Showing posts with label Tronc. Show all posts
Showing posts with label Tronc. Show all posts

Wednesday, September 27, 2017

"This Is Not A Time To Buy Anything" - Sam Zell Warns Retail Real Estate Market Is A "Falling Knife"

CNBC"s cheerleading staff had a very difficult time finding the silver lining in retail investing this morning as they relentlessly pressed Sam Zell on the value of commercial real estate.  Asked to offer up his thoughts on where retail real estate is headed over the next five years, Zell highlighted the significant excess inventory in the U.S., 4-5x more per capita than Europe, and said investing in the space right now is like catching a "falling knife."





"Like a falling knife.  You start with the fact that the U.S. has 4 or 5 times the amount of square footage per person of retail as anywhere else in the world.  So we start with an enourmously large inventory of retail."



"3 years ago your could buy an 8% mall...you could buy a B-mall and it was probably an 8% cap rate.  The same mall, 3 years later, is now selling at 13% and 14%.  So you"ve seen enourmous erosion of value."



"When the knife falls there"s going to be plenty of opportunities for people to step up and say "what are alternate uses?""



Pressed on whether now just might be the time to take a contrarian view on the collapsing retail space, Zell again was unable to satiate the desires for positive news from his eager hosts.





"An area that"s in this much disarray, with so many weak players, is not an area where I would want to deploy capital at this time.  And I"m generally a contrarian but I think what we"re dealing with here is very significant."





Of course, things only went from bad to worse for the CNBC hosts when Zell offered up some positive commentary on Trump"s presidency. Per CNBC:





Corporate America is willing to invest money on a longer-term basis under President Donald Trump than the previous "anti-business administration" of Barack Obama, real estate mogul Sam Zell told CNBC on Tuesday.



"Bluntly, the only way I can square anything is I focus on what gets done, not what"s said," the billionaire said on "Squawk Box." "On a measure of what"s gotten done, I believe there"s been very significant change since Trump was elected in November, and change that is positive."



Zell points to deregulation and promises of tax cuts and massive infrastructure spending as major positives for business.



"Just think that all of a sudden there are no industries that are pinata[s] of the president," Zell said, referring as an example to what he called Obama"s campaign against fossil fuels.



"I"m more optimistic than I was six months ago. But I"m not ready to party," Zell told CNBC on Tuesday, adding the current business environment is not one of buy anything and win. Investors need to pick carefully, he added.





Meanwhile, the most shocking part of the interview segments above is that CNBC didn"t encounter any "technical difficulties" as Zell offered up his positive comments on the Trump presidency while taking a shot a Obama.

Saturday, July 15, 2017

Republican Operative Behind WSJ Collusion "Bombshell" Committed Suicide

A longtime Republican operative from Chicago’s North Shore who was at the center of a confusing Wall Street Journal story involving shadowy Russian hackers and Hillary Clinton’s 30,000 missing emails committed suicide, according to the Chicago Tribune. Peter W. Smith, 81, a former private equity executive and longtime political operative, killed himself in a Minnesota hotel room days after telling his story to a reporter from WSJ, according to the Chicago Tribune.


Smith left a carefully prepared file of documents, including a statement police described as a suicide note in which he said he was in ill health and that a life insurance policy was expiring.


Smith"s death, which occurred on May 14, 10 days before the story was published, was one of the most bizarre developments in a hard-to-follow WSJ story that tried (and in our estimation, failed) to implicate former National Security Adviser Michael Flynn in a sinister plot to enlist the help of some Russians to hack the 2016 election...thus "proving" collusion.


In the story, Smith recounted to WSJ his mission to find Hillary Clinton’s missing 30,000 emails – the holy grail of opposition research – which he organized late in the summer of 2016. The project began over Labor Day weekend when Smith, who as WSJ notes had been “active in Republican politics,” assembled a group of technology experts, lawyers and a Russian-speaking investigator based in Europe to acquire emails the group theorized might have been stolen from the private server Mrs. Clinton used as secretary of state. Smith believed that, once found, at least some of the emails would prove to be relevant to her official duties at the State Department, handing the Trump campaign an enormous PR victory and possibly proving that she knowingly misled investigators.


Smith & Co. scoured hacker forums, ultimately finding 5 groups who claimed to have the missing emails, 2 of which were Russian.  However, Smith seemingly doubted the authenticity of the intelligence he received and, as a result, never leaked their contents.



Even more confusing, Smith says he eventually turned over the emails to Wikileaks, but the group hasn’t published them, and denies ever having received them. Smith told the WSJ reporter that he’d considered Flynn an ally, but stopped short of alleging that the two worked together on the project.


Of course, it"s only deep in the story that the WSJ admits they have no idea if Flynn was even involved with Smith...but no one reads an entire article so it"s fairly irrelevant.





What role, if any, Mr. Flynn may have played in Mr. Smith’s project is unclear. In an interview with The Wall Street Journal, Mr. Smith said he knew Mr. Flynn, but he never stated that Mr. Flynn was involved.



And another irrelevant detail from the WSJ:





Mr. Smith said he worked independently and wasn’t part of the Trump campaign.



Smith was found with a bag over his head with a source of helium attached. A medical examiner"s report gives the same account, without specifying the time, and a report from the Rochester, Minnesota police further details his suicide, according to the Chicago Tribune. Smith"s death occurred at the Aspen Suites in Rochester, records show. They list the cause of death as "asphyxiation due to displacement of oxygen in confined space with helium."


In the note recovered by police, Smith apologized to authorities and said that "NO FOUL PLAY WHATSOEVER" was involved in his death. He wrote that he was taking his own life because of a "RECENT BAD TURN IN HEALTH SINCE JANUARY, 2017" and timing related "TO LIFE INSURANCE OF $5 MILLION EXPIRING."


Mystery shrouded how and where Smith had died, but the lead reporter on the stories said on a podcast he had no reason to believe the death was the result of foul play and that Smith likely had died of natural causes.


Smith had been staying at the hotel – in a room typically used by patients of the Mayo Clinic - for several days and had extended his stay at least once but was expected to check out on the day his body was found. "Tomorrow is my last day," Smith told a hotel worker on May 13 while he worked on a computer in the business center, printing documents, according to the police reports.


One of Smith"s former employees told the Tribune he thought the elderly man had gone to the famed clinic to be treated for a heart condition. Mayo spokeswoman Ginger Plumbo said Thursday she could not confirm Smith had been a patient, citing medical privacy laws.


Smith had a history of doing opposition research against President Bill Clinton and had a hand in exposing the “Troopergate” allegations about Bill Clinton"s sex life.


His obituary said Smith was involved in public affairs for more than 60 years and described him as a "quietly generous champion of efforts to ensure a more economically and politically secure world." Smith led private equity firms in corporate acquisitions and venture investments for more than 40 years. Earlier, he worked with DigaComm LLC from 1997 to 2014 and as the president of Peter W. Smith & Co. from 1975 to 1997. Before that, he was a senior officer of Field Enterprises Inc., a firm that then owned the Chicago Sun-Times and was held by the Marshall Field family, his obituary said.


Smith"s last will and testament, signed last Feb. 21, is seven pages long and on file in Probate Court in Lake County, Illinois. The will gives his wife his interest in their residential property and his tangible personal property and says remaining assets should be placed into two trusts.


He was born Feb. 23, 1936, in Portland, Maine, according to the death record.


His late father, Waldo Sterling Smith, was a manufacturer"s representative for women"s apparel firms, representing them in department stores in Maine, New Hampshire and Vermont, according to the father"s 2002 obituary. The elder Smith died at age 92 in St. Augustine, Fla., and his obit noted that he had been active in St. Johns County, Fla., Republican affairs and with a local Methodist church. Peter Smith wrote two blog posts dated the day before he was found dead. One challenged U.S. intelligence agency findings that Russia interfered with the 2016 election. Another post predicted: "As attention turns to international affairs, as it will shortly, the Russian interference story will die of its own weight."