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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (6905)	4/22/1999 11:40:00 PM
From: Bob Rudd	Respond to of 78519

Armin: One of the appealing aspects of mall REITS, is the stability of cash flows from long term leases, 3 years or so...I suspect there would be significant costs to breaking them. I would look for an attrition as the leases run out. With 3+ times as many Waldens as superstores, it would seem to be a drag. Course there's always the big bath, get out at any cost approach...wouldn't want to own the stock the day they announce that. The cost structure of mall-based stores doesn't lend itself to what would be considered deep-discount in todays world. Walmart, Best Buy, Target, etc...offer good sellers at 20 to 40% off. The Waldens already competing with this. Not so good sellers have to carry enough margin to offset inventory and return cost. Before the net, this was a low-margin business...now it's a no-margin business..the mall stores that is.