General Growth Sells Non-Core Assets - Analyst Blog
October 17 2011 - 8:15AM
Zacks
General Growth Properties
Inc. (GGP), a real estate investment trust (REIT) that
owns shopping malls in the U.S., has sold three non-core assets in
the past three months for total gross proceeds of $280 million. The
asset sale was part of the long-term strategy of the company to
divest low quality properties to focus on its regional mall
portfolio, as well as increase its short-term liquidity.
General Growth sold Faneuil Hall
Marketplace – a popular tourist attraction in Boston, for $140
million. The company also sold the office and garage components of
Westlake Center, a shopping mall in Washington, for $119 million;
and Riverside Plaza, a retail strip center in Provo, Utah, for $21
million. With these transactions, General Growth was able to
de-lever its balance sheet by eliminating approximately $95 million
of mortgage-related debt associated with these properties.
Earlier in April 2009, General
Growth had voluntarily sought relief under Chapter 11 of the U.S.
Bankruptcy Code to reduce and restructure its debts. During the
bankruptcy proceedings, the company continued all its day-to-day
operations in all the shopping centers and other properties, while
exploring strategic alternatives for available sources of capital
to emerge from bankruptcy as quickly as possible.
General Growth emerged from
bankruptcy in November 2010. The company currently owns and manages
a portfolio of 166 regional and super regional shopping malls in 43
states. The aggregate portfolio amounts to 169 million square feet
of retail space.
The rating on General Growth is
currently ‘Neutral’. The stock presently has a Zacks #3 Rank, which
translates into a short-term ‘Hold’ recommendation and indicates
that the stock is expected to perform in line with the overall U.S.
equity market for the next 1–3 months. We also have a ‘Neutral’
recommendation and a Zacks #3 Rank for Macerich
Co. (MAC), a competitor of General Growth.
GENL GRWTH PPTY (GGP): Free Stock Analysis Report
MACERICH CO (MAC): Free Stock Analysis Report
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