Las Vegas retail operators post improved results

Thursday, Aug. 1, 2002 | 11 a.m.

Two major real estate investment trusts with significant retail holdings in Las Vegas said they improved their second-quarter results.

Chicago-based General Growth Properties, which owns the Meadows and Boulevard malls, on Wednesday reported a profit, or funds from operations, of $100.6 million, or $1.18 a share. That compares to $81.8 million, or $1.09 a share, in the second quarter of 2001.

General Growth's net operating income rose to $183.4 million, or 56 cents a share, in the second quarter.

Pan Pacific Retail Properties Inc., the San Diego REIT that owns Sahara Pavilion, Cheyenne Commons and Winterwood Pavilion among other Las Vegas Valley shopping centers, said today its profit in the second quarter was $25 million, or 73 cents a share. That compares to a profit of $22.4 million, or 67 cents a share, in the same quarter a year ago.

Pan Pacific's second-quarter net operating income was $17 million, or 51 cents a share.

Officials of both REITs said they achieved their boosted results through raising rental rates on store spaces.

General Growth said its average rent per square foot per year in the first six months of 2002 was $35.08, versus average rents of $32.01 in the first six months of 2001.

The company's average rent for all leases expiring in 2002 is $29.90 per square foot per year, compared to $27.40 in 2001.

Despite the higher rents, occupancy in General Growth's malls rose from 88.2 percent in last year's second quarter to 89.2 percent in the second quarter of 2002.

The occupancy rate in Pan Pacific's retail portfolio hovers around 97 percent, even as the company achieved its 20th consecutive quarter of same-store double digit rent increases.

Pan Pacific executives said they increased rent rates on same-store lease renewals by 13 percent.