While U.S. commercial real estate fears are ubiquitous, some people are making big money from the panic.
Turns out that Bill Ackman’s Pershing Capital has already made $800 million in paper profits off of its debt and equity positions in the commercial real estate investment trust General Growth Properties (GGP).
Financial Times: “It is a classic good-company, bad-balance-sheet operation,” said Jeff Aronson, co-founder of Centerbridge Partners.
Mr Ackman began accumulating his GGP position in November 2008, said a person familiar with the fund. He spent $50m on stock – priced at under a $1 a share at the time – that is now worth $560m. He invested $100m in unsecured debt now worth $400m. Centerbridge holds $300m in GGP unsecured debt, purchased when it was trading for 30-odd cents on the dollar, a person familiar with the fund said.