MMPI’s portfolio has so many issues that the “discount” still seems rich to me (for example, 36%+ vacancy rate, 20% of leases are month-to-month, development projects that require further land purchases, negative cashflow, etc.) There are several holding here that are worth looking at carefully, but the problem is breaking them out of MMPI’s portfolio to capture the potential Ranieri is talking about. (I have no position in MMPI, long, short, or sideways.)

That was the reason for my comment on the size of the float, and “trade by appointment.” This may be bigger than the pink sheets, but it doesn’t mean it isn’t subject to similar tactics (pump and dump, just not as extreme due to large amount outstanding).

And it is weird Bloomberg is covering a story with so little dough at stake.

The other reason I took interest, aside from curiosity, is that at the Milken conference, Lew Ranieri mentioned that a lot of commercial RE developers were or were about to be in default on their deals. Often this is for reasons a bank might waive upon inspection (or charge a fee, or up the rate a bit), like not meeting lease up targets, but the banks are pulling the loans if they have an excuse. They need to shrink their balance sheets, development is risky, so to them it’s a no brainer.

Ranieri said some of these were good deals, the developer has 20-40% equity (of course, this begs the question of where you get the debt) and some were in very good locations.

Now this isn’t precisely that kind of situation, but it does have an element of banks shedding development risk.

Or am I reading this wrong? Your input appreciated.

If the reporter can’t read a 10-K, he could at least note that Becker Capital, quoted in the article, recently sold 11.5% of its MMPI stake (filing of 5/2/08).