ICSC Day Two Mid-Day Thoughts

There is a lot of activity in the halls today and people seemed very deal focused.  Appointment schedules are booked up and people I was hoping just to say a quick hi to are too busy working deals.  I am glad to see that of course.  Since I am a newbie it is hard for me to say how attendance is but it sure looks okay to me.

Although I do not agree with him on some issues, Robert Reich gave a pretty good, entertaining and witty presentation this morning regarding his thoughts on the economy.  You can read my Twitter feed for the details.  Now, he is a policy wonk, so comparing Reich's speech to Palin's would be unfair.  But apparently some people think I am a pinko Commie for daring not to like Palin's speech.  That of course makes me chuckle; you can read a response to a comment if you are into the political thing.

There's another good round of cocktail parties and the like tonight, but I plan to pretty much be done by 5:30 or so, as I plan to have some family time and then take off from Las Vegas tomorrow morning, perhaps after one last short visit to the convention floor.

If I have more to report, such as activity from the Tweetup, look her or, again, on Twitter.  Hope everyone is having a good convention!

ICSC RECon Day One - Thoughts and Impressions

Just got back to our house (rather than stay on the Strip, we decided to rent a private home) from the first day of the ICSC RECon in Las Vegas.  Keeping in mind that I am a first timer, here are some initial impressions.

Thank goodness for the cool weather.  That made walking miles and miles easier.

The morning breakout sessions were even better than I thought they would be.  The panel on workouts gave good, practical advice for dealing with lenders in a variety of distressed situations. I learned some things I will use and I will also probably study up more and blog about what additional things I learn.

The legal special interest group session was also good with practical advice from in-house folks.  Some of the advice was fairly obvious -- keep in touch, let us know about changes, bill regularly and with sufficient detail.  The best advice I think was this: don't buy me lunch - make me want to use your firm.  I was somewhat miffed -- perhaps wrongly so -- by a large firm lawyer saying something like, "You can't compete with the guy working out of his house on price, so you have to develop expertise or make yourself stand out in other ways."  It made me feel cheap, until I learned my billing rates were higher than large companies want to pay for commodity work (not that I really do a lot of that).  It seems like law firms are racing each other to the bottom on hourly rates.  I will not do that. I charge a fair fee, be it hourly or an alternative fee arrangement; I work quickly and efficiently and make the client look good, thus adding value.  So I am comfortable with what I do, and I cannot remember the last time a client complained about my bill.  Like I say: try me once and you will not be disappointed.

Speaking of disappointment, let's talk about the keynote address from Sarah Palin.  In short, it was a standard stump speech with a few superficial comments about shopping centers and retail real estate.  It was awful and a borderline train wreck in my opinion.  All Palin had to do was add in a paragraph about the pending disaster of carried interest and she would have not only won over the crowd but gotten significant fundraiser cash from the industry if she runs in 2012.  As it stands, I do not know if she knows what carried interest is.

As to deal making: I am a first timer, so I cannot imagine a larger hall.  There was buzz in the smaller (but still HUGE) facility.  Some booths were empty and others were packed.  I chuckled at the fact that Burger King and McDonald's were right across from each other, as were CVS and Walgreens.  If you want a veteran report on the day, check out other bloggers.  The always excellent David Bodamer comes immediately to mind.

Some other random thoughts:

Commercial real estate is very white male dominated and very red meat.

Sex. Still. Sells. Period.

One easy way to spot RECon veterans from newbies: shoes. Newbies wear stylish shoes; how you walk three or four or more miles in a day wearing tight lace-up shoes, 5" Louboutins or Pretty Woman boots is beyond me.  Vets wear comfy shoes; my friends warned me of this so I showed up prepared.  I nevertheless picked another pair of comfy shoes for tomorrow on my way home.

There seemed to be a lot of optimism on the deal floor.  But remember we CRE people tend to be eternally optimistic.  The direct operation booths were more crowded than broker booth.  GGP was packed, I am happy to say.  I did not get to some other major booths today.

Kudos to LoopNet, which rolled out a new low-cost property information service today.  The marketing staff was kind enough to give me a tour of the product and I liked it.  I made one recommendation and offered to do a little testing of the site.  I plan to write more about the service after I have played with it a bit.

Tomorrow I will be attending the Dealmakers Magazine Tweetup at their booth; I hope to see you there.  I will probably not be at the show at all Tuesday; if I make it I will just stay for an hour or so that day and leave for my vacation.

That's all for now.  More tomorrow!

California land use and climate change

Just when you thought land use regulation in California could not get any trickier, along comes this.

By way of reference, I started my career in California working with the California Environmental Quality Act, better known as CEQA.  I haven't stayed current with CEQA, but I can tell you that complying with it can be a veritable minefield for a developer. Groups and people, whether well-intentioned or not, can hold up a project for years or even stop it entirely for more reasons than I can count.

Now you can add another mine to the field: curbing greenhouse gases. Municipal planning organizations can conflict with local plans, and then you have possible inconsistencies with general plans, specific plans...I could go on for an hour and I am not even a expert in this area at all.  It will be a field day for lawyers, though!

It isn't clear how this will all play out, but what is clear that uncertainty will be in the market.  And we all know how much investors like uncertainty (not). 

My ICSC Agenda

Yes, I am a first-timer at this year's ICSC conference.  I'd been planning to go for years now, but family commitments always stood in the way.  So this year, I'm taking them with me! 

If you want to meet or talk about dirt or anything else during the conference, please feel free to email me at dstejkowski (at) stejlaw dot com, or via at Twitter at DirtLawyer. (Sorry, I want to try to do something to avoid you know what.)  I will be attending the Dealmakers Magazine Tweetup on Monday at Booth S283 Q Street.  I will also be at a LoopNet function on Sunday to see what they have going.  And Sunday morning I plan to attend the legal special interest group function.  I know I have a bunch of other things going on, but of course I do not have my agenda with me while I am writing.

I'm looking forward to meeting many of you, so don't be shy!  Here's to a great RECon.

It's best and final time

I remember the first time I heard the term "best and final" as a lawyer. My client was trying to lease space to the federal government and the contracting officer asked for best and final offers.  It was as if all the previous negotiating was just a game.  And maybe it was.

And maybe it is with the GGP saga.  Simon has said its latest $20 offer is best and final and that it would walk if a bankruptcy hearing goes forward today as scheduled. (Is that true? Your guess is as good as mine.)  They also upped the recap offer by a dollar.  We should know more about a postponement very soon, and I will tweet that information once it is known.

What I find interesting in the story is, almost predictably, buried in the penultimate graf: "The two sides have also been working to put together merger documents so they are ready to go should a deal be reached, the source said."  We all knew or assumed the due diligence was basically done, but M&A documents take time and a lot of money to negotiate and put together.  So obviously there is some teeth to all this if the source in the story is in fact correct.  Lawyers are not cheap and M&A agreements are not short.

One way or another, this should come to an end soon.  Simon supposedly has all its cards on the table and the Brookfield offer expires next week.  That low-slung block of a building on North Wacker is either going to be very happy or somewhat disconsolate -- depending on what the board decides to to -- pretty darn soon.

UPDATE: This report says that GGP is expected to ask the Brookfield recap be approved by the court today.  I think independence has always been in the mind of the company and the Brookfield offer keeps the doors open on Wacker. 

And the pot is sweetened as follows: "William Ackman's Pershing Square Capital Management, which has committed to invest in General Growth alongside Brookfield, agreed to forgo its interim warrants, reducing the overall package by 14 percent."

What the heck. Ackman bought into GGP at what price? I think he can afford this concession.

Anti-climax of the day: Simon wants it all

So, Simon is now apparently at a bid of $18.25 for all of GGP.  We are right back where we started from, just at a higher price. Did anyone seriously think anything else was going to happen? While I obviously don't know the story (I am not a reporter, just a blogger), I do know this: If I were representing a buyer, I would have suggested a partial buy in to GGP as a potential means of getting the assets I want.  After all, who wants your competition breathing down your neck?But if that does not work -- and it won't -- go back to the jugular.

And gee, guess what? Simon is willing to divest up to 15 million sf of malls to make the deal happen and get over any anti-trust concerns. That means they can buy the company, sell off the assets they probably did not want anyway and keep the trophies. Sounds like a good plan to me.

Metz and Co. of course want to run their own show, so they are going to rely on their recap plan to win the day.  Obviously none of us know how this all plays out but do not be shocked if GGP does recap the company, but after selling a bunch of malls to Simon.  Win-win?  Maybe.

Here we go with carried interest again

Originally we thought it was over. Wrong. It looks like the whole carried interest debate is back. Like a cheap pair of sunglasses, it just won't go away.  They are even trying to plug ways around it now; call me silly but I would rather spend time doing deals than working out complicated tax law solutions. 

I wrote about this topic almost three years ago, and I have done so on other occasions. You can look here and here for some other thoughts. It is not something I like seeing just as signs of life are showing in the market and hopefully in development to boot.