Activist Investors Pursuing REITs

The Wall Street Journal has a story in today's edition on a rise in activist investor involvement in REITs. Specifically, ROCA Real Estate Securities Fund LP has targeted firms like Cedar Shopping Centers and Glimcher Realty and tried to push for changes at the firms.

ROCA sent the letters to Glimcher Realty Trust, Cedar Shopping Centers Inc. and One Liberty Properties Inc., all retail REITs, a sector that has been hit hard in the current downturn. ROCA wanted Glimcher to sell the lowest-quality malls to pare its debt and advised the other REITs to seek buyouts.

As Mr. Hofer sent the letters, Cedar showed signs of being receptive to a possible suitor. Its chief executive says he will present an overture by Inland American Real Estate Trust to his board.

The situation could prove far different with Glimcher. The company is still heavily influenced by the Glimcher family, which took the company public in 1994. The family owns 8% of its stock and keeps a staggered board. Founder Herbert Glimcher is chairman, and his son, Michael Glimcher, is chief executive.

"My guess is, in the case of Glimcher, they'll probably do nothing [in response to ROCA] because they don't have to," says Green Street Advisors analyst Jim Sullivan.

Glimcher representatives didn't return phone calls seeking comment.

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