What Does Bill Ackman Know About The Future Of Commercial Real Estate?

Tyler Durden's picture

Bill Ackman helped rescue General Growth Properties (GGP) - the US 2nd largest shopping mall operator - from bankruptcy in 2009/10 as the company collapsed in the financial crisis. Ackman  "turned $60 million into $1.6 billion" in the process but, according to Bloomberg, has now exited his entire position, dumping his final 28 million share back to the company via a buyback.

The spin, of course, is that it's right to take profits and that GGP is now 'a much different company than it was then."

However, given Ackman's knowledge of JCP (and perhaps RSH), we can't help but wonder, given all the exuberance about Fed tapering must mean the recovery is here and sustainable - just why Ackman would unload it all at such a pivotal time in the US economy...?

 

Via Bloomberg,

Bill Ackman sold all of his shares in General Growth Properties Inc. (GGP), the second-largest U.S. shopping-mall owner, marking the end of one of the hedge-fund manager’s most profitable investments.

 

General Growth bought back about 28 million shares from Ackman’s Pershing Square Capital Management LP for $556 million, the Chicago-based real estate investment trust said yesterday in a statement. The hedge-fund firm, which in September sold 25 million shares for $500 million, no longer holds any common stock, the company said.

 

Ackman, 47, helped rescue General Growth from near-collapse by pushing it to file for bankruptcy in 2009, and was part of an investor group in its subsequent reorganization. The effort “turned $60 million into $1.6 billion,” the hedge-fund manager told Bloomberg News in 2011, and contributed to his flagship fund’s net return of 29 percent in 2010.

 

...

 

General Growth shares have climbed 3.2 percent in the past 12 months and are up about 60 percent since the company’s exit from bankruptcy.

 

The company used “available liquidity” to fund the purchase of Pershing Square’s shares, according to yesterday’s statement.

 

“It’s a good thing,” Alexander Goldfarb, an analyst with Sandler O’Neill & Partners LP in New York, said in an interview. “This settles up and neatly separates the turnaround from where the company is today.”

 

Yellen is confident of economic growth; Economists are confident of economic growth; so what does Ackman potentially know about 'anchor tenants' in malls that means commercial real estate exposure is not for him...