General Growth Properties reports quarterly loss

By Steve Green

Thursday, May 7, 2009 | 2:35 p.m.

General Growth Properties Inc., a big land developer and shopping mall owner in Las Vegas, reported a loss for the first quarter as the economy weakened and the company posted restructuring costs.

The Chicago company, which filed for bankruptcy protection April 16 because of its staggering debt load of $24.6 billion, said Wednesday it lost $396 million, or $1.27 per share in the quarter ending March 31 vs. a profit in the 2008 first quarter of $3.4 million or 1 cent per share.

Revenue of $788.6 million was down from $830.3 million in the year-ago quarter.

On a funds from operations basis, which is common for real estate investment trusts, General Growth said it lost $165.9 million or 52 cents per share vs. a profit in the 2008 quarter of $216.9 million or 73 cents.

The company's Las Vegas operations include Howard Hughes Corp., developer of the 22,500-acre Summerlin planned community. In Summerlin, 7,377 acres remain to be developed and Hughes' land holdings there have a book value of $1 billion.

General Growth also owns several office and retail projects in Summerlin and the Las Vegas area, the best known being its five shopping malls: Fashion Show, Grand Canal Shoppes, Shoppes at the Palazzo, Boulevard and Meadows. Development of another regional mall in Summerlin has been suspended.

General Growth, with 200 regional shopping malls in 44 states, noted in its earnings report that average occupancy at its malls nationwide fell from 92.5 percent at the end of 2008 to 90.9 percent on March 31 as the recession hurt the fortunes of the retail industry. And sales by its tenants fell 6.1 percent year over year, General Growth (GGP) said.

``The declines in Core FFO and FFO are primarily attributable to provisions for impairment, termination income and restructuring costs related to the development of alternatives to address our current liquidity and financing situations,'' the company said in a statement.

Of the bankruptcy, General Growth said: ``The company intends to pursue a plan of reorganization that extends mortgage maturities and reduces its corporate debt and overall leverage. We intend to work with our various lenders and other constituencies to emerge from bankruptcy as quickly as possible while executing on a plan of reorganization that preserves GGP's integrated, national business operations.''