BINGHAM FARMS, Mich., Jan. 22 /PRNewswire-FirstCall/ -- Malan Realty
Investors, Inc. (NYSE: MAL), a self-administered real estate investment trust
(REIT), provided information today on its exposure to Kmart Corporation
(NYSE: KM) and the potential impact of Kmart's bankruptcy filing on the
Company's operating results for 2002.
Malan has 27 properties leased to Kmart and derives approximately
25 percent of its annualized base rents from Kmart.
"While Kmart has not informed us of any stores it intends to close in our
portfolio, we estimate Malan has a potential exposure on approximately 6 to 12
properties," said Malan Chief Executive Officer Jeff Lewis. "The likely
scenario is that of these 6 to 12 properties, Kmart may reject the leases on
some of these properties while closing stores and subleasing the space on the
others. Several of the properties present opportunities for repositioning and
re-tenanting due to below-market rental terms in the Kmart leases. Our
ability to redevelop or re-tenant these stores will depend mainly on the
property's location and market conditions in each community."
The company estimates that depending on the number of store closings or
lease rejections, if any, funds from operations (FFO) could be reduced up to
$2.2 million or 43 cents per share annually. Cash available for distribution
(CAD) could be reduced even further, depending on costs incurred to re-tenant
and re-lease any closed stores. These estimates do not include any future
rents that would be due from Kmart under the bankruptcy laws or revenues from
re-leasing any Kmart space.
Malan believes that the other Kmart stores in its portfolio will be
unaffected by the bankruptcy filing because they are well located within their
communities, are generating sales at acceptable levels and have relatively low
occupancy costs. Commenting on Malan's corporate strategy, Lewis said, "Malan
will continue to focus on debt reduction through the sale and refinancing of
currently owned properties. The decisions on Kmart leases should ultimately
lift some of the uncertainties about our portfolio and enable us to proceed
with actions that will strengthen Malan's financial position."
Malan Realty Investors, Inc. owns, acquires, redevelops and manages
properties that are leased primarily to national and regional retail
companies. The company owns a portfolio of 58 properties located in nine
states that contains an aggregate of approximately 5.4 million square feet of
gross leasable area.
Safe Harbor Statement: This news release contains forward-looking
statements. Although the company believes that the statements and projections
are based on reasonable assumptions, actual results may differ from those
projected. Key factors that could cause actual results to differ materially
include litigation costs, development risks such as unanticipated costs,
economic downturns, bankruptcies including the ultimate disposition of lease
agreements with Kmart Corporation and other financial difficulties of tenants,
and other risks associated with the commercial real estate business, and as
detailed in the company's filings from time to time with the Securities and
Exchange Commission. Many of these factors are beyond the control of the
company. Malan does not undertake to update these forward-looking statements.
News releases for Malan Realty Investors are available on the company's web
site at http://www.malanreit.com or through Company News On-Call by fax at
(800) 758-5804, ext. 114165, or http://www.prnewswire.com .
SOURCE Malan Realty Investors, Inc.
 back to top
Related links:
http://www.prnewswire.com
http://www.malanreit.com
CONTACT:
Elliott Broderick, Chief Financial Officer of
Malan Realty Investors, +1-248-644-7110, or Fred Nachman of
Marjan Communications Inc., +1-312-867-1771
CNOC: http://www.prnewswire.com/gh/cnoc/comp/114165.html
|
