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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2).
[ ] Definitive proxy statement.
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[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
Malan Realty
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(Name of Registrant as Specified in Its Charter)
Malan Realty
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
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0-11.
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filing fee is calculated and state how it was determined):
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April 25, 2000
MANAGEMENT'S BUSINESS STRATEGY IS ON TRACK.
WE HAVE ACHIEVED RECORD RESULTS
IN EACH OF THE LAST THREE YEARS.
DEAR SHAREHOLDER:
By now you should be aware that Kensington Investment Group has
launched a proxy contest to attempt to take control of your Board of Directors
at Malan's upcoming May 10, 2000 Annual Meeting.
Your management team has consistently followed a corporate strategy
designed to increase revenues and funds from operations, pay a regular and
substantial dividend, strengthen Malan's financial position and enhance
shareholder value. This strategic vision has met with great success, despite the
difficulties in the REIT market. Please note that under current management,
Malan Realty Investors has achieved:
- Three consecutive years of record revenues.
- Three consecutive years of record funds from operations (FFO),
including total FFO increases of 26% in 1999 and 45% in 1998.
- Twenty-three consecutive quarterly dividend payments extending back
to our IPO in 1994, at an annualized rate of $1.70 per share.
- A secure dividend!
In order for all shareholders to gain a broader understanding of
Malan's goals and objectives, we would like to explain each one in more detail.
The four key tactics of our overall business strategy include:
1. Redeveloping and Expanding Existing Properties
Recent redevelopment projects include:
- The expansion of Pine Ridge Plaza in Lawrence, Kansas from 97,000 to
260,000 square feet and the addition of a Kohl's department store.
- In Melrose Park, Illinois, we replaced a former Builders Square store
with a 10-plex Cinemark theater and added a Ruby Tuesday's restaurant
next to the movie theater.
- We replaced a vacant K-Mart store in suburban Chicago with a 17-plex
Cinemark theater.
Result: Properties with significantly increased cash flow and market value.
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2. Re-Tenanting to Diversify the Tenant Mix and Increase Rents
Our recent re-tenanting projects include the addition of Staples, Inc.
and Stage Stores, Inc. in a former K-Mart store in Lincoln, Illinois, a Harbor
Freight and Save-A-Lot grocery in a former hardware store in Topeka Kansas, and
a Westlake Ace Hardware store in a former K-Mart store in Arkansas City, Kansas.
Result: Increase in cash flow and diversification of the portfolio.
3. Making Selective Acquisitions of Shopping Centers with Well-Known Anchor
Tenants
Our most successful recent acquisitions include:
- Thirteen Midwest-based community shopping centers through which we
created strong leasing and operational synergies and diversified the
tenant base.
- The Shops at Fairlane Meadows in Dearborn, Michigan, one of
metropolitan Detroit's premier retail properties. The stores at this
location include Target, Mervyn's Best Buy and Kids `R' Us.
- The Clinton Pointe Shopping Center in Clinton Township, Michigan
which includes such stores as Target, Office Max and Sports
Authority.
- Five Midwestern community shopping centers all of which are anchored
by Wal-Mart.
Result: Diversification of the portfolio and creation of additional operational
synergies.
4. Redeploying Assets and Capital to Improve Our Financial Position
We have followed a conservative capital strategy which involves
obtaining long-term fixed-rate mortgages and redeploying capital obtained from
sales of non-core assets. We have sold assets when we were able to achieve
maximum market value.
We have also re-purchased and retired nearly $12 million total
principal of our 9 1/2% convertible subordinated debentures and raised $21.5
million of equity by issuing 1.3 million new shares in 1998.
Result: Increased strength of our balance sheet.
REJECT THE KENSINGTON NOMINEES.
VOTE MANAGEMENT'S WHITE PROXY CARD TODAY!
The Kensington nominees make bold claims about why they think a new
Board is needed at Malan. Don't be fooled! No matter what they say, remember
that:
- The Kensington nominees offer no business plan at all for Malan.
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- The Kensington nominees have no apparent experience in our core
business -- the management of shopping centers.
- The Kensington nominees do not own a single share of Malan.
In what was ultimately an unsuccessful effort to avoid a costly and
disruptive proxy contest, Malan management offered one seat on the Board to
Kensington - which they promptly rejected. It is clear that Kensington wants
nothing less than total control of your REIT - despite having no business plan
and no shopping center management experience.
YOUR MANAGEMENT IS WORKING HARD
TO ENHANCE SHAREHOLDER VALUE.
OUR FUTURE LOOKS BRIGHT AND THE
DIVIDEND IS SECURE.
We have engaged Prudential Securities, a national investment banking
firm, to advise management on evaluating our strategic alternatives with regard
to the important task of maximizing value for the benefit of all Malan
shareholders.
The potential steps we are exploring include merging with another REIT,
making a strategic acquisition of our own, finding a strategic investor to
purchase a significant position in Malan or selling the entire Company. This
review was completed in the first quarter of 2000 and we will keep you informed
about any decisions we may make with respect to these potential steps.
In the meantime, we will continue to move forward with our successful
business strategy. Remember - history indicates that the market cycle will turn
again and REIT stocks will return to favor. When that occurs, Malan will be well
positioned to take advantage of a more receptive stock market.
MALAN'S ANNUAL MEETING IS MAY 10.
PLEASE VOTE YOUR WHITE PROXY TODAY
With the annual meeting quickly approaching, we ask that you sign, date
and return the enclosed WHITE management proxy card in the postage-paid envelope
provided. Simply ignore the GOLD Kensington proxy card and any materials they
may have sent you.
Remember -- even if you have already voted a GOLD Kensington proxy
card, you have every legal right to change your mind and return the WHITE
management proxy card. In a proxy contest, only the latest-dated card voted will
count in the final tally.
If you have questions about Malan, voting your shares, or changing your
vote, please call us toll-free at (800) 452-3076 or our proxy solicitors,
MacKenzie Partners, Inc. toll-free at (800) 322-2885.
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We appreciate your continuing support of Malan and our strategic
objectives,
Sincerely,
/s Anthony S. Gramer /s Michael K. Kaline /s Elliott J. Broderick
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ANTHONY S. GRAMER MICHAEL K. KALINE ELLIOTT J. BRODERICK
President and CEO Vice President Chief Accounting Officer
