Going to ICSC?

I am finally taking the plunge.  I just registered for the ICSC conference in Las Vegas in May. Yup -- my first visit to RECon!

They are saying that registrations are up 15% from this time last year, and it'll be interesting to see how many people show up. I know a few people who are making some last minute decisions to attend and I hope they will all show up.

In any event: I am hoping there may be a tweet-up on Saturday night or Sunday for those of you who use Twitter (@DirtLawyer, in case you did not know). The Hard Rock has been suggested as a venue.

I would really enjoy meeting up with my fellow real estate pros, whether we've met before, traded emails or phone calls or heck, even if we've never had any contact at all. (I will admit that I like knowing that someone is actually reading what I have to say.) I can be reached at dstejkowski (at) stejlaw.com and I will keep my BlackBerry handy if anyone has a little free time.

Hope to see you in Lost Wages!

Finding their way

This article and podcast from John B. Levy is a few days old, but it really makes a great point in my opinion.  He says that lenders are finding the right mix and that is what is causing an increase in loan activity, including even some CMBS loans. Yes, the LTVs are low and the rates may be -- well, they are what they are -- but there is activity.

My take? Time heals most wounds. No matter how much private or public intervention there may be (TALF, schmalf), lenders and buyers had to sort through this whole market and find a middle. There are signs that the middle is actually being found in a few deals, and you are finding deals with mezz debt and equity replacement coming in to make up for lower LTV loans and reduced equity in properties.

I also agree with the conclusion that we are nowhere near from being out of the woods.  Banks are still having problems, especially at the community level. We've gone from a dead stop to some movement. Full steam ahead? Not yet. But to continue the maritime analogy, the steam is hopefully building so speed can be increased.  I just hope we do not go back to the flank speed we were at a few years ago for the rest of my career. We've seen that and hopefully learned our lessons. The cowboy mentality that I sometimes saw at the the height of the market was just no fun, at least not for this dirt lawyer.

So what next? We watch and we negotiate and we see what I think will be some complex deals go down. They ought to be interesting to watch and, in hopefully a few cases, to participate in them. And of course this will be a market by market recovery. Don't just expect the spigot to open this morning. Phones ringing and emails flying are always my first clue. And that will be a welcome sight and sound for most of us.

Old Cook County Hospital - Saved!

As regular readers know, I like it when old buildings can be rehabbed and reused.  So it comes as no surprise that I am happy to see that this is going to happen with the old Cook County Hospital, "a Beaux Arts gem" that will be converted into offices.

Christina Lee has put together a very nice piece on the rehab project for McGraw Hill's Engineering News-Record that you can see hereI'm interviewed near the end of the piece; fortunately she had a wide angle lens. :)  So if you will excuse me, I am getting back on the treadmill.  Have a great weekend!

Count de Monet....de MONET....

Sorry but I cannot resist the somewhat obscure reference to Mel Brooks' History of the World Part I.  But Mel was right and Harvey Korman was wrong: it IS Count the Money.

And that's what William Ackman and Pershing, and the folks at Fairholme are doing by offering a combined $6.5 billion equity infusion. (Here is the press release.) As major creditors and shareholders, I guess they "value" company at $15 per share, meaning they see even more room on the upside.  Of course, for Ackman, who resigned from the Board as a result of this offer, I cannot even count how much coin he stands to make, as he bought at the bottom. I also thought I read that Ackman valued GGP at more than $15 (see this analysis from last month, e.g.)

Who makes the next move? And what will it be?

The GGP hearing?

I might have shown up at the GGP hearing had I known everyone and their mothers would be in attendance. But I have a policy of not working on Wednesdays unless necessary, and my wife and I had some places to go and people to see.  In any event, I am not going to bore you all with a rehash of what happened. Go read Jay Rickey for the news on the GGP hearing. For now, it looks like due diligence city for the bidders and any new people that pop in, be it Vornado or some other players.

So it is a war room...or a data room?

I suppose technically you call a company's internal room regarding a deal a war room and a target company's room where due diligence materials are housed a data room. In any event, GGP may have so much stuff that you will need a physical location where bidder can go. At least that is what Crain's reports. And, not shockingly to me, word is Vornado may join the fun too. This could lead to Rodamco North American redux. And is this the sign we need of a turnaround?

I'll try to write again after stories come out of the bankruptcy hearing.

The Market Abhors a Vacuum

Yes it does. I would argue that the recession we are in is at this point a matter as much as of uncertainty as anything else. No data, no confidence, no certainty.

And that is what David's Simon's latest complaint is on the GGP deal. According to this post at Traffic Court, they've signed the NDA but are not getting any data. No files, no war room access, no nothing?

You can't get a deal done without due diligence. People scurrying around looking at malls and leases and title policies and abstracts and environmental studies, and preparing summaries for the bigwigs to chew on about the risks of a given property.  I could go on all day, having been in a few of these clusterbombs over the years. (The one nice thing is that these days the due diligence materials are usually put into a secure online site, whereas in the old days you had to travel to the HQ and pore through boxes upon boxes and drawer upon drawer of junk in what is usually called a war room.)

We know one thing: GGP management is not keen to Simon buying the company. So let's just say the lack of war room type materials is not exactly a shock. Now I haven't looked to see what GGP plans to do other than some kind of auction, I gather, but perhaps everything will start to coalesce after tomorrow's court hearing on the reorganization plan.  (We do know that GGP plans to relist itself at the NYSE.)

PS: Here is a Reuters piece about the whole process  -- apparently a 60 day due diligence period for the bidders -- and what people in the know are saying about the company and the deal.