The King of Prussia shopping center's Australian landlord tried to sell its half-interest in the East Coast's biggest indoor mall as investment markets collapsed back in 2008. It failed.
But Tuesday, Lend Lease Group said Morgan Stanley Prime Property Fund has agreed to buy its half of the mall for $545 million in cash, plus debt, leaving a profit of $100 million. Lend Lease bought into the mall 15 years ago, paying $110 million. Boss Steve McCann said he was happy, though if that's all he got out of it, he might as well have put his clients' money in the bank.
Is Morgan Stanley signaling renewed confidence in America's malls, despite a wave of store-chain consolidations, the switch to Internet sales, and efforts by local mall operators such as the Pennsylvania Real Estate Investment Trust to place government offices, glowing billboards, and even a casino in underused mall space?
"We're going to decline to comment," said Morgan Stanley spokesman Matt Burkhard.
The price "is down a little" from what King of Prussia would have sold for in the mid-2000's, but it shows high-end malls on busy highways remain "attractive," analyst Jonathan Miniman at ING Clarion in Radnor told me.
The price could still go higher. The deal "is subject to customary conditions precedent for a sale of this type of partnership asset," Lend Lease said, raising the possibility that Simon Property Group, of Indianapolis, the other big investor at K of P, may make a higher bid. Simon didn't return calls.
Simple is good
Mayor Nutter and the Greater Philadelphia Chamber of Commerce stopped last winter's proposal to shift from taxing city business profits to taxing business revenues, as had been proposed by city council members Bill Green and Maria Quiñones Sánchez.
Never mind that the Green/Quiñones Sánchez plan to tax gross receipts looks more honest (it's harder to hide sales than profits), more fair (it's hard to collect an income tax from companies that aren't based here; think Budweiser beer), and new-job-friendly (it exempts small businesses from paying the gross-receipt tax) than the tax on profits.
The chamber has been on the record since the 1980s demanding an end to the gross-receipts tax, and it wouldn't budge. Neither would Nutter.
But Tuesday the Green/Quiñones Sánchez proposal won praise, in its afterlife, as the state's Outstanding Achievement in Tax Reform, from the Pennsylvania Institute of Certified Public Accountants.
How'd that happen? Wouldn't the simpler gross-receipts tax mean less work for tax guys?
"It could impact our business," agreed Philadelphia CPA Robert Hornick, chairman of the group's local tax and legislative committee.
But the accountants' professional groups support simpler taxes, Hornick added. "For taxes to be effective, they need to be simple," he said. He sees the gross-receipts tax as simpler.
That's not to say the accountants are "coming out and saying we support" the Green/Quiñones Sánchez plan, Hornick added. There are winners and losers in their proposal, and who and what they are get addressed in their plan.
What distinguished the Green/Quiñones Sánchez proposal, Hornick concluded, were the powerful research and data its backers provided.
Evidence-based legislation, with plenty of clarity about who wins and who loses - that's what the accountants dare to ask from our elected leaders.
TetraLogic Pharmaceuticals, of Malvern, says it has raised $6 million in new investment funds from Nextech Invest Ltd., of Zurich, Switzerland. That brings the firm's total haul, for the last 12 months, to $43 million. TetraLogic says the money will pay for clinical studies for a drug it says helps target and kill cancer cells.
TetraLogic employs about 20 professionals; the company says more than 100 researchers are working on its trials at the University of Pennsylvania (Abramson Cancer Center), the Fox Chase Cancer Center, and Wistar Institute, all in Philadelphia, among other places.
Coke, the steel-mill fuel, is typically made from bituminous coal. Not from oil, as I wrongly wrote in Tuesday's column.