outparcel at the mall for approximately $5 million.

Additionally, the company expects to close next month on a $24 million mortgage loan financing on the companies recently completed Lifestyle addition at Polaris Fashion Place. Proceeds will be received in several fundings over the next six months as various tenant openings from (ph) projects and will be immediately applied against our line of credit.

Closing these loans at this time speaks volumes about company's standing within the lending community and the confidence of that community in our business plan and management team.

Finally, during the fourth quarter of '08, we formerly addressed our Eastland Charlotte Mall loan maturity. We've agreed to an extension of the loan with our operating losses capped during 12 month extension period. We will also assist with the marketing in the center. If the property is not sold by the September of 2009, the loan will be assumed by the servicer without any penalty or event of default.

Remaining 2009 debt maturities are approximately $20 million with the most significant piece down $18.2 million pro rata share of the mortgage on the Tulsa Promenade which matures in March. We are currently working with the lenders on an extension on this non-recourse debt.

With that, I would now like to turn the call over to Marshall.

Marshall A. Loeb

Thanks, Mark. As Michael mentioned, we are working through a challenging environment that's not gotten easier to begin 2009. The good news is that there are renewal pipeline we continued demonstrating the embedded growth within our portfolio. Quarter releasing spreads was 10% bringing year-to-date deposit of 15%.

We've also addresses nearly two-thirds of our 2009 renewals at rates consistent with our budget. With respect to bankruptcies and store closing announcements, we'll be keeping a close eye on activity throughout the next couple of months, but to date 2009 has been manageable. Difference this year, however, is the difficulty in replacing tenants as retailers are more cautious with respect to expansion plans.

Accordingly, our 2009 focus is tenant retention. We believe a good outcome will be holding occupancy in the low 90% range by year end. Our guidance assumes a decrease in mall store occupancy of a 150 to 250 basis points. Part of holding occupancy is strategically dealing with tenant rent relief request.

This has always been part of our business and we have a formal process in place to address the activity. In most cases no adjustments is required. But, when we have a retailer suffering and they're important to the center, we try to work with them. We believe we have included an appropriate accommodation in the budget for this activity.

On a positive note, looking forward the addition of new retail supply nationally over the next several years, appears minimal at doubt (ph). Having well located assets occupied in the 90 plus percent range will board well for our portfolio.

We are optimistic this will strengthen the position of our assets when retailers are ready to expand again.

Before I turn the call back to Michael, I want to provide an update on Scottsdale Quarter.

First, on timing we expect to open an initial phase of the three phase projects in the first half of 2009. Phase II follows in 2010 with Phase III which is not being developed by the companies delivered later.

Our partial list of retailers includes names such as Nike, Williams-Sonoma Home, West Elm, Gold Class Cinemas, a 36,000 square foot premium movie theater featuring gourmet, food and fine wines, H&M, and what will be their flagship Arizona store, Oakville Grocery, a Napa Valley-based gourmet grocer which has common ownership with Dean & DeLuca and an enticing lineup of restaurants, including names such as BRIO Tuscan Grille, StingRay Sushi and Martini Park; many of which will be new to the market.

Further not included in this list are other iconic retailers who signed leases in Phase I for flagship stores, but remained under confidentiality agreements through opening. With this retailer list, we project Scottsdale Quarter to perform at the top of our portfolio. Also over 90% of the Phase I retail and almost two-thirds of the total retail square footage in all three phases is spoken for either the signed leases, leases out for signature or letters of intent.

From an office perspective, approximately one-third of the office space in under lease with several proposals currently under discussion. As we continue signing leases, we'll update you with additional names.

I'll now turn the call back to Michael.

Michael P. Glimcher

Thank you, Marshall. And once again, these are unprecedented times with serious risks, especially, which will select the assets of liquidity in the short term. However, our portfolio is better positioned than ever to weather this turbulent economic environment and most importantly, with the proper team in place and a straight forward operating and capital plan, we remain positive regarding what we can accomplish as an enterprise throughout these volatile times and more importantly, provide growth in the years to come.

With that being said, we would now like to open up the call for any questions.

Question-and-Answer Session

Operator

(Operator Instructions). And your first question will come from the line of Nathan Isbee from Stifel Nicolaus.

Nathan Isbee - Stifel, Nicolaus & Company, Inc.

Hi, good morning.

Michael Glimcher

Good morning, Nate.

Nathan Isbee - Stifel, Nicolaus & Company, Inc.

Can you just talk a little more about your credit line covenants? I know you've never really given detail, but given that it is one of the main overhangs on the stock today. How close are you currently to the covenants and how much cushion do you have built-in assuming you've hit the low-end of your '09 guidance?

Michael Glimcher

Nate, all I can really say is we have considered adding our covenant disclosures to our supplement for year end and we've decided to continue with our current disclosure. It's an affirmative statement that we are in compliance and our forecast indicates we will remain in compliance through '09. There are always risks, what I can tell you is that we are incompliance as of 12/31 of '08 as we said expect to be based on our forecast through '09 and as it relates to our '09 plan is to be in a position to exercise the option and based on what we know today in fact from the extension fee to exercises built into your numbers, we believe that plan is feasible.

Our most restrictive covenants relate to leverage, recourse limits and fixed charges ratios and we are in compliance with each others based on our '09 plan and that's really all we can say.

Nathan Isbee - Stifel, Nicolaus & Company, Inc.

Okay. In your guidance you talked about expected $70 million to $100 million of credit line capacity at year end. Can you just talk about, you currently have about a $110 million. You're getting the Polaris, assuming you get the Polaris loan in the Grand Central Mall totally funded. How does that off flow through to your year-end guidance?

Mark Yale

Nate, this is Mark. I mean some proportion of getting Polaris fully funded and some sort of syndication on Grand Central obviously, there are some variabilities there and that's factored into the range of a $70 million to $100 million. We also have some accommodation wherein we are no where near close in terms of what the final outcome's going to be, but some type of partial pay down on Tulsa, so all that's factored into familiar (ph) riding in that $70 million to $100 million range.

Nathan Isbee - Stifel, Nicolaus & Company, Inc.

Okay and $70 million to $100 million assumes, does that assume the current dividend level?

Mark Yale

It's basically, once again part of that $30 million swing relates to various scenarios on the dividend.

Nathan Isbee - Stifel, Nicolaus & Company, Inc.

Okay. And just last question Marshall, can you talk, you mentioned those tenants at -- in Scottsdale. Can you talk about, has there been any fallout from tenants that originally signed or committed?

Marshall Loeb

There is not... no, no nothing firm. There is a couple that we are worrying about in terms of their financials. But that said, no official fallout, everybody that signed the lease, we're delivering the space.

Mark Yale

And I would add to that Michael. Every lease that we make today in this environment is difficult. It takes longer to procure, it takes longer to get signed and retailers are really rationalizing every opening that they do, but if retailers are cutting 50% or 70% or 90% of the stores, when you hear names like our flagship H&M store of 25,000 feet or Nike that opened very few stores, this is the kind of location that probably makes the cut for that last 10% of stores that you are opening.

So it really is, as we said in the prepared remarks, a special opportunity for the company.

Nathan Isbee - Stifel, Nicolaus & Company, Inc.

Okay, great thanks so much.

Operator

Your next question will come from the line of Ben Yang from Green Street Advisors.

Benjamin Yang Ben - Green Street Advisors, Inc.

Hi, good morning. Going back to the credit facility, the $70 million to $100 million that you expect in capacity at the end of the year, are you expecting the line to be downsized when it rolls, later this year?

Michael Glimcher

Ben, it's Michael speaking at first and then Mark can certainly add any commentary. Based on our ability to extend what's in place, we would assume extending based on the same terms at the same size with the same group. I think beyond the end of 2010, if you're talking about a broader line, I would assume with at that point you would probably look at an adjustment to sizing based on where it is today and where we believe market is.

Mark Yale

And that's what Michael talked about in the prepared remarks in terms of delevering and that's certainly our expectation in terms of a longer term solution on the line, it's going to involve that.

Benjamin Yang Ben - Green Street Advisors, Inc.

So despite the fact that you had to offer recourse and despite the fact that, I guess some of the banks have merged, you still expect the line to be the same size as it is today?

Mark Yale

No, no. That's what we're saying, we were expecting that we're going to need to delever and free up some capital up in terms of the long term solution on the line. And right now we are not anticipating that capacity is going to be up to $470 million, we're expecting it to be lower than that and where that is that the moving target is as the environment evolves.

Benjamin Yang Ben - Green Street Advisors, Inc.

Any sense on how much lower that's going to look?

Mark Yale

Ben, I don't know exact number. Again, I want to reiterate we do have the ability to extend the existing line with existing bank group on the existing terms through the end of 2010 and budget being in compliance and having that ability, I think beyond the end of 2010, we would look at resizing. It's great about the size of our enterprise is $50 million to a $100 million of delivering would have real meaningful impact on the balance sheet of this enterprise.

And if you think about a $100 million or roughly even $200 million, you could really recast our balance sheet. So when you look at the magnitude of issues and when you look at and you look at the same issues that we're dealing with, quite frankly are the same issues that many people within our sectors as well as real estate in general are dealing with.

Ours from that size standpoint are quite manageable on a relative basis and one thing that we're quite proud of is, if you get away from balance sheet which certainly is the most important issue today, the operating fundamentals and the performance of the portfolio occupancy is held up well releasing spreads have held up well. And we've been able to operate our properties efficiently. So we're feeling good about the portfolio and good about the team and hope that the capital markets will cooperate with us.

Benjamin Yang Ben - Green Street Advisors, Inc.

Okay, great. And then last question. You talked earlier about having a formal process in place when tenants come to you asking for rent relief. Can you just provide a littler more detail on what that process entails?

Marshall Loeb

Sure, Ben. This is Marshall. I mean we look at it probably taking a step back, globally our occupancy cost is 13% with target 14% and it varies by property, but we think 14% is probably a healthy number. So overall, we think our retailers outside today are at a healthy number.

We've had sales growth usually it's up five to seven year lease and we've had sales growth that we may have backed up from last year, but we have had growth early in that process. So most of the leases that are rolling we've probably had more push back on renewals and things in terms of locking in and may be say it was fixed.

We'll look at their occupancy cost which I think a huge help obviously for us and where are you, what's your occupancy cost, we'll ask for tenant financial statements, if they are not public for the last several years and then kind of work from there. And most cases again not I'd say, where you step back not every retailer is asking for rent relief. That's probably not some of the things we lead you with, but probably lead me to believe you would expect every retailer is asking for that release and that's not the case.

And then the majority really after we talk for a while, it really ends up without a relief request. And those that do we'll really work with them and if there are an important tenant what's a good payment plan for you and if you'll catch us up, if you bring us up to speed on your past due balances where we worked your release going forward.

So if that helps, that's kind of our process. We bring our accounting group. We have Rodney Obermeyer (ph), who runs our credit side. We'll sit down with him, usually couple of times a month with our Head of Leasing, T.J. Drought and we'll work through the process that way again.

I'm counting that Michael mentioned, maybe the nice thing about our size is we can be pretty granular on that and really go on a tenant-by-tenant basis if we need to.

Benjamin Yang Ben - Green Street Advisors, Inc.

And did you say earlier that you're budgeting for more release this year than you did in past years?

Marshall Loeb

Yes.

Benjamin Yang Ben - Green Street Advisors, Inc.

And can you quantify that is it two times more, three rimes more?

Michael Glimcher

I think that's a little tough for us to answer because then we have put in accommodation for rent relief and occupancy declines and those kind of go hand-in-hand. So we could have less rent relief if we decide to do that but maybe we will have a greater drop in occupancy.

So, I think it's tough probably based with the way we did the budget we went through space-by-space on what we knew at the beginning of the year. Obviously, we think that there is going to be some unexpected store closings and bankruptcies and rent relieves. We put some accommodation in there for that and did our best to allocate between occupancy and rent relief, but that not an exact sign.

Benjamin Yang Ben - Green Street Advisors, Inc.

Okay, thank you.

Marshall Loeb

Welcome.

Operator

Your next question will come from the line of Louis Taylor from Deutsche Bank.

Louis Taylor - Deutsche Bank Securities

Hi, thanks, good morning guys. Can you guys just talk a little bit about the Grand Central Mall kind of loan increase, is it a bank group or insurance group that funded the loan?

Michael Glimcher

It's a bank group, Louis. It's really a lead bank in one participant that are involved and as we speak working on the syndication of that.

Louis Taylor - Deutsche Bank Securities

Okay, the next question is on the Tulsa loan, is it $20 million, $25 million number that you referenced? Is that your share or is that your expected total loan about there?

Michael Glimcher

That's the expected the loan amount for the venture?

Louis Taylor - Deutsche Bank Securities

Okay and then last question in terms of December, your lower sales in '08 versus '07, you had declines in number of malls, but you had some increases in others. Can you just talk about the malls with that sales increases kind of what growth that was it iteration or occupancy changes or just some of the local markets just doing a little better than others?

Marshall Loeb

I'll start on that, Louis. This is Marshal. Probably don't -- the biggest increase was our Jersey Gardens. That center has been a good center that just continues to get better. I think one of the things that helped it last year maybe were some of our others were simply that the tourists. It had the tourist mall and so the weak dollar and tourism, the U.S. is on sale.

So it's done well. Ashland, we've done our renovation there. We have a new JCPenny that is doing well and then inline stores, so that that mall did well. Morgantown was another one that increased. We have a new kind of really mix of stores. We have got -- I'll give credit to our leasing team kind of reworking the mix. There are Grand Central, there is all that's the same, newly renovated Bath & Body and Victoria Secrets, things like that.

So that's primarily the ones I think that middle tier market through the other thing is really lower gas prices helped those malls more than say the impact of Wall Street in New York and some of the major markets.

Michael Glimcher

Louis, this is Michael. I just want to add, a lot of our smaller market malls that we call it more bond like that we haven't had this big swings and in the good year, but they don't have the big swings backward and the arena years. So some of the malls like what we've talked about with Ashland and like what we've talked about in a Grand Central Mall which was a good performing mall.

These are the stable steady performers that don't have big swings and quite frankly, New Jersey was up in the double digits and it did performed very well and had it not been for some pretty tough weather up in the Pacific North West, I think the whole overall portfolio would have performed even better.

So, not to say that we have the best performing portfolio in the entire sector, we have a really solid stable performing portfolio and when you look at the fact that we generated $60 million from free cash flow before distribution to the common shareholders in '08 and we're generally close to same in '09, it's really perplexing to think that our total equity value is at that same level. It's a solid portfolio that's soling up solid on numbers.

Louis Taylor - Deutsche Bank Securities

Great. Thank you.

Operator

Your next question will come from the line of Alex Holiday (ph) from Royal Bank of Canada.

Unidentified Analyst

Hello everyone. How you are doing?

Michael Glimcher

Good. Good morning.

Unidentified Analyst

Okay. In regards to JV, how far are you long in the discussions on that? And will it be with initial partners, the existing partners or new partners?

Michael Glimcher

We're currently talking to interested parties and institutional type investors. We are in dialogue. As you see and there's been no activity in the marketplace. You haven't seen any transactions. I think there's still a big disconnect between buyers and sellers and really not a knowledge of where pricing is going to be and as we stated in the prepared remarks, we would only transact if it made economic sense and if the pricing was correct.

So, we're in dialogue, we're in dialogue and in pretty deep discussion with the right kinds of parties at the appropriate levels. But, we believe it's still going to be sometime before and not just in the case of Glimcher, but in the market in general we just haven't seen any assets move.

Unidentified Analyst

Okay. And now switching to the financing side, have the talks with loan officers improved this year versus say late last year?

Mark Yale

I wish I could say they had. Alex (ph), this is Mark. But I don't think things have improved marketably and that's something where it's just got to roll up your sleeves and you're talking to a lot of institutions you might have not talked to before. But it's hard to say, there is a dramatic improvement, I don't think it's essentially gone backwards either, but its still lot of work.

Marshall Loeb

I think the positive there is that some these regional banks do have capacity when you look at Morgantown refinancing, we got it done at the end of last year or the Grand Central refinancing, there they are small institutions who do have some lending capacity and at our size, again our size being competitive advantage we're able to meet with them personally and spend the time to get some of these loans done really as we said we've addressed about a $120 million, $119 million with a only about $20 million left to do this year.

Unidentified Analyst

And now with regard with the Grand Central, I guess you're waiting on the one participant to sign on, is that pretty far along right now?

Michael Glimcher

It's actually a group of participants.

Unidentified Analyst

Okay.

Michael Glimcher

We've been having ongoing dialogue and I think one of the challenges for that was the maturity date on Grand Central is the February 1st, hard maturity and I will tell you in this market, everyone's moving a little bit slower and that would have been tough even in the good days to deal with the January, early February maturity just because you loose so much momentum with the holidays. But we were able to close and we're pleased that we closed with the lead bank and one participant and we have about four or five other banks looking at the opportunity and we're fairly far along in the dialogue and that will continue over the next couple of months. But we do have up to a six months to get it syndicated and we're optimistic cautiously based upon what we know that we'll get a chunk of that done.

Unidentified Analyst

Okay. So it's a fair assumption we'll get somewhere between the 25 and 47?

Michael Glimcher

That's correct.

Unidentified Analyst

Okay. And regard to the Scottsdale leasing, how much of that 90% is actually signed?

Mark Yale

How much of the Scottsdale is actually signed?

Unidentified Analyst

Yes, of the Phase I.

Mark Yale

85% of Phase I.

Unidentified Analyst

85?

Mark Yale

Yes.

Unidentified Analyst

Okay. Thank you, guys.

Operator

(Operator Instructions). Your next question will come from the line of Michael Bilerman from Citi.

Quinton Falelli - Citigroup

Good morning. It's Quinton Falelli here with Michael Bilerman. Just in relation to the delevering strategy, I think you said that you're wiling to move up the quality loan in terms of asset size? Just wondering what asset (inaudible) it could be Jersey Gardens or Polaris, for example and whether you've actually gone and marketed these assets at all?

Michael Glimcher

Quinton, it's Michael and I appreciate the question. I don't know how broadly Mark, that we talked to a select group of institutional quality investors. I think if you talk about assets, like our top tier assets like Jersey Garden, like Polaris, most of those assets are bigger assets actually have really attractive debt in place. They've got term, they've got lower rates. So, while you prefer to start towards the bottom of the portfolio and work your way up, I think in the spirit of wanting to delever and add appropriate pricing levels, if you look at perhaps doing a JV within asset or couple of assets, you could really address all of your capital needs for the enterprise.

So, what centers (ph) to our first choice, I think we recognized where the market is and what types of assets people are looking at. So, I think anything is open for discussion if it makes sense and if after the transaction, the balance sheet looks better. So, I want to quantify, it would be chasing the right asset at appropriate pricing to have an impact on the balance sheet in a positive manner.

Quinton Falelli - Citigroup

And just in terms of your, back to the covenants again. I know your agreement says that there's a 65% debt, I think it's 1.75 fixed charge. I guess I'm just a little confused because we've calculated that you're very close particularly to the debt one (ph), but obviously the calculation methodology is quite complicated. I just didn't quite understand why you can't disclose exactly where you are on those covenants? And what the stresses are for you to actually bridge those covenants?

Marshall Loeb

Well, I think when we answered the question previously, we said all we were really prepared to say and I'd said we were in compliance as of 12/31/08 and that our business plan keeps us in compliance throughout '09 giving us ability to extend mid '09 and we built the expense of the expansion fee into our models. So we're really not going to comment any further on that.

Quinton Falelli - Citigroup

Okay. Alright, thank you.

Michael Glimcher

Thank you.

Operator

That does conclude today's question-and-answer session. I would now like to turn the call back over to Lisa Indest for closing comments.

Melissa Indest

Thank you everyone for participating in the Glimcher Realty Trust fourth quarter conference call. You may contact us directly with any additional questions or access our filings through glimcher.com.

Operator

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a wonderful day.

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Source: Glimcher Realty Trust Q4 2008 Earnings Call Transcript
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