Hi Mark - From my research, Home Depot (HD) owns 87%( 195.3 million retail sq ft.) of their real estate which is similar to the amount of company owned real estate by Sears when Lampert merged Sears with K-Mart.
buildings.com
From the article:"...The Home Depot stores are planned by 2010.During FY06, the company opened 86 new U.S. stores, including eight relocations. Of its 2,147 retail stores, approximately 87 percent are owned (including those owned subject to a ground lease), consisting of approximately 196 million square feet, and approximately 13 percent are leased, consisting of approximately 29.3 million square feet. In recent years, The Home Depot has increased the relative percentage of new stores that are owned...."
The value proposition for Lampert would be to convert HD real estate into a real estate investment trust with K-Mart & Sears, monetizing the assets by converting them into a stream of lease payments. The REIT can then raise or borrow capital to expand.
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With a weak U.S. dollar, Lampert could raise capital from their REIT conduit from private equity (specifically from the $2.3 trillion China has in U.S. dollar reserves) to allow foreign investors an ownership in prime U.S. retail real estate.
HD at prices below $27 would be screaming buy for Lampert to do such a "value" deal.
EKS |
