By Josh Beckerman
General Growth Properties Inc. reported lower revenue for its
first quarter, though funds from operations, a key industry metric,
edged up.
General Growth, the nation's second-largest mall owner by number
of properties, has been slimming operations and accelerating its
redevelopment pipeline since exiting bankruptcy in 2010.
The company has increased its focus on upscale urban locations,
including Fifth Avenue in Manhattan and Michigan Avenue in Chicago.
Earlier this month, it bought the Crown Building on Fifth Avenue
for about $1.775 billion.
At the same time, store closings by J.C. Penney Co. and Sears
Holdings Corp. have posed a threat to the mall industry, as the
loss of anchor tenants can cause remaining stores to leave or
renegotiate their leases.
Those trends led General Growth's larger rival, Simon Property
Group Inc., to bid for third-place Macerich Co., but it withdrew
that unsolicited $16.8 billion offer earlier this company when
Macerich refused to engage.
In all, General Growth reported a profit of $634.7 million, or
66 cents a share, compared with $128 million, or 13 cents a share,
a year earlier. Results in the latest quarter included a $591.2
million gain from changes in control of investment properties.
Funds from operations rose to 32 cents a share, from 31 cents a
share. General Growth had projected 31 cents to 33 cents a
share.
Revenue fell 4.6% to $594.1 million, while Wall Street analysts
expected $631 million.
The Chicago-based real-estate investment trust expects
second-quarter funds from operations of 31 cents to 33 cents.
Analysts polled by Thomson Reuters project 33 cents. For the year,
General Growth maintained its per-share FFO projection of $1.40 to
$1.46.
The company's shares were flat in after-hours trading at
$28.65.
Write to Josh Beckerman at josh.beckerman@wsj.com
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