Taubman Means Unrivaled Luxury At A Deep Discount

Jun. 18, 2019 7:02 AM ETTaubman Centers, Inc. (TCO)74 Comments


  • Taubman has enhanced the footprint of new retailers throughout its portfolio by replacing formerly prominent tenants with high-productivity retailers.
  • In terms of Taubman’s “terrible track record,” let me provide “proof” that management is delivering shareholder value.
  • We are upgrading Taubman to a Strong Buy.
  • This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Get started today »

Have you noticed? It’s very difficult, if not impossible, to haggle over the price of a luxury product.

Case in point, I bought my wife a Land Rover a few years ago. When I approached the dealer to try to negotiate, my attempts were slapped right down.

I distinctly recall attempting to knock a few hundred off the sticker price. (Just a few hundred!) But the salesman told me plainly, “We don’t negotiate on the price.”

OK then.

More recently, I was in a Rolex store in Las Vegas, where I was interested in buying a new watch. I’ve always wanted a Rolex, so I thought I would try to use my negotiating skills to chisel a few hundred dollars off the price.


Similar to the Land Rover experience, I was stopped cold by the salesperson with the same six word. “We don’t negotiate on the price.”

Even so, I was taught growing up that you never know until you ask. That’s why I’m still more than willing to keep searching for bargains among the high and mighty.

And guess what? That fits the current situation with Taubman Centers (NYSE:TCO) to a luxury-brand T.

A watch on a persons armDescription automatically generated

(photo source)

Taubman Is the Luxury Play in Retail

Taubman Centers was founded in 1950 – over 68 years ago – and is the first publicly-traded company to UPREIT as an IPO in 1992.

It may be smaller than its closest rival, Simon Property (SPG), which has a market cap of around $90 billion. But Taubman Centers, complete with its $10 billion market cap, has the highest-quality mall portfolio in the U.S. (TCO’s net equity at today’s prices including preferred is nearly $4.5 billion).

Today, the company owns, manages, and/or leases 27 regional, super-regional, and outlet shopping centers in the U.S. and Asia. Its portfolio of U.S. shopping centers are located in major

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This article was written by

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Leader of iREIT on Alpha
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Brad Thomas is the CEO of Wide Moat Research ("WMR"), a subscription-based publisher of financial information, serving over 15,000 investors around the world. WMR has a team of experienced multi-disciplined analysts covering all dividend categories, including REITs, MLPs, BDCs, and traditional C-Corps.

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He is the #1 contributing analyst on Seeking Alpha in 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, and 2022 (based on page views) and has over 108,000 followers (on Seeking Alpha). Thomas is also the author of The Intelligent REIT Investor Guide (Wiley) and is writing a new book, REITs For Dummies. 

Thomas received a Bachelor of Science degree in Business/Economics from Presbyterian College and he is married with 5 wonderful kids. He has over 30 years of real estate investing experience and is one of the most prolific writers on Seeking Alpha. To learn more about Brad visit HERE.

Disclosure: I am/we are long SPG, TCO, BPY, TCO, SKT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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