Analysts Dissect ICSC Meetings

NEW YORK CITY-Though the International Council of Shopping Centers’ Spring Convention last week had record-breaking attendance, at least one shopping-center analyst report on the show views the industry with caution. “It did seem to us that managements and investors may have been a bit less excited about the strong demand this year than last,” says a report by Matthew Ostrower, a REIT analyst at Morgan Stanley.

However, he concedes that the convention was busier than ever for shopping-center owners and landlords, who did not indicate that there was any slowdown in the demand for retail space. “Whether the strong trends remain sustainable going forward is debatable,” says the report. “But we have raised this concern in each of the last several years with no sign of moderation yet in sight.”

Analysts from Morgan Stanley and other firms note meetings with the Mills Corp., which is up for sale after experiencing accounting problems that have led to layoffs, the restatement of financial reports and an SEC investigation. The reports indicate that Mills’ centers are performing well operationally and that the Arlington, VA-based company’s executives would rather sell parts of the company than the entire firm or would at least like to keep its management in place if all of it is sold. “While there may well be upsidepotential in many assets, we doubt the potential suitors will pay up for it,” notes a Bank of America report.