Glimcher Realty Trust has joined the ranks of retail landlords prepared to sell part ownership of a few of their better-performing properties to raise capital. The Columbus, Ohio-based REIT wants to sell partial equity stakes in its WestShore Plaza in Tampa, Fla., and Polaris Towne Center in Columbus.
Michael Fascitelli, the new CEO at Vornado Realty Trust, is described by others in commercial real estate as one of the most aggressive and knowledgeable deal makers in the business. Having seen Vornado lose about $10 billion of its market capitalization, Fascitelli will have the opportunity to put his skills to the test. The REIT's properties are highly concentrated in the declining Manhattan market, and the firm has substantial exposure to the debt-heavy Toys "R" Us chain and is itself about 60% leveraged.
Managing distressed assets that get turned over to banks is expected to be a growth sector in the coming years, according to several participants at last week's International Council of Shopping Center real estate convention in Las Vegas. REITs, brokerage firms and third-party managers are all trying to gain a share of the expanding business.
Some banks want permission from the Federal Deposit Insurance Corp. to use government money to buy their own troubled assets. The request comes under the Obama administration's Public-Private Investment Program, which is expected to start with $100 billion in taxpayer-funded capital this summer.
Veteran real estate investor Ross Meredith likes a lot that he sees in REITs but warns investors to be careful. The prices of some remarkably well-managed REITs have taken a tumble, he said, "But boy, you have got to be real selective -- real selective."