CHICAGO—General Growth Properties just released its second quarter results and analysts seem pleased with the Chicago-based real estate investment trust's performance and its overall outlook.
“General Growth posted another solid quarter in 2Q14 as organic growth remains healthy,” according to an analysis just released by RBC Capital Markets. “Given the company's high quality regional mall portfolio, we look for organic growth to remain strong over the next several years. General Growth's new foray into very high end street retail is a positive for the company, in our view, and complements a deepening redevelopment pipeline.”
The trust reported that its funds from operations per share increased from $0.27 per diluted share in last year's second quarter to $0.31 this year. Company funds from operations increased 11.8% to $298 million from last year's second quarter. And its EBITDA increased to $507 million, up 5.0% from last year's second quarter.
Furthermore, net income for the trust, which has a portfolio of 120 regional malls with about 125-million-square-feet, went down somewhat compared to last year's second quarter, from $209 million to $174 million.
“Though tenant sales growth continues to slow, embedded loss to lease in the form of below market rents should provide the company with steady cash flow growth for at least the next three years,” according to RBC. “Any pick up in the consumer sales environment during that time would simply add longevity to the growth outlook.”
The analysts also say the GGP has upgraded its portfolio, largely eliminating slow growth properties and setting the stage for continued growth in rental rates and occupancy. And the trust also has a strong development and redevelopment pipeline containing about $2.2 billion of ongoing or proposed projects. “Since most of the projects are additions or other improvements to already productive assets, there appears to be little risk in these projects.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
