Mr. Kenneth Leonard

GLG News by Mr. Kenneth Leonard, Principal

GLG News is now G+ Insights

G+ is a community for professionals, academics and entrepreneurs to connect through online discussions and in-person meetings. You will continue to see G+ Insights (formerly GLG News) here as well as on the G+ website, where you can share and discuss the G+ Insights you read.

A Wonderful New Indicator Of Value

December 16, 2010

Analysis of:Overdue loan for sale on big suburban shopping center | www.chicagorealestatedaily.com

One of Chicago's latest and greatest "special centers" has defaulted on its' $91 million construction loan from EuroHypo A.G. and the loan is now being marketed by Eastdil Secured LLC. Any GLG client interested in understanding the underlying value of troubled shopping centers should follow this marketing effort.

Forest City Pretends and Extends

December 16, 2010

Analysis of:Partner cuts value of stake in condos | www.chicagorealestatedaily.com

Forest City Enterprises, a real estate company with assets of approximately $11.8 billion, has taken a $18,3 million hit on the value of its' 25% stake in a large condo project in the South Loop of Chicago. This acknowledgement by such a large player that the condominium market is unlikely to perk up anytime soon, is explained away by their statement that "it is in keeping with what's happened around the country in terms of single-family homes and condos".

Private equity's real estate valuations opaque at best

December 2, 2010

In a recent article in the Chicago Tribune about an Illinois Pension fund that has reported a 9.4% negative return due to the bankruptcy of firms they have invested in, I spotted a very disturbing fact that I believe should be highlighted to the GLG reader.

Resurection Of Xanadu and Others

December 2, 2010

Analysis of:A New Push To Rescue Xanadu Mall Project | www.nytimes.com

This article in the NYT has a broad implication for GLG clients who follow the Mall REIT industry. Even though Xanadu is not owned by a Mall REIT, and in fact, has been passed over by every Mall REIT in the country, its' attempted resurrection should be of interest because it is symptomatic of what is happening to at least a dozen other stalled projects around the country.

Hidden Impact of Slimmed Down Stores

November 15, 2010

An article titled "BIG STORES SLIM DOWN IN A BID TO FATTEN PROFITS" in the 11/10 issue of the NYT, caught my eye and prompted me to comment for the benefit of any GLG reader who closely follows the Mall REIT industry. The impact of this growing activity is poorly understood and the NYT article did not contribute to this lack of information.

Valuing An Underperforming Mall

November 14, 2010

A recent article in an industry trade journal features a reasonably candid picture of the costs and difficulties of repositioning an underperforming regional mall. I will summarize the article for any of the GLG readers who follow the Mall REIT industry and who may be lulled into a false sense of security about the values of those Mall REITs who are recognized as having a substantial number of underperforming malls in their portfolios.

How Good Are Hedge Funds At Managing Turnarounds?

November 10, 2010

Analysis of:Overdrive- Who really rescued General Motors? | newyorkeronthetown.com

Mr. Steven Rattner's new book "Overdrive" (a first person account by Mr. Rattner, the co-founder of the Quadrangle Group,about what a wonderful job he thought he did in turning GM around when overseeing the Federal Bailout of GM) was reviewed by Malcolm Gladwell in the the 11/1/10 issue of THE NEW YORKER. I thought it worthwhile bringing this book review to the attention of the GLG Reader for several reasons which will be explained below.

Some Occupancies Up, But Many Rents Down

November 10, 2010

Analysis of:Retail good and bad: Vacancy drops, but so do rents | www.chicagorealestatedaily.com

This article in the CHICAGO REAL ESTATE DAILY, purports to show an interesting trend but only tells a partial tale. I think it is worth bringing to the attention of the GLG reader for several reasons, not the least of which is that it is the kind of misleading information that could easily be misconstrued by GLG clients.

Ackman "Targets" JCP

October 22, 2010

A recent article in the Chicago Tribune speculates about the reasons Mr. Bill Ackman's hedge fund, Pershing Capital, has taken a large position in the J.C. Penney company. They seem to accept Mr. Ackman's comment that he is not going to try the same things he tried and failed to do at Target. I disagree.

Borders Is Bordering On Disaster

October 22, 2010

A recent article in the local Chicago business section announced that the Borders store on the corner of Michigan Ave. & Pearson ( one of the highest trafficked corners on the Miracle Mile and directly across from Water Tower), is leaving and being replaced by a new soft goods retailer.

A Few New Discount Stores Do Not Signal the End of the Recession

October 19, 2010

Analysis of:The Recession is Over: Department Stores Expand again | www.bnet.com

While I realize that all bloggers are not created equal and most GLG clients do not have the time or inclination to pay attention to most blogs, this Carol Tice blog is particularly misleading and spectacularly wrong. Ms. Tice shows her lack of understanding about the retail real estate industry in several important ways and I think the GLG News reader deserves to be warned about this kind of yellow journalism.

Tesco Doubles Its' Bet

October 6, 2010

Analysis of:Tesco Signals It Will Push Ahead In U.S. | online.wsj.com

This recent article in the WSJ talks about how much money Tesco continues to lose in the three western states they have invaded and how they are preparing to expand from 160 stores to 300 or 400 stores within the next two years.

Some Interesting Buy-Out Targets

October 2, 2010

Private equity is coming back into the market and rumor has it that there is a lot of interest in the Retail Sector. The Street recently spent some time speculating about 8 or 9 possibilities that I think are worth bringing to the attention of the GLG reader.

Sears To Add A Toy Department this Christmas! What a Brilliant Idea!

September 24, 2010

I just read where Sears will add toy departments to 85 of their stores this Christmas. Apparently Mr. Lampert has just discovered that toys sell well during the Christmas season. I also just saw that the SHLD stock has risen from the low 60s to the low 70s. I guess the Lampert followers have expectations that are easily met by reverting to following every other retailer in America.

Restoration Hardware Has Not Been Restored

September 23, 2010

Analysis of:Restoration Hardware plans 2011 IPO | www.reuters.com

Restoration Hardware is reportedly planning a 2011 IPO. They plan to raise between $100 & $300 million. Before Catterton Partners and Restoration's CEO Gary Friedman took them private in 2008 for approximately a total company value of $175 million, they had lost money in 7 of their last 9 years. In 2007 they had lost $51.9 million in what most furniture retailers say was the last of the "good years". Restoration had tried and failed to go private in 2007 at a total price of $267 million.

Retail Malls------A Misnomer---Shame on GLG

September 22, 2010

When GLG asked for one of its' experts to write an article on "Retail Malls", I felt obliged to respond. By now GLG should understand that there is no such thing as a "Retail Mall"! There are Strip Shopping Centers, Regional Malls and all types of collections of retail stores with various names that change from time to time. There simply is no such thing as a RETAIL MALL.

Vornado Stubed Their Toe on the Merchandise Mart

September 9, 2010

Analysis of:Kennedy's Merchandise Mart in play as N.Y. parent streamlines portfolio | www.chicagobusiness.com

This article in Crain's brought back some old memories for me and sadly, with the lack of profitability of the former Sears Tower, (now Willis Tower), Chicago's two largest and iconic buildings have lost their lustra.

Sears To Become A Fashion Merchant????

September 9, 2010

Analysis of:Wal-Mart Investors Wondering | www.chicagotribune.com

A recent article in the Chicago Tribune detailing yet another desperate move by Eddie Lampert , is worth bringing to the attention of the GLG News readers. The article talks about an upcoming test of 200 Sears stores that will be outfitted with new store fixtures and a selection of upscale, fashionable merchandise in an attempt to compete with the likes of Forever 21,H&M, Zara, Target and Kohl's.

Another Example of Old Things Becomming New Again

September 9, 2010

Analysis of:Retail Reits- Trouble Ahead | www.thestreet.com

An article about the growing difficulties facing both Mall and Strip Center REITs .

Another Example of Mr. Lampert's Genius

August 11, 2010

Analysis of:Sears to open first Craftsman tool store in Chicago's River North gallery district | www.chicagobusiness.com

A new Sears tool store in a very odd and almost unduplicable location in a unique segment of the downtown Chicago market, is the latest example of the death throes Sears is going through under the leadership of Mr. Lampert.

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