Wednesday, October 29, 2008
I just had to check. The REIT had a debt ratio of 63% at December 31, 2007 based on property cost less reserves. Unless some debt was paid down this year this ratio is going to be higher with sofening commercial property values. This debt ratio is higher than many of the other non-traded REITs. From year-end December 2007 it had Funds From Operations (FFO) of $.64 and paid a dividend of $.63. I did not check to see what FFO and distributions have been in 2008. Investors' request for redemptions and Inland's response makes sense.
Inland went full-cycle on its two public non-traded REITs that preceded Inland Western. The first, Inland Real Estate Corporation (IRC), was listed on the NYSE and the other was sold to Developers Diversified Realty (DDR). Both transactions allowed investors in the two REITs to sell their shares at prices higher than the orginal offer price. It is my opinon that an IPO for Inland Western looks remote at best given its debt ratio and the status of the market. Things may change in the future, but today, investors in Inland Western should have a long time horizon.
I just checked Inland Western's property list and see that it owns twenty-five Mervyn's in California and Texas (two properties). Mervyn's is closing all its stores after Christmas. Inland Western bought the twenty-five properties in what looks like was a portfolio acquisition in September 2005. This acquisition occured after Mervyn's was sold by Target to two private equity firms. Somehow I don't think that Inland Western got a discount on its acquisition.
Inland Western lists 335 current properties, so the 25 Mervyn's account for less than 10% of the portfolio (there is no data on what percent of revenue they comprise). I know several of the Mervyn's locations in Southern California, and while in solid shopping centers, they are older, in need of some renovation and no longer the best location in the immediate retail area. Ten of the Mervyn's locations are in California's Central Valley that has been hard hit by the housing slump.
Tuesday, October 28, 2008
It filed an 8-K today stating that its quota for redemption requests for 2008 has been met and no further redemption requests will be honored in 2008. The 8-K went on to state that Inland Western REIT is suspending its redemption program indefinitely. What did this real estate investment trust buy, the Hotel California ("you can check in anytime you like, but you can never leave")? Seriously, the decision to indefinitely suspend redemptions will have an impact on Inland American REIT's capital raising efforts.
A hedge fund, Pershing Square, is interested in buying Target. Here is a quote from the Bloomberg article:
Pershing, which controls almost 10 percent of Target's stock, will discuss a deal that ``will be of particular interest to investors and analysts focused on retail, real estate, fixed income and credit,'' according to a statement today.
Ackman (runs Pershing Square) has pressed Target executives to buy back shares, sell the company's credit-card unit and extract more value from its real estate holdings. Target announced a $10 billion share repurchase program in November and sold almost half of its credit-card portfolio to JPMorgan Chase & Co. for $3.6 billion earlier this year.
Part of me is glad that some form of business is happening in this market. But I look at private equity and hedge fund retail forays and it has not been pretty. Mervyn's and Linen & Things are going dark, and I suspect other once-public retailers will follow suit. I just don't see the benefit of financial engineering the retailers. Retail success comes down to good management and good locations that can drive strong sales, not balance sheet reconfiguring. Target competes well with Wal-Mart. I'd be scared if I was a landlord and had Target as a tenant.
Monday, October 27, 2008
This has nothing to do with finance or alternative investments, but I find it cool that another solar system may exist. It's from a star, Epsilon Eridani, that is not even that far - about 10.5 light years or 63 trillion miles - from our solar system.
Friday, October 24, 2008
"I am shocked, shocked to find gambling going on here" is a famous line from Casablanca when Claude Raines' character, Captain Renault, shuts down Humphrey Bogart's Rick's American Cafe. Of course it was obvious that gambling was going on, Rick's was part casino. This line reminds me of the market since the Credit Crisis ebbed. The market somehow is surprised by events that are so obvious. It is obsessing that a global recession is either coming or already here. The bigger shock would be no recession. The credit markets essentially stopped in late August. For several weeks there was the real fear that the entire global financial system would collapse. Even the best corporate credits had difficulty accessing the credit markets. And consumers hit by the barage of bad news and declining stock portfolios are scared and scaling back purchases. How can this not translate to a slowing broarder economy. This is common sense.
Today the fear was hedge funds imploding. Hello! It's a miracle more have not blown up yet. Most hedge funds use leverage (how else to maximize manager fees) and we all know what happens to debt ratios and margin calls when equity evaporates. This should not come as market shaking news. Hedge funds are going to collapse, it's only a matter of time. This news needs to be priced into the market.
Update: The unemployment rate is going to shoot up. I read that Rhode Island is already at 8.8% unemployment. The market will be shocked by the pending bad news, but it should not surprise anyone.
Update Update: I saw this morning that the Wall Street Journal also used a Captain Renault reference last week. The Real Time Economic blog used it to describe Alan Greenspan's testimony before Congress and his comments about trading in the mortgage market. False indignation does not seem in short supply.
Friday, October 17, 2008
Mervyn's will close all its stores after Christmas. Mervyn's was sold by Target to a private equity firm in 2004. Mervyn's filed for bankruptcy protection last summer. This, obviously, is a negative sign for west coast retail real estate.
Wells Timberland REIT has struggled under the weight of its massive debt. Until the debt gets repaid it will not be able to acquire any more timber properties. Investors in Timberland have an investment that for the foreseeable future is a highly leveraged and non-diversified. I am stating the obvious in saying that in a deleveraging economy is not an ideal position.
Much of my focus has been on Timberland's mezzanine debt and not Timberland as an investment. Does Timberland make sense as an investment? I am not sure it does. Even if the mezzanine loan is paid on schedule, Timberland will still have a sizable debt load and only one property. Timberland has a $212 million senior loan that is due 2010 and $42 million of preferred stock. I don't see Timberland acquiring additional timber properties until this debt is repaid or refinanced. I don't see any distributions to investors until Timberland's debt load is reduced. More properties that will diversify the portfolio and cash returns to investors are not in Timberland's near-term future.
The risk / reward ratio of Timberland is heavy on risk and light on reward. It has one property, and as noted above, it will likely be a long time before another property is acquired. The lone property was so expensive it will remain the 800-pound gorilla even if additional properties are acquired. An investor would have to look long and hard to determine whether this investment is appropriate and fits in their portfolio.
Thursday, October 16, 2008
Wells Timberland REIT filed its 8-K late today and it has received an extension on its mezzanine financing that had a large payment due today. The loan has been extended from March 2, 2009 to September 30, 2009. The principal reduction payments have also been modified. The next payment is due December 30, 2008, and the principal needs to be reduced to $67 million, then on March 30, 2009 it needs to be $45 million and on June 30, 2009 it needs to be $25 million and any remaining principal is due September 30, 2009. The interest rate did not change and stays at 11%, up from the original 9%. The balance on the mezzanine loan at October 15, 2008 was $81,857,312. Wells Real Estate Funds, as part of the negotiations, agreed to pledge its preferred stock in Timberland as collateral and agreed to pay a fee of $127,500 and give Wachovia 600 (1,000 per share that accrue 8.5% interest) preferred shares in Timberland.
Timberland dodged a bullet again. I see no sign of any German capital, and due to the Credit Crisis I'd be surprised to see any sizable German equity. Timberland is raising $8 million to $10 million per month. At this rate, it looks like Timberland will be able to meet its obligations under the new terms without any additional, outside capital.
Wachovia extracted more than its share of pain for this extension. The 11% interest is high and the preferred stock Wells had to give, basically came out of Leo's pocket. I will post more on my thoughts on Timberland later.
The Wall Street Journal has a story this morning on Fannie and Freddie. The article states they are not innocent in the mortgage mess, but not the lone culprit either. This quote sums up my opinion:
It's important to note that some of the pressure for Freddie and Fannie to lower its lending standards came from banks that were underwriting the loans Fannie and Freddie acquired. The article notes that the mortgage giants' political clout grew as its assets grew. For many years the two companies were too big to fail and this market proved that.
Fannie and Freddie do share some of the blame for the mortgage and housing bust. They recorded a combined $14 billion of losses in the 12 months ended June 30, largely because they lowered their credit standards and purchased or guaranteed dubious home loans.
But "they weren't the leaders in lowering credit standards," said Andrew Davidson, a mortgage industry consultant in New York who has done work for Fannie and Freddie and also criticized them for taking excessive risks. He noted that the worst-performing mortgages are those that were originated by subprime lenders and packaged into securities sold by Wall Street, rather than by Fannie and Freddie. And while loans for low-income people -- programs championed by Democrats as well as many Republicans -- have contributed to Fannie and Freddie's losses, they aren't the biggest part of the problem.
The VIX volatility index was over 81 this morning. There is no wonder why I have had a pit in my stomach for six weeks. The VIX typically trades around 20 or below. When it gets to near 30 stocks are getting wild and at the bottom of the market's drop in 2002 I think the VIX peaked in the low 40s. Trading at levels over 80 is almost too hard to fathom. Here is a one-year VIX chart:
Tuesday, October 14, 2008
I have posted before on IMH Secured Loan Fund. This is an Arizona-based mortgage loan company that made early-stage development loans to primarily home builders. It has most of its mortgage investments in California, Nevada and Arizona, but has also made loans in other parts of the country. It announced that is suspending withdrawals and new capital. It's 8-K stated the following:
Management PoliciesThe 8-K said that since the credit crisis started it has experienced unprecedented withdrawal requests. This is not surprising. What is surprising is how much money IMH has raised over the past year ($127 million of new investor contributions through the first six months of 2008) despite problems in the credit market and the housing market. The third quarter 10-Q should provide more insight.
• Maintain capital to honor all Fund commitments and obligations.
• Manage and protect the existing portfolio effectively.
• Remain steadfast against “fire-sale” liquidation of Fund assets.
• Continue to make meaningful pro-rata cash distributions on a monthly basis to Fund members.Management Actions
• The Fund will suspend accepting any additional member capital.
• The Fund will suspend re-investing monthly distributions.
• The Fund will pay all future monthly distributions in cash.
• The Fund will cancel all pending redemption requests in order to safely maintain capital for managing, protecting and preserving Fund assets.
• The Fund will not accept any new redemption requests.
• The Fund will continue to work toward meaningful distributions to its members.
Yesterday's market rally was a welcome relief. I'd like a few steady days. I just saw this article from the Financial Times that brings up some good points and historical perspective. Here are a few paragraphs that stood out:
As for the trend, when the Lehman Brothers collapse started this phase of the crisis, the S&P 500 stood at exactly its average for the previous 50 days. Even after Monday’s bounce, it would need to rise 20.5 per cent more to get back to that average.
Further, we need to look at what prompted the bounce. The latest actions to bolster the international banking system are extreme. Other actions that looked extreme at the time had no impact. It would have been alarming if they had not had a response now.
How could the bounce turn into a rally? First, stocks need evidence of a thaw in money markets. Once there is no need to price in some chance of an all-out banking collapse, equities should be able to rise.
Second, the market needs to gauge the impact of this financial distress on profits. Earnings season for the third quarter is just starting; it is far more important than usual.
The last two paragraphs are what to watch for in the very short term. I would add that fourth quarter earnings, which will show the impact of the banking bailout, will also be important.
Saturday, October 11, 2008
I was at TICA's annual conference for one day last week. I found out news about two prominent TIC sponsors. DBSI is in trouble and Argus threw in the towel. DBSI, the Idaho-based sponsor, was a no-show at TICA. I saw one of its principals, John Mayeron(?), talking with people, but its booth was empty and it canceled its presentations. DBSI fired all its sales force late in September. It is reviewing all its programs - TICs, Notes and funds - and may reduce distributions. DBSI had opaque financial statements and its TIC deals were master leased, with DBSI responsible for payments if the underlying properties were unable to support the distributions. This implosion will get blamed on the Credit Crisis, but it has been in the works for several years. DBSI's master lease structure, which was supposed to protect investors by having DBSI ensure lease payments (distributions to investors), is going to prove worthless, as DBSI will break its lease obligation. This is not surprising, and unfortunately, DBSI will not be the first.
I also heard, and this was later confirmed, that Thompson National Properties, is entering into a joint venture with Argus Realty Investors. I am not sure why it's being called a joint venture. (Maybe because Argus, as a TIC sponsor who gets all its payments up front, is worthless and therefore could not be an acquisition because there was nothing of value to acquire.) Thompson is taking over management of all Argus properties and the two principals of Argus, Dick Gee and Tim Snodgrass, are joining Thompson. Call it what you will, but there is nothing joint about this takeover. The betting now starts on how long Snodgrass and Gee stay with Thompson.
The Credit Crisis keeps getting wilder. Here is a must-read from tomorrow's New York Times. I won't re-hash it, but the idea of buying mortgage securities is now secondary to the Government investing directly in banks. This is so radical I don't even have an opinion, other than if it stops a depression it is probably a good idea. I do think it's a Hotel California-type investment - easy to get in but hard to get out - that may be good for the immediate-term but the long-term implication is open for debate.
Here are a couple of parts of the article that stood out to me:
Two weeks after persuading Congress to let it spend $700 billion to buy distressed securities tied to mortgages, the Bush administration has put that idea aside in favor of a new approach that would have the government inject capital directly into the nation’s banks — in effect, partially nationalizing the industry.
As recently as Sept. 23, senior officials had publicly derided proposals by Democrats to have the government take ownership stakes in banks.
The Treasury Department’s surprising turnaround on the issue of buying stock in banks, which has now become its primary focus, has raised questions about whether the administration squandered valuable time in trying to sell Congress on a plan that officials had failed to think through in advance.
I think that the Credit Crisis is moving so fast, that the nuclear option of nationalizing banks was far down Paulson's list of options.
Here is a funny blurb that is full of irony:
Treasury officials began canvassing banks and investment firms about the possibility of having the government buy stakes in them. The new bailout law gave the Treasury the authority to buy up almost any kind of asset it wanted, including stock or preferred shares in banks.
Industry executives quickly told Mr. Paulson that they liked the idea, though they warned that the Treasury should not try to squeeze out existing shareholders. They also begged Mr. Paulson not to impose tough restrictions on executive pay and golden-parachute deals for executives who are fired.
Mr. Paulson heeded those pleas. In his remarks on Friday, he carefully noted that the government would acquire only “nonvoting” shares in companies. And officials said the law lets the Treasury write most of its own restrictions on executive pay, and those restrictions can be lenient if they are applied to a set of fairly healthy companies.
At this point, beggars can't be choosers. First, many executives will probably get fired, like at Freddie Mac, Fannie Mae and AIG, and get a nominal severance package. Second, executives that don't get fired should be happy to get any compensation. They only need to look what happened to executives at Bear, Lehman and AIG who lost most everything. Heck, if the plan works and confidence is is restored, banks will be able to retire the preferred stock or other Government investment and then pay themselves a huge bonus for management expertise during the Credit Crisis.
Wednesday, October 08, 2008
I was at the Tenant In Common Association's annual conference in Las Vegas on Monday. I will post more about it over the next few days, but one episode has stayed with me. One of the keynote speakers was an economist named Todd Buchholz, a smart guy and an entertaining speaker (despite his persistent book pimping). The question and answer session was more illuminating than the speech. The first questioner, an obvious oil and gas sponsor, ripped into Buchholz for not knowing the exact figures for oil and gas demand v. production, and vehemently objected to Buchholz's assertion that the price per barrel of oil was going to drop to $60. The second questioner - more like commentator - wanted confirmation for his opinion that an Obama presidency and Democratic Congress would usher in the return of powerful labor unions, and the disastrous impact this would have on the economy. Buchholz did not feel his concerns were warranted. The final questioner/commentator wanted to know why the United States isn't breaking all trade agreements.
Talk of another depression, nationalistic tendencies and fear of all-powerful labor unions bring to mind the 1930s. This Credit Crisis has turned the world upside down. I am waiting for calls to bring back the gold standard. I think I just saw in what direction the far Right's talking points are headed. I am scared to think of the far Left's talking points.
I was sent this fascinating New York Times article from 1999 in reference to my previous post. It describes Fannie Mae's pilot plan to relax underwriting standards to allow more subprime mortgages. Here are some interesting quotes:
It is amazing the pressure Fannie was under to expand its loan programs. Here is an initial description of the loans Fannie was going to underwrite:
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.
Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.I don't think these are loans that are exploding now. The article's author either makes the understatement of the past ten years or shows incredible prescience:
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.From reading this article and seeing what happened in the housing market, the governement wanted to expand home ownership and banks and mortgage companies wanted more potential home owners. Many firms, in addition to Fannie and Freddie, stepped into this market. The loans got more creative and the lending standards got more lax. Non-subprime as well as subprime borrowers took full advantage of the easy credit boom. Fannie's no innocent, but they are not the lone scapegoat either.
Sunday, October 05, 2008
I am hearing pundits blame Freddie Mac and Fannie Mae for the Credit Crisis gripping the world. Not only is this disingenuous but it is wrong. Freddie and Fannie have helped millions of Americans buy homes. For years, Freddie and Fannie bought most of the mortgages originated by banks, and then packaged and sold them to pensions and mutual funds. Their securities are considered some of the safest investments available, and it would be hard to find a government bond mutual fund that did not hold Fannie and Freddie bonds. Freddie and Fannie, using their low cost of capital, borrowed huge sums that allowed them to buy mortgages. They made money on the spread between their low borrowing cost and the interest they earned on the mortgages they acquired. This process allowed banks to make more mortgages than if they were to hold their mortgages. The mortgages Fannie and Freddie would acquire had to meet strict guidelines and this made banks make loans to to creditworthy borrowers who put down equity to acquire their homes. Through this process, Fannie and Freddie not only allowed banks to make more home loans, their low cost of capital kept interest rates low for consumers.
Banks have always had programs for subprime borrowers. These loans had higher interest rates and banks kept loan loss reserves for these loans. The implication I am hearing is somehow these niche programs, and poor, uncreditworthy borrowers, have sunk the financial world with Fannie and Freddie as the facilitator. No way. In many cases, until late 2006, Fannie and Freddie could not even buy subprime mortgages due to their strict underwriting standards. Fannie and Freddie securities primarily held traditional thirty-year mortgages and other, similar mortgages made to good credit borrowers that had made down payments of 20% or more. These are not the mortgages causing today's problems.
The idea that poor people suddenly decided to buy a home, paid too much and then stopped paying their mortgage is false. Yes, this did occur, but traditional banks have dealt with this type of borrower for years and knew the risks they posed. The problem is, and will continue to be, the non-subprime buyers that used subprime financing to support their lifestyle, and then could not afford the mortgage payments when the terms of their mortgage reset. Borrowers across the credit spectrum used subprime mortgages because of their low "teaser" rates. Home buyers looked for low monthly payments - the lower the better - and subprime mortgages had the lowest monthly payments (and most brutal reset terms). The home buying process became akin to buying a car. Mortgage brokers started with the amount a buyer could pay per month and then worked backwards to find a mortgage that fit the needed payment schedule.
No one worried about subprime mortgages' nasty resets when the "teaser" periods ended, the loans were going to be refinanced anyway. Mortgage brokers had solved the historic boom / bust cycle of the mortgage business. All they had to do was sell home buyers mortgages that had to be refinanced every few years and a steady stream of customers kept coming back and paying the refinance fees over and over. Borrowers had low payments and lived large, and mortgage brokers had high fees that recurred every couple of years - everyone was a winner.
The banks and finance companies, using the same process as Freddie and Fannie, stepped in to meet borrower demand. They would borrow money, allow banks and mortgage companies to create arcane mortgage products and then package and sell these mortgages to other firms. Banks jumped at the new sources of capital and business opportunities. Firms like Washington Mutual, Countrywide and New Century Financial, unleashed from the shackles of Freddie's and Fannie's old fashioned underwriting, boomed with their new banking friends.
The securities backed by the new mortgages got ever more inventive and complicated. The securities were so new and had so many different terms, the models used to price them could not incorporate all the various market scenarios (and no packaged loan security could ever have been sold with a 20% plus default assumption). None of these mortgage-backed products were Fannie or Freddie bonds. They were created and issued by Bear Stearns, Lehman Brothers and a host of other Wall Street firms. These are the mortgages that cannot now be priced.
Here is a quote from Warren Buffett from a recent article from the New York Times:
He called the current crisis an economic Pearl Harbor, requiring immediate action. Its biggest single cause, he explained, was the real estate bubble. “Three hundred million Americans, their lending institutions, their government, their media, all believed that house prices were going to go up consistently,” he said. “Lending was done based on it, and everybody did a lot of foolish things.”
As far back as 2003, Mr. Buffett had warned that the complex securities at the center of today’s troubles — once so profitable, but now toxic — were “financial weapons of mass destruction.” These securities were engineered by the math quants on Wall Street, and in the interview Mr. Buffett expressed his disdain: “Beware of geeks bearing formulas.”
I know several non-subprime borrowers who used subprime mortgages due to their low rates. The whole real estate bubble was caused by people thinking they had to get real estate because prices were always going to rise, or felt that the equity in their house was a source of idle cash. Mortgage companies met consumer demand, and subprime mortgages with their variable payment options were their prime tool. These mortgages allowed people to live way beyond their means. When people saw friends, co-workers and neighbors buying new cars, motor homes, home theaters, and taking first class vacations due to these new-fangled mortgages, the race was on. In many cases subprime mortgages, with those attractive teaser rates, were the easy answer. Homes became quasi-banks providing a seemingly endless source of lifestyle cash.
These mortgage securities, not Fannie and Freddie bonds, are the securities that cannot be valued and lead to the Credit Crisis and the $700 billion bailout. Freddie and Fannie bonds are some of the most liquid, and highest quality bonds in the world. The exotic mortgage bonds that were created by investment banks using complex mortgages and complex pricing models and formulas are what cannot be valued. The pricing models are worthless in today's turbulent financial markets. No one wants to be the first to buy these securities because of the fear of paying too much. This is why the Government is going to make a market in these securities. None of the securities the Government will buy are Fannie or Freddie bonds.
Fannie and Freddie are huge government bureaucracies and are not above reproach. They have historically been the domain of Democrats and championed by left, and have been full of corruption over the years. But they have played an invaluable role in expanding home ownership in the United States. However lax Congressional oversight has been, Fannie and Freddie are not responsible by themselves for the Credit Crisis.
Friday, October 03, 2008
Over the past week Warren Buffet stepped in with capital for Goldman Sachs and GE. Buffet's Berkshire Hathaway is a large shareholder of Wells Fargo, so I guess Wells' bid for Wachovia had Buffet's approval. My gut, without reading any specifics, is that the Wells' acquisition of Wachovia is a better deal than the Citigroup deal. Buffet is getting good terms on his investments. But he is also counting on a successful resolution to the credit crisis, because even his good terms will be wiped out fast if the crisis is not resolved soon. I wonder what other smart investors have the guts to follow Buffet's lead.
Thursday, October 02, 2008
Car dealers have, in my opinion, always been at the bottom end of the business world in terms of reputation. It is funny how that is now changing with the protracted credit crunch. I have heard several times on CNBC about some poor car dealer that may have to close because of the crisis. It is funny how a source of derision is now a point of sympathy. This credit crisis is turning the world upside down.
One more point on the auto industry. The auto sales numbers for September were horrific. What's surprising is that anyone would find this surprising. The whole month of September was one painful slide into a credit abyss, and auto sales are mostly financed, so sales had to be terrible. I suspect all big-ticket items that are typically bought with debt will show similar dismal sales figures.
I meant to post on this earlier in the week, but it seems like the Fed is considering rate cuts. I was wondering when rate cuts were going to make news. With all the talk of the Bailout, discussions of rate cuts took a back seat. Cutting interest rates is a traditional method for the Fed to add liquidity to the market and spur lending and borrowing. Today on CNBC there is as much talk of a slowing economy as about the Bailout. If falling rates can help the housing market, start cutting.
Wednesday, October 01, 2008
The Wall Street Journal has an article this morning on General Growth Properties (GGP), a shopping mall owner. The article describes General Growth's debt problems and the leverage (margin) its key executives used to exercise stock options. Here is a one-year chart from FinanceYahoo comparing General Growth with Federal Realty Trust (FRT), another real estate investment trust that owns retail properties:
Federal Realty Trust is a solid company. It is amazing that its stock has held its value in the current real estate market.