A GGP retail holding

NEW YORK–Class A malls are in trouble. This is, at least, according to various analysts that expressed dismay last week about Brookfield Property Partners’ $9.25 billion deal to acquire the rest of GGP. And of course, the market signaled its disapproval of the deal, promptly punishing retail REIT stocks in the wake of the news of the $23.50 per share purchase price. The theory behind the upset is that it had been broadly expected that GGP would trade at a higher price. The fact that it didn’t — assuming shareholders approve the deal — thus points to a decline in valuations across all mall stocks, including the REITs that hold high-quality assets.

JPMorgan analysts said in a note that:

While we still see value in mall stocks, we think the GGP news is negative for the sector and, as such, we are moving our three previously overweight-rated mall REITs to neutral.

RBC Capital Markets analysts wrote that:

The terms of the agreement are below our target price [of $24 a share] and the average sell-side target, which suggests to us a reset lower for pricing of high-quality mall portfolios

And at BTIG:

GGP management has clearly stated on numerous occasions to shareholders that its assets are worth substantially more than where its shares are currently trading. We are surprised that the Special Committee has unanimously approved the new offer and recommends that the GGP shareholders approve the proposed terms.

These reports belie a year over year increase in inline store sales for such REITs as Macerich, Simon Property Group, Taubman and GGP, according to Trepp Talk.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.

More from this author


GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.