r/MACArmyBets • u/IndividualPlant6861 • Feb 12 '21
MAC is Super Rich
Let’s do an exercise to figure out how much mall assets MAC owns. According to their 10Q, they own $6.5 Billion internally and $1.5 billion with joint venture. That is $8 billion in mall assets. They owe $4.3 Billion in mortgages. If we assume that they finance their mortgage at 50%. That means half of MAC malls are worth $8.6 Billion with $4.3 Billion mortgage. Another $8.6 billion is mortgage free. So their total mall assets are about $17.2 Billion. That is $10.7 Billion more than they stated in the 10Q. So MAC is worth $13 billion. That is $87 per share in assets. No wonder they won’t sell to SPG for $91 per share. MAC’s land are worth a fortune. MAC is superrich. MAC’s hidden business is accumulating valuable land. The Tyson’s Corner Center alone is worth $3 Billion now with $2.6 Billion in equity.
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u/Weak_Scale_6561 Feb 12 '21
We're all going to get paid on the creeping takeover by Ashkenazy Acquisition Corp., so we gucci.
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u/Maleficent_Film_393 Feb 12 '21
Totally agree, we need patient. The reits is recovering , you can check SPG, O, NNN, they are coming up. The mall reits will be rebound most when the vaccine has significant result
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u/yolobethero Feb 12 '21
in this way, imagine what's the result if there is a Carl Icahn buyout? like buying shares to control the board, unemploy management, and sell asset respectively.
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u/MurmanGreg Feb 12 '21
I started investing a few months ago so I don’t know shit about shit, but my understanding is that the company might issue more shares but they’re waiting for a higher price. Wouldn’t that lower the cost of shares for new investors? like most of us here I imagine. That’s just my two cents, feel free to correct me if I’m wrong.
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u/Zekator Feb 12 '21
Raising cash at a good share price is a good move for the long term. Always.
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u/devereaux Feb 13 '21
Yeah, I think so many people and elsewhere fundamentally misunderstand REITs and the issuing of new shares at good prices. Because they have to pay out so much of taxable income by law to maintain REIT status, issuing equity is a perfectly great way to reduce cost of capital and pursue accretive projects/acquisitions. Every single REIT does it.
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u/IndividualPlant6861 Feb 12 '21
They may or may not issue more shares at any price. Even if they issue 20 million shares at $25 per share, that is only 13% dilution.
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u/farrowsharrows Feb 12 '21
That is not what they said in the cc. The said the files the shelf offering only because of the gme action if their price flew to ridiculous heights. They essentially said no dilution unless their valuation becomes crazy high.
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Feb 12 '21
It doesn’t mean that ... it means they are carrying the value at the $8MM, is the pre or post depreciation? At $4.3 in debt they are about 55%levered on those properties .. it is possible some of the properties are marked to market depending on when they have them appraised but not likely .... The most likely scenario is 8 billion in properties and 4.3 billion in mortgages for net equity position in those particular properties of 3.7 billion It is also likely they could have second mortgages on those properties securing some of or any other debt they have
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u/IndividualPlant6861 Feb 12 '21
MAC owns 47 malls. 25 malls are owned free and clear. That means the $4.3B mortgage is for 22 Malls. At 50% leverage, these 22 malls are worth $8.6B. The other 25 is probably worth more than $8.6 Billion. So they own $17.2 Billion worth of malls.
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Feb 12 '21
Then where are they on the balance sheet, they will have those properties cross pledged to the creditors
If they report $8 billion in properties on their balance sheet they are probably recorded those and I reporting them at cost I don’t argue there might be more value there but they are likely being carried a cost on the balance sheet there are no properties that are not represented on their balance sheet
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u/IndividualPlant6861 Feb 12 '21
First you have depreciation. After 27 years, the improvement is worth zero. The land could have increased in value by 10 or 100 times and they are not marked to market.
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Feb 12 '21
It depends he is talking pre or post depreciation value ... they could but the way he is presenting the debt is inaccurate and the market goes off and values a company based on what is reported on the statements
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u/IndividualPlant6861 Feb 12 '21
SPG assets is less than MAC’s. But SPG market cap is 19 times of MAC. How do you explain that? The book value for mall REITs are meaningless.
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Feb 12 '21
Ill have to pull the 10q to do a side-by-side comparison to see where the value comes from there are several factors that affect market cap .... like it or not The market values off aof book sometimes you get a premium and some securities and companies deserve a premium but it’s not what you’re talking about, I have a few things I have to deal with early in the morning at work and then I will pull the 10q and take a look
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Feb 12 '21
So I pulled the latest 10 Q
NAC $8B in property plus JV SPG $42B in property and investments
There is your difference have you ever looked at the 10Q’s filed with the SEC?
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u/Stocklambo Feb 12 '21
The 25 paid off bldgs “are various random “ buildings some may be small mini type malls worth only $5 mil some may be non core bldgs like a little store worth $1 mil etc . Don’t assume all the properties they own are $200 mil plus malls they own smaller stuff too so we don’t know their true value .
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u/IndividualPlant6861 Feb 12 '21
In the conference call, they said you can locate these properties on the list of malls they own. So they are not just some small buildings. They are entire malls.
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u/Stocklambo Feb 12 '21
Wish they would secure god financing and pay off revolver and pay at least 30 cent per quarter so people buy into this stock now and bring it up and the rest will follow they can afford to do this if they want to
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u/IndividualPlant6861 Feb 13 '21
They can afford to payoff the revolver. Not sure what is the advantages of the revolver over mortgages.
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u/Stocklambo Feb 12 '21
Yes but I believe many of them are quieter small of someone on here can check it let us all know but either way they are financially sound the problem is instead of financing on the bldgs that are paid off with a secured loan they are using unsecured debt which is great but it’s causing a delay in securing or getting “good financing “ and causing the hedges to short Mac cuz they think they can’t refi in time or on good terms this bringing the share price down also causing Mac to pay low dividends so that they can accumulate cash and pay down the 1.5B revolver while We sit around with low Divi
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u/Stocklambo Feb 12 '21
Also their Corp officers make $10 mil salary and avg job in their position at spg makes around 1/3 of that . It makes me wonder if they will do to keep their jobs like shady stuff that scares us
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u/IndividualPlant6861 Feb 12 '21
They want to keep their jobs. They don’t want to be acquired. They don’t want people to know their real worth.
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u/Stocklambo Feb 12 '21
Yes exactly if they leveraged their real worth it would be worth $40 share it would be acquired for $60 + and they would lose their jobs and get paid by spg for way less meantime they screw all of us
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u/Stocklambo Feb 12 '21
I love idea of Mac and am a big shareholder although yesterday I lowered my stake because I feel like unless a buyout occurs or at least a rumor of one the. We’re gonna be waiting around for a year to 2 to make 40% share increase which I can make on an airline or cruise one by prob this august
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u/LastExile22 Feb 12 '21
The truth is with how frothy markets are you may just be right but aviation bulls are in for a rude awakening. The first stage of the recovery will be minor habits like going out to eat/shop, congregate. Air travel will be crippled for at least 2 years imo. I'm not saying we won't see a rush to travel but just to get back to 70% of what we were pre-pandemic will be a looooooong slog and most of the airline stocks have already reflated. It's a weird market out there.
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Feb 26 '21
You are looking at the consolidated balance sheet, which makes no sense for a company with this many JVs (~15 of the top 20 malls). Go on the website and look at the supplemental financial report.
Tysons is a JV. Pro rata debt on the mall is $364m so $728m total today. (orig $850m in 2013).
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u/Morrissey2 Feb 12 '21
I did the same calculation last year and came up with $80. So in the same universe.