Mall REIT sector (long General Growth Properties) GGP
The three reasons
- 1
Mall REITs still trade at 7.8% cap rates vs. 6.3% Baa — a historically wide spread
- 2
Store closure fears were overblown; white knights absorbed bankruptcies and many tenants expanded
- 3
Tenant cash flows swung from deeply negative to materially positive on lower inventories
Primary demands
- Buy mall REITs now before the recovery is fully priced in
- Re-rate cap rates lower toward historical spreads vs. Baa corporate yields
- Recognize that store-closure and rent-relief fears of early 2009 were overblown
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Notable slides (7)
Notes
Delivered at the Value Investing Congress Dec 7, 2009. Framing device: Buffett's 'If you wait for the robins, spring will be over' — classic contrarian-timing rhetoric. Structure is SCQA with strong before/after symmetry: opening 'At the Beginning of 2009' bullet list is repeated verbatim near the close and re-inverted into a checkmarked 'The World Has Improved Dramatically' slide. Management CEO quotes (Simon's Sokolov, Macerich's Coppola) are used SUPPORTIVELY to corroborate the thesis — the opposite of the Ackman-style 'CEO-contradiction' pattern seen in adversarial decks. Introduces a memorable frame — 'Old Paradigm: Sales / New Paradigm: Cash Flow' — and a rhetorical closer: 'Which would you rather own? 10-yr Treasury at 3.4%, TIP at 1.3%, or a mall REIT at 7.5% cap rate.' Not an activist campaign per se — this is a bullish sector thesis supporting PS's long GGP position (GGP was in bankruptcy at the time; PS was its largest unsecured creditor/eventual emergence sponsor). Outcome: thesis proved correct — GGP emerged from bankruptcy in Nov 2010 and was a massive winner for Pershing Square. Visually utilitarian 2009-era blue/white corporate style — predates the polish of the Canadian Pacific 2012 deck.