2houndz

Seven Key Points From Simon Property Group's Q408 Conference Call

SharonW - What an excellent comment. Everything about SPG's conference call was an attempt to direct listener's attention away from the elephant in the room which was bashing the place to smithereens.

As a worthwhile investment, this stuff is done. Kimco is probably the best retail REIT out there and even they were crushed.

Seven Key Points From Simon Property Group's Q408 Conference Call

This business model is toast. Investors made a lot of money on the retail REITS a few years ago and appear to be waiting for the opportunity to get back in because their past success proves that these operaors are really smart.
No it doesn't. They grew their businesses exponentially using unwise leverage during a time when cap rates were moving 350 basis points in their favor. They couldn't screw it up back then.

Hurray for those who rode the stocks up, but while they were laughing all the way to the bank, the ground was eroding from underneath the business plan. Know when to say enough is enough and focus on non-retail for awhile or at least some company that isn't saddled with these malls.

So Long Circuit City

They are possibly the worst retailer on earth, and one of the worst-run companies as well. One only had to walk into their stores and look at the design to realize Circuit City had no idea where to focus or what they wanted to represent and to whom. Miserable customer service, unfocused advertising, weak presence..... They literally gave their customers to Best Buy.

This is not a sign of the economy, but creative destruction of a weak player. The economy just moved it along a bit faster. Good riddance.

Now what are the REITS going to do with all those vacant stores? Probably add them to the vacant list of other lousy retailers who are soon to follow? I'll make the call that Dillard's is Chap 11 by Labor Day. Anyone want to call over or under on that one?