Simon Property Group, Inc. (SPG)

Increasing relative price strength

Overvalued and under-funded.

Loss of tenants, crappy economy, people beginning to live within their means, no work and no money=end of Simon Property Group

Found this from a screen on high debt levels and high PE.

Company seems to be consistently paying out higher dividends than earnings, which looks bad. Given the amount of debt they have, it looks incompetent. Thumbs down.

Heavily leveraged retail portfolio

Visualize the meteor that killed the dinosaurs heading towards earth. Now picture a SPG logo on it. That's how hard this stock is going to crater.

Shrinking revenue and increasing share price, somethings got to give.

The multiples for this stock are ridiculous, and there is not going to be any good news for owners of shopping malls in the near future:

"In the first quarter of 2009, retail tenants “have vacated 8.7 million square feet of commercial space,” which “exceeds the 8.6 million square feet of retail space that was vacated in all of 2008.” Further, as CNN reported, “vacancy rates at malls rose 9.5% in the first quarter, outpacing the 8.9% vacancy rate registered in all of 2008.” Of significance for those that think and claim the crisis will be over by 2010, “mall vacancies [are expected] to exceed historical levels through 2011,” as for retailers, “it's only going to get worse.”[5] Two days after the previous report, “General Growth Properties Inc, the second-largest U.S. mall owner, declared bankruptcy on [April 16] in the biggest real estate failure in U.S. history.”[6]"
Source: http://www.lewrockwell.com/orig10/marshall1.1.1.html

I believe that more pain is coming in the commercial real estate market.

The commercial real estate market will soon have its day or reckoning.

GGWPQ.PK Hedge

Simon says keep buying in the down market.

Mass mall failure predicted, even for fairly recently opened ones.

no financing/property values are down+income down. higher cap rates and no comps for values

Commercial REITs such as SPG are about to get hammered. Declining sales due to high and rising unemployment will beget declining earnings, which will, in turn, shrink dividends. Investors will be fleeing investments like this once they found out they are being paid much less to hold them. My biggest risk here is that the company will find a way to continue dividend payments (although it will likely come in the form of some sort of share dilution, making it a temporary risk) negatively impacting my red thumb call.

http://xderivatives.blogspot.com/2009/06/simon-property-group-inc.html

worst yet to come for reits, Since when dilutions is a good thing !! estimates are too high , depriciations on assets yet to be realized.

No turnaround for commercial real estate in sight, property values continue to plummet as more and more stores are forced to close. All the unemployed have yet to really affect the economy once the last remnants of their equity are used up in the coming months. This death spiral has a ways to go before unwounding.

Trading at over 4 times book value and having a Debt/Equity ration of 5.9:1. this is an accident waiting to happen, especially in the economic and political climate we are in.