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Analysts bemoan mall REITs’ lack of disclosure

Retail REITs and mall REITs in particular need to improve the flow of information to their investors, according to Wall Street analysts. In a recent report titled "REIT Disclosure — Give the Owners What They Want," Salomon Smith Barney analysts Jonathon Litt and Ross Nussbaum discuss the shortcomings many REITs face in providing detailed information on development projects. According to Litt and Nussbaum, standard information on cost and yield is often difficult to come by from retail companies.

"In the retail REIT sector, disclosure on developments runs from very good to very bad," Litt said in the report. "In our opinion Regency Centers and New Plan Excel do an admirable job of keeping the market informed, while Taubman is, in our minds, the weakest in this department."

The report cites the industry’s largest players as failing to supply sufficient data: Bloomfield Hills, Mich.-based Taubman Centers, Chattanooga, Tenn.-based CBL & Associates, Indianapolis-based Simon Property Group, Chicago-based General Growth Properties, Arlington, Va.-based The Mills Corp. and Santa Monica, Calif.-based The Macerich Co.

Expected yields are the information most often kept secret, the analysts said. Estimated costs, amount funded, completion dates, pre-leasing levels and the amount of non-revenue enhancing vs. revenue-enhancing expenditures are among the other figures the analysts said retail REITs should share more freely.

"Unlike the mall REITs, most shopping center companies do a good job of keeping the market informed about the status of their developments," Litt said in the report. He points out Atlanta-based IRT Property Co. as an example of a shopping center REIT that, though small, provides adequate disclosure.

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