Wednesday, July 20, 2011

Syms Evaluates It's Real Estate.

From here:

Syms Corp. SYMS -1.40% announced today that its Board of Directors has engaged the services of Cushman & Wakefield, the global commercial real estate advisory firm, to work with Rothschild and advise the board as the company explores and evaluates various potential strategic alternatives.

There is no defined timeline for this strategic review and there can be no assurance that the review of strategic alternatives will result in any specific action or transaction.

It's nice to see that the company is finally listening to the minority shareholders of the company and may actually be trying to do something with their real estate, other than use it to subsidize it's broken retail business.

It is great that the guys at Esopus Creek are keeping pressure on the company. If it were not for them exercising their rights, the company would likely be trading for substantially less than it is at present. Additionally, with the company actively reviewing the options that are available to it, it seems that they see a lot of potential possibilities for the company... I am sure that any of the ones that Rothschild and Cushman & Wakefield present will do better for shareholders than the previous attempts to run a retail business that simply doesn't have the resources to compete with the big players like TJ Maxx, Marshall's, Men's Wearhouse, Gordman's, and many others.

In light of this, it will be interesting to see what happens in the coming court case. Regardless, I don't see how any adviser with 1/2 of a brain won't recommend that the company closes the Trinity store and sell it off for development. That seems to be the bare minimum that the company can do. Don't believe me? Check out the logic that Esopus Creek used in their 13D.

A suitable candidate for such development might include your 42 Trinity Place (“42 Trinity”) location in lower Manhattan, a footprint which enjoys over 170,000 square feet of buildable space based upon our research.

And just to illustrate the enormous value that has yet to be unlocked by the Company, on April 17, 2008, just four days ago, New York City property records revealed that a nearby parcel located at 8 Stone St., having approximately 100,000 buildable square feet and the same zoning characteristics as 42 Trinity, sold for over $60 million to a hotel developer. This transaction equates to $600 per buildable square foot thus implying a valuation for 42 Trinity at $102 million.

Furthermore New York City tax records estimate 42 Trinity’s net operating income at just $1.351 million dollars per year. Thus an asset worth an estimated $102 million is generating a meager 1.32% of annual income.

Disclosure: Long SYMS. This is not advice of any kind. Always do a ton of your own research in regard to anything that I say, do, write, or so much as even think about.

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