NEW YORK (
(TCO - Get Report) is getting its financial house in order as it refinances its deals to better terms, and CEO Richard Taubman is encouraged by the reception the company's refinancings have gotten from the capital markets so far.
The Bloomfield Hills, Mich., real estate investment trust and mall development company refinanced its Detroit property The Mall at Partridge Creek in June and it has two more lined up for new financing in the third quarter.
In the near term, Taubman's retail clients are focused on shoppers. Consumers tightened up on spending in May and June, bringing back talk of a double-dip recession. However, luxury retailers fared better than others.
"We believe that a rebound in luxury spending aided by an improving economy bodes well for TCO, whose properties cater to affluent consumers," wrote Standard & Poor's analyst Robert McMillan in a recent research note. McMillan has a hold rating on Taubman shares but his 12-month price target of $46 represents a premium of more than 15% to current prices.
Wall Street is on the fence about the company. Of the 12 analysts covering the stock, eight have hold ratings. One outstanding issue is its The Pier Shops property in Atlantic City. It is the only loan Taubman has defaulted on and the property owner Atlantic Piers Association went into foreclosure in April. The company wrote down the property after the cash generation became too low to cover the debt.
Chairman and CEO Robert Taubman spoke with
recently about the health of the consumer and other topics.
TheStreet: How is the consumer doing? What are you seeing with the retailers in your malls?
Well we actually think they're doing pretty well in our centers and we see that for the consumers and those that have jobs it is a long recovery and clearly unemployment is going to be very difficult for a while, technical unemployment. But those that have jobs, a year, a year and a half ago, they thought they might lose them and they pulled back.
Now they don't feel that way, they feel very confident in their jobs and therefore they are spending money and so we see that in our centers and our centers over the last couple of quarters have performed very well.