(Ian Ritter is national online editor for GlobeSt.com/RETAIL.)

NEW YORK CITY-The KanAm Group, the Mill's Corp.'s Germany-based joint-venture partner on a number of its properties, may have to liquidate its ownership of some of those assets, surmises a UBS Investment Research report. This comment follows KanAm's freezing its $580-million KanAm US Grundinvestment fund that has ownership in two Mills centers, Opry Mills in Nashville and Great Mall in San Jose, CA among other US holdings other than Mills' properties.

The move by KanAm follows a hectic year's end for Mills, in which 17 executives were let go after the company restated its third-quarter earnings. The Arlington, VA-based REIT's third-quarter NOI fell 5.2%, to $104.7 million, from the same year-ago period, while FFO dropped 53.6%, to $0.45 per share. Those plunges were due, in part, to a variety of charges taken on in regard to projects in the company's pipeline and failure to collect some rents. Mills, which has acknowledged that it has been contacted by the SEC, will restate earnings from its Q1 in 2000 to last year's Q3.

As for KanAm, UBS says the closing of the US Grundinvestment fund could just be the beginning. "This could be a catalyst for KanAm to reassess its overall Mills partnership strategy," the reports says. KanAm has ownership in an additional nine Mills centers in the REIT's overall portfolio of 42 properties in North America and Europe.