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Ira Sohn Research Conference Summary


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Zerohedge has a summary of the various speakers at the Ira Sohn Conference.  Cheers!

 

http://www.zerohedge.com/article/ira-sohn-research-conference-summary

 

 

I liked that a lot. I'm surprised no one has talked about this tidbit where the author is discussing Ackman's presentation. "GGO is where GGP’s noncore assets will go. They include housing development land, land in Hawaii, land on the Las Vegas strip and South Street Seaport. Ackman referred to GGO, that he hopes it to be a mini Berkshire Hathaway. Ackman thinks new GGP will be worth $15 and new GGO will be worth $5. He finished by saying he bought 150 million Citigroup shares but did not give his thesis."

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I am confused as to how GGO could be a mini brk with illiquid land holdings. Any ideas?

 

I think the key word is hope. I think they will sell off the holdings and allocate the capital going forward. I would invest if I had a margin prior to the transformation or post it.

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I think the key word is hope. I think they will sell off the holdings and allocate the capital going forward. I would invest if I had a margin prior to the transformation or post it.

 

This may be so, but I think most of the business (Ackman says it will be called Howard Hughes Co. though I don't think that is set in stone) will remain in real estate development for some time. I think Ackman/Brookfield may use the Spinco as another real-estate-related investment "vehicle" similar to FUR.

 

The problem with valuing the the Spinco is the difficulty of putting a value on the big development properties (South St. Seaport, Ward Centers, etc.). Depending on how the developments play out over the next few years each property could be worth anywhere from a little to a whole lot. For example, the South St. Seaport is on the books for $2.9 million. That is for 11 acres of prime underutilized NYC real estate. With some redevelopment that could be worth more than $1bb. So it depends on how the Spinco trades when GGP emerges, but it could be worth anywhere from $4 to $8+/share.

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