CHICAGO – General Growth Properties Inc. (NYSE: GGP), the owner of Providence Place mall and the Silver City Galleria in Taunton, and one of the nation’s largest real-estate investment trusts (REITs), today posted steep losses for the three months ended Sept. 30 as land sales plunged and the retail industry declined.
The company last week announced a management shakeup and plans to sell its Las Vegas properties. (READ MORE)
Now, corporate executives “together with their financial and legal advisors, continue to comprehensively examine all financial and strategic alternatives for the company – including, but not limited to, sales of both core and non-core assets, sales of joint venture interests, corporate level capital infusions and broader strategic business combinations,” GGP said in this morning’s report.
Meanwhile, it said, the company has deferred “all future development expenditures, other than expenditures for projects that are near completion and approved projects at our jointly owned properties,” and suspended its regular quarterly dividend for the 2008 third quarter. (A second-quarter dividend of 50 cents per share was paid during the quarter just ended, GGP said.)
Its third-quarter loss grew 64.71 percent to $15.41 million, compared with a year-ago loss $9.36 million, on total revenue that fell 5.73 percent to $814.70 million, the company said today. The loss per fully diluted share widened to 6 cents from the year-ago 4 cents.
GGP cited “lower land sales and provisions for impairment” that were “partially offset by the $15.1 million net of minority interest – or approximately 6 cents per fully diluted share – recognized on the previously reported sales of certain office parks.”
Minimum rents edged up 0.87 percent compared with the 2007 third quarter to $514.19 million. Tenant recoveries were essentially unchanged at $321.55 million, or 0.07 percent less than a year ago. But revenue from overage rents dipped 9.67 percent to $14.56 million, the company said. Management and other fee revenue fell 18.56 percent to $21.56 million. And third-quarter land-sale revenue plummeted 88.64 percent to $6.16 million, from the year-ago $54.19 million.
The master planned communities segment, dragged down by the dormant real estate market, posted a third-quarter operating loss of $39.07 million on land sales of $19.30 million. But excluding a $40.34 million provision for impairment, it posted operating income of $1.28 million, GGP said.
The retail and other segment posted third-quarter operating income of $622.46 million – $525.73 million from consolidated and $96.74 million from unconsolidated properties – on total property revenue of $935.63 million, GGP said. Revenue from consolidated properties edged up 0.4 percent to $784.27 million, while revenue from unconsolidated properties rose 3.8 percent to $151.36 million.
Retail center occupancy dipped to 92.7 percent on Sept. 30 from 93.2 percent a year earlier. (READ MORE) Third-quarter sales per square foot fell 0.7 percent compared with the year-ago period as vacancies rose, the company said, but comparable-tenant sales rose 0.3 percent compared with the 2007 third quarter.
Third-quarter highlights included “approximately $47 million of non-core asset sales,” plus the July signing of a $1.51 billion secured credit line, GGP said.
More recently, the company obtained $225 million in new short-term secured financing. “As a result, all loans previously scheduled to mature in 2008 through the date of this release have been refinanced, continued or repaid,” the company said.
Yet GGP still needs to obtain refinancing or extensions for $900 million of property-secured debt and $58 million of corporate debt that are slated to mature this month. “As previously announced,” GGP said, “the company is working with its syndicate of lenders for the property-secured debt – for Fashion Show and The Shoppes at The Palazzo, two of our premier Las Vegas properties – to extend the Nov. 28 maturity dates and is marketing these properties for sale.”
General Growth Properties Inc. (NYSE: GGP) is one of the nation’s largest publicly traded real estate investment trusts (REITs) based on market capitalization. GGP’s portfolio includes about 200 million square feet of retail space and more than 24,000 stores, as well as stakes in various master planned community developments and commercial office buildings. Additional information is available at www.ggp.com.
