When news broke recently on Crain's Chicago Business that Merchandise Mart Properties Inc., which owns Chicago's Merchandise Mart, was on the sales block, it was surprise to many - especially MMPI.
The article stated that Vornado Realty Trust, MMPI's parent company, "has been dropping hints along Wall Street and with potential buyers that it wants to sell the subsidiary, including the fortress-like structure along the Chicago River. The New York real estate investment trust purchased it from the Kennedy family in 1998 for $630 million."
The article continued: "Vornado's efforts already have yielded a $1.25-billion offer, but that deal died last month, people familiar with the negotiations say."
Two days after article was printed, MMPI officials sent out a statement that began: "While we appreciate the interest Crain's Chicago Business has shown in our company, we have an obligation to our tenants, employees and patrons to our buildings and shows to clarify a few points."
The main point MMPI officials wanted to clarify, according to the statement, was that the "allusions and rumors regarding MMPI being offered for sale are erroneous and therefore unhelpful to those involved with our business and to the ongoing, successful relationships which have defined our decades-long history in Chicago and throughout our properties."
The statement continued: "â€¦ there is no book prepared, no retained counsel, no investment banker, no broker, no process being pursued - all things that would indicate a property described as being 'up for sale.'"
MMPI officials also disagreed with the Crain Chicago Business article's representation of MMPI's financial health, adding that "the data presented is far from complete and is not helpful in establishing a fair mood in the market. The article referenced that profitability for MMPI decreased, but that reference was not based on the most recently reported period."
Four days after MMPI's statement, Crain's released another article, "Kennedy confirms owner's interest in selling Mart." In the new article, Christopher Kennedy, MMPI's president, clarified comments he made in the earlier article and said that, while MMPI currently is not for sale, Vornado would possibly consider selling it when market conditions improve. He was quoted in the article as saying: "The fundamental idea is that no matter what, everything they own is for sale if the proceeds can be reinvested at a higher rate of return. That's the life that we live. But that's not possible in this market."
According to MMPI officials, the company is performing well, with a property-wide occupancy rate of nearly 92 percent as of June 30, which they added was "about the same as a year ago."
"Even in one of the most uncertain economic climates of our time, MMPI is strong, and our commitment to our customers, tenants and patrons remains unwavering," MMPI officials added. "We enjoy great leasing velocity and retention rates, a best-in-class management team, an iconic brand in the marketplace, a supportive parent company and a dynamic, entrepreneurial staff committed to the success of our business and our customers."