"We spent, quite frankly, the last couple years doing positive things with the company putting the house in order, delevering, selling off non-core assets and enhancing our senior management team," Glimcher said. "We feel comfortable that we built a platform for growth."
Indeed the company has experienced growth. In its first quarter of 2005, Glimcher reported an income $1.4 million, or 4 cents per share, as compared to $800,000, or 2 cents per share, in the same period of 2004. Funds from operations were reported at $19.9 million, or 50 cents per share compared, to $18.2 million or 46 cents per share in the first quarter of 2004.
Glimcher said that the company's primary focus has been in anchor-driven ground-up developments. However, the firm is now looking into expanding its portfolio by adding joint-venture investments that he said would bring "very high single, if not double-digit returns."
The company plans to engage in deals with private developers who have sites under contract that are entitled and primed for development. Glimcher said the company would enter the deal as a venture partner, buying half the development wholesale, and provide leasing, development and finance expertise while operating the property and bringing it into the fold of the company's portfolio. Once the property stabilized, the company would buy out the remainder of the property at retail cost.
"This is essentially a hybrid between development and acquisition," Glimcher said, "and it's something we are going to continue to pursue."
The company divides its assets into three groups, describing 49% of its NOI as Market Dominant assets; 42% of its assets as Trade Dominant centers; and 9% as Opportunistic. Glimcher said Market Dominant assets, or those malls that serve as the primary location for retail in a community, carry a 92% occupancy. Trade Dominant centers, or locations in which the company owns a subtrade area, have an 88% occupancy rate. And Opportunistic malls, or those malls that need upgrades, stabilization or portfolio elimination, post a 77% occupancy level.
Glimcher said the company's properties have experienced increasingly better performance, as sales per square foot have ranged from the "high $200s to up and above $330 and growing from there." The result, said Glimcher, has been a commensurate rise in rents.
"We're constantly looking at quality: Quality of the team, quality of the portfolio, and certainly the quality of our balance sheet," Glimcher said. "And as we can improve sales per sf and improve the quality of this portfolio, we are seeing direct correlation of the growing in our minimum rent."
Glimcher said that while the company is sizably smaller than other retailer firms in the industry, the company could offer opportunities that large investing firms could not. "I think there is enough opportunity there at least for the foreseeable future provide certainly sustained growth for a company like ours," Glimcher assured. "Some of our peers that are five- to ten-times larger look at companies for growth where we look at assets for growth. In so many ways we see our size as an advantage, and our notion of growth takes a lot less."
In closing, Glimcher said he believes his firm is far undervalued, and that it has much more to offer than what it has been given credit for. He also admitted that the company needs time for its new management team to gel while demonstrating an ability to grow. Confident that the company can deliver new results, Glimcher added, "I think we're a great story to watch."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 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.
