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It was bound to happen. Reggie Middleton vs Ackman vs Hovde on GGP!

Reggie Middleton's picture




 

I am here to weigh in on the increasingly popular marketing battle over
GGP's (General Growth Properties) value in, and out of bankruptcy. The
players in question are fairly large buyside institutions who own opposing
positions on the stock. Ackman/Pershing square, who are long the
company's stock, and Hovde Capital Advisors, who are short the stock,
and Reggie Middleton, the original player!

For those who follow me regularly and/or are familiar with my dealings
with GGP, skip down to the bottom of this post to download my latest
GGP analysis. For those who are not familiar with me and the BoomBustBlog,
I am (to the extent of my knowledge) the first investor/media concern
to go public with a short thesis on General Growth Properties (GGP)
with a warning on commercial property in general, and a specific short
on GGP in the 4th quarter of 2007 (see "GGP and the type of investigative analysis you will not get from your brokerage house", BoomBustBlog professional subscribers can download the entire GGP composite history
in .pdf format). I am a private investor that generates his own
proprietary research. It is solid, independent, unbiased, and of
extreme quality when compared to the highly conflicted sell side
marketing fluff proffered as research, and apparently now stands out
among the buy side as well. With all due respect to the successful
investors referred to herein, there is a hint of "talking one's book"
within the presentations. I have absolutely no problem with self
promotion, but when it appears the promotion comes to odds with the
validity of the analysis, it does tend to raise my brow, and apparently
the brow of several institutions that have come to me for my opinion.

So, let's take an unbiased, empirical look at GGP from the guy who
first pointed out the insolvency of this company in the first place. As
for the self promotion aspect, I am now offering consulting services to
those who desire independent, objective analysis. I will soon be
releasing a very interesting study on real estate funds and residential
mortgage related products from Morgan Stanley and Goldman Sachs, which
will assuredly cause their clients to fall in love with them. More on
that later, though.

GGP from the beginning

As stated earlier, I articulated a roadmap to the largest commercial
real estate failure in history a full year in advance of its filing.
General Growth Properties was picked to be the big BoomBustBlog.com
shorting opportunity in November 2007, when it was the 2nd largest
commercial mall owner in the country, trading above $50, with an
investment grade rating and buy recommendations from Wall Street. It
filed for bankruptcy a year and a half later.

The following links lead to an extraordinary body of GGP and CRE research which I released through BoomBustBlog.

reggie_on_ggp.jpg

 

12 April 2008

 

Our approach is to evaluate the total credit risk attached to the CRE portfolio by

1.     Following a bottom up approach wherein each individual property
is valued based on current cap rates and prevailing rentals;

2.     Comparing the fair value of each property with outstanding
mortgage to identify the pockets with high LTV, which can lead to
losses on liquidation,

3.     Factoring in the refinancing risk arising from short-to-medium term scheduled maturities.

The comparative analysis (Reggie vs Ackman vs Hovde) is available to the public here: Middleton vs Ackman vs Hovde on GGP - public edition Middleton vs Ackman vs Hovde on GGP - public edition 2009-12-26 20:41:50 1.50 Mb.The full comparative analysis with updated valuation is available to subscribers here: Middleton vs Ackman vs Hovde on GGP - subscription edition w. updated valaution Middleton vs Ackman vs Hovde on GGP - subscription edition w. updated valuation 2009-12-26 20:43:17 1.51 Mb.You may click here to subscribe.

 

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Mon, 12/28/2009 - 06:25 | 175808 Anonymous
Anonymous's picture

What a wonderful short that would have been in the fall of 2007. I wanted to short it but I didn't want to pay the big dividend, which those stupid fuckers maintained all the way down.

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