The Real Deal Miami

Taubman, retail co-developer of Miami Worldcenter, at odds with hedge fund

Land & Buildings wants to replace Taubman CEO Robert Taubman and director Myron E. Ullman
May 09, 2017 01:30PM

A street-level view of Miami Worldcenter’s retail pedestrian promenade.

Taubman Centers, which operates Dolphin Mall and is planning the retail component of Miami Worldcenter, is battling with activist investor Jonathan Litt’s hedge fund, after it filed documents to nominate Litt and a corporate governance guru to Taubman’s board.

Taubman, a Bloomfield Hills, Michigan-based real estate investment trust, said in a filing with the Securities and Exchange Commission that it has reviewed the nominees from the hedge fund, Land & Buildings Investment Management LLC, and decided its own candidates are much more qualified, the Wall Street Journal reported.

Land & Buildings wants its own nominees to replace Taubman Chief Executive Robert Taubman and lead director Myron E. Ullman III at the company’s annual meeting in June, according to the Journal. Litt is founder and chief investment officer of Land & Buildings, which owns about 1.2 percent of the REIT.

Mall operators are struggling as retailers across the country close shops and file for bankruptcy protection, amid heated competition from online shopping. Publicly traded mall operators are seeing shareholders push them to slash costs and sell off assets.

Taubman currently operates 27 shopping centers in the United States and Asia, including the Dolphin Mall in Miami and the Beverly Center in Los Angeles, as well as malls in Orlando, Tampa, Sarasota and Naples. It is also in charge of the retail mix, along with the Forbes Co., at the upcoming Miami Worldcenter. The developers last year scrapped plans for an enclosed mall in favor of high street retail

In the first quarter, Taubman reported 3.9 percent growth in net operating income and 1.2 percent growth in sales per square foot compared with the same period a year earlier. Occupancy remained at 92.3 percent as of March 31, unchanged from a year earlier, the Journal reported.

But analysts have noted that its occupancy may be questionable after the firm raised its 2017 guidance for income from lease cancellation to $10 million to $12 million from $5 million to $6 million. It is customary for a tenant to pay a termination fee to the landlord when it breaks its lease, according to the Journal. [WSJ] — Ina Cordle