The Fed released its Beige Book today, which is a collection of mostly anecdotal information from across the country. Presented below are key sections of the report along with my reactions to them. "Reports from the 12 Federal Reserve Districts indicated either stabilization or modest improvements in many sectors since the last report, albeit often from depressed levels. Leading the more positive sector reports among Districts were residential real estate and manufacturing, both of which continued a pattern of improvement that emerged over the summer. "Reports on consumer spending and nonfinancial services were mixed. Commercial real estate was reported to be one of the weakest sectors, although reports of weakness or moderate decline were frequently noted in other sectors." This sounds better than the last Beige Book, which in turn was more optimistic than the one before it. What seems clear to me is that ...

Simon Property Group (SPG), a leading real estate investment trust (REIT), reported relatively modest second quarter results, with FFO (funds from operations) of $313.1 million or $0.96 per share, compared to $427.9 million or $1.49 per share in the year-earlier quarter. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

The quarterly FFO figure was negatively impacted by the non-cash impairment charge of $140.5 million or $0.42 per share, related to a decline in the company’s investment in Liberty Property Trust (LRY). Excluding this charge, FFO during the quarter was $453.6 million or $1.38 per share.

Occupancy in the regional malls and premium outlet centers was 90.9% and 97.0%, respectively during the quarter, compared to 91.8% and 98.3% in the year-ago period. Comparable sales in the regional malls decreased to $442 per square feet in

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For Immediate Release

Chicago, IL – August 4, 2009 – Zacks Equity Research highlights Inspire Pharmaceuticals, Inc. (ISPH) as the Bull of the Day and Celanese (CE) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Vornado (VNO), Simon Property Group (SPG) and Host Hotels (HST).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676

Here is a synopsis of all five stocks:

Bull of the Day:

Inspire Pharmaceuticals, Inc. (ISPH) is a specialty pharmaceutical company focused on the development and commercialization of treatments for respiratory and ophthalmologic disorders. Currently, the company has three products on the market and a robust pipeline.

We see strong top-line growth from 2009 and beyond. Inspire just reported positive phase III data of Denufosol for CF. The company has a strong collaborative alliance with Allergan Pharmaceuticals for key products that

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According to the Census Bureau, total construction spending edged up to a seasonally adjusted annual rate of 965.7 billion in June -- a 0.3% increase from May, but down 10.3% from a year ago. However, private construction spending fell 0.1% for the month. Public spending, mostly for schools and roads (via the Stimulus Bill) rose by 1.0% to an annual rate of $321.7 billion, and was the primary reason that total construction spending was up. Within private spending, a rise of 0.5% on residential spending was more than offset by a 0.5% decline in non-residential construction spending. As the first graph below (both graphs are from http://www.calculatedriskblog.com/) shows, non-residential construction spending is now substantially larger ($397.9 billion annual rate) than is residential construction ($246.1 billion annual rate). This has not been the case historically and reflects the massive decline in the housing market over the last few years....

Overall spending on construction declined 0.9% in May from April to a seasonally adjusted annual rate of $965.0 billion. On a year-over-year basis spending is down 11.6%. This means that there has been no real change in the rate of contraction in spending.On a year-to-date basis, spending is down 11.7%. Private construction was once again the culprit as public spending (stimulus?) was up by 0.6%. Private construction spending was down 1.0% for the month and is off 17.4% on a year over year basis.Surprisingly, within public spending, educational construction was up 0.5% and highway spending was down 1.3%. Within private spending, the decline was all due to the residential side, which was down 3.4% for the month and is off 33.9% year over year. Non-residential construction actually inched up 0.5% and is off just 3.3% on a year over year basis. The graph below (from ...

On April 17, I wrote about the massive train wreck coming in commercial real estate. As it turns out, my estimates of the coming devastation - which seemed outlandish to some at the time - have actually turned out to be too conservative. The problem is far worse than anything that’s been reported so far, particularly when it comes to our icon of consumerism: the shopping mall.

With retail losses continuing to accelerate and vacancy rates skyrocketing, malls are going to be one of the biggest losers from the consumer spending slowdown…

Here’s why our shopping malls, and by extension the commercial real estate market, aren’t going to be moving anywhere but down over the next few months - and what you can do about it in the meantime.

Don’t Be Fooled By Housing Starts Recent Uptick…

Much has been made of the recent uptick in housing starts in May, but don’t be

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The Commercial Real Estate Fallout: Profiting From the Death of the Shopping Mall

by David Fessler, Advisory Panelist

On April 17, I wrote about the massive train wreck coming in commercial real estate.

As it turns out, my estimates of the coming devastation - which seemed outlandish to some at the time - have actually turned out to be too conservative.

The problem is far worse than anything that’s been reported so far, particularly when it comes to our icon of consumerism: the shopping mall.

With retail losses continuing to accelerate and vacancy rates skyrocketing, malls are going to be one of the biggest losers from the consumer spending slowdown…

Here’s why our shopping malls, and by extension the commercial real estate market, aren’t going to be moving anywhere but down over the next few months - and what you can do about it in the meantime.

Don’t Be Fooled By Housing

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I’m confident that the trend for REITs will be down through the end of 2009. That’s why I suggest buying the UltaShort Real Estate ProShares ETF (NYSE: SRS. Current price $18.52) as a way to profit from weakness in the REIT sector. But fasten your seatbelt! SRS will be volatile!

REITs may appear cheap, but they are very dangerous to hold right now. A basic tenet of corporate finance is that a company or a sector is only creating value for shareholders if its return on invested capital (ROIC) exceeds its weighted average cost of capital (WACC). If its WACC exceeds its ROIC, it is destroying value. This describes the situation facing the REIT sector for the next few years.

Most REITs cannot float unsecured debt at anything less than 10% or 12%, so their cost of capital is high and rising. At the same time, due to the

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I’m confident that the trend for REITs will be down through the end of 2009. That’s why I suggest buying the UltaShort Real Estate ProShares ETF (NYSE: SRS. Current price $18.52) as a way to profit from weakness in the REIT sector. But fasten your seatbelt! SRS will be volatile!

REITs may appear cheap, but they are very dangerous to hold right now. A basic tenet of corporate finance is that a company or a sector is only creating value for shareholders if its return on invested capital (ROIC) exceeds its weighted average cost of capital (WACC). If its WACC exceeds its ROIC, it is destroying value. This describes the situation facing the REIT sector for the next few years.

Most REITs cannot float unsecured debt at anything less than 10% or 12%, so their cost of capital is high and rising. At the same time, due to the

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The real estate sector has been considered off-limits to most investors during the last year. But according to recent data and indicators, REITs are worth a look.

Now that winter is over and it is officially lawn-mowing season here in the Northeast, it is much easier to determine which homes are in foreclosure.

On my way home from the office, I pass at least half a dozen homes with grass so high and so out of control it is going to take a hay baler to get things back to normal. On their front door is a little sticker explaining the situation.

But if today’s economic data is any indication, it may not be much longer until a new set of mortgage-paying owners are zig-zagging their shiny, new lawn mowers across the yard.

According to the National Association of Realtors’ pending home sales index, which jumped an unexpected 6.7% to a reading of 90.3

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