Behind The Idea #73: Simon Property Group Vs. The Market
Mall and retail real estate investment trusts (REITs) don't on the surface seem like a likely battleground for investors on Seeking Alpha. They are a relatively obscure sector of the market, one layer abstracted from the underlying retail business. And the business of owning real estate and lending it out to retail companies seems boring enough.
We talked about Simon Property Group (SPG) this week, at the prompting of Seeking Alpha author and Behind the Idea listener Julian Lin, whose recent article we used as a springboard. Simon Property Group is usually considered the top Mall REIT, one of the good ones, full of A-properties. We break down whether that holds up for an investment story, and what else to watch for.
Topics covered:
3:15 minute mark - The hope for SPG - strong balance sheet and redevelopment 5:45 - Dissecting the balance sheet, if not stress-testing it 9:15 - About that 2008 comparison and cyclical vs. secular 18:15 - Getting into the redevelopment question 26:15 - What are the reasons to believe? 29:15 - The degree of a REIT's exposure to another sector 34:15 - Debut of Why I'm A Bad Investor with Daniel 41:15 - Cash flows for a REIT 46:00 - Simon's cash cushion and flexibility 50:00 - The market's long-term orientation
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