It has been years since any retail REITs exercised options to buy back stock. There really was no need. Retail REIT stock prices appreciated at incredible clips for nearly seven years. At the same time, REITs have had plenty of places to put capital in action including acquisitions, development or redevelopment.
Now, though, in the face of the sharpest REIT stock sell-off in years, buyback plans are reemerging. In late July, the largest U.S. REIT, Indianapolis-based Simon Property Group, announced that its board of directors had authorized a common stock repurchase plan enabling the company to buy up to $1 billion of its stock in the next 24 months. A week later, a second regional mall REIT, Chattanooga, Tenn.-based CBL & Associates Properties Inc. authorized a $100 million plan over 12 months.
Beachwood, Ohio-based Developers Diversified Realty Corp. in late June announced a repurchase program of up to $500 million over two years. And the idea has been broached at each of Oakbrook, Ill.-based Inland Real Estate Corp.'s last two board meetings, according to a company spokesperson.
On the individual front, REIT insiders have also been buying (see chart on p. 8). During the second quarter, Chicago-based General Growth Properties CEO John Bucksbaum and CFO Bernard Freibaum combined acquired more than $34 million in company stock in May and June. Freibaum bought the lion's share of that, acquiring 535,000 shares worth about $33 million.