Cohen Financial Culling Malan Portfolio

"Malan's new stated objective is to enhance shareholder value along with enhancing the value in their assets," says Richard Tannenbaum, managing director of Cohen Financial's advisory services unit.

Many of Malan's 64 properties in nine states are in tertiary markets, Tannenbaum says, which is contrary to the REIT's goal of focusing on well-located properties. A first step in the assignment is to recommend which properties should stay in Malan's 5.9-million-sf portfolio and which should go.

"We are first conducting an initial strategy review of all assets in their portfolio," Tannenbaum says.

About half of the REIT's properties are anchored by Kmart stores.

Malan's board of directors already has given management its proxy to liquidate part of its portfolio, Tannenbaum says. One example of the Bricktown Square shopping center on the Northwest Side, which already is on the market, he adds.

Along with identifying during the next 60 days properties that should be sold, Cohen Financial also is examining mortgages on individual properties as well as loans on the entire portfolio that are coming due or are up for renewal in the next 12 months, Tannenbaum says.

Although the Banyan assignment resulted in a liquidation of the REIT, that probably will not be an option pursued by Malan, Tannenbaum indicates. "It's premature to say at this point if there's a similar plan in mind," Tannenbaum adds. "I think this is a remake."

In addition to drawing up a strategic plan, Malan's board of directors cut its dividend from nearly $1.50 a year to $1.00 a year. The company went through a $3.4-million proxy fight in early 2000, resulting in Jeffrey D. Lewis replacing Anthony S. Gramer as CEO.