Adopting orphans in real estate
David Lichtenstein calls them the “orphans” of the real estate world. These unloved properties, hurt by problems real or imagined, are risks that many developers avoid. Yet for Lichtenstein, adopting orphans and leading turnarounds are his specialties.
In late 2003, Prime Retail’s stock had plunged 99 percent as investors worried that a dangerous overload of debt was putting the company at risk. The problems, however, didn’t scare away Lichtenstein, a Rockland County real estate investor who smelled an opportunity to snap up retail properties in good locations. He bought Prime Retail for a mere 18 cents a share — far below the stock’s $16 peak in 1997 — through The Lightstone Group, his privately held real estate company.
Two years after the $625.5 million buyout, a turnaround is well under way, according to Lichtenstein. The deal gave him control of 36 retail outlet centers in 23 states.