Simon Property Group, Inc.
) disclosed the appointment of the Chief Executive Officer (CEO)
- Mark Ordan - of the unit that it decided to spin-off. This
unit, which is named Washington Prime Group, Inc., will operate
as an independent, publicly traded real estate investment trust
(REIT) and include the entire strip center business and smaller
enclosed malls of Simon Property. Shares moved up $1.02 in past
two days following the announcement this CEO appointment.
Washington Prime Group will initially own or have stake in 98
diversified retail real estate properties - 54 strip centers and
44 malls. This company is expected greatly benefit from the Mark
Ordan's expertise in the real estate sector. He has been
instrumental in some key retail and healthcare REIT deals.
Prior to joining Washington Prime Group, Mark Ordan was the
CEO of Sunrise Senior Living, which was sold off to
Health Care REIT, Inc.
Kohlberg Kravis Roberts & Co.
). Earlier, he served as the CEO at The Mills Corporation and
guided its sale to Simon Property and Farallon Capital
Management. Ordan also founded and presided as the CEO of Fresh
Fields that was bought by
Whole Foods Market, Inc.
As a matter of fact, Simon Property decided to spin-off this
unit in order to increase its focus on the larger retail
properties, namely malls, mills and premium outlets. Form 10 has
already been filed in December and the company anticipated the
transaction to be effective in the second quarter of 2014.
Keeping its winning streak alive, the company also came up
with a solid operating performance during fourth-quarter 2013,
with funds from operations (FFO) of $2.47 per share, 4 cents
ahead of the Zacks Consensus Estimate and 18 cents above the
year-ago quarter figure. The improvement was primarily driven by
an increase in revenues and occupancy rate. The company also
hiked its quarterly dividend payout by 4.17%.
Simon Property currently carries a Zacks Rank #2 (Buy).
FFO, a widely used metric to gauge the performance of REITs,
are obtained after adding depreciation and amortization and other
non-cash expenses to net income.
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