General Growth Properties Inc. shares fell almost 50 percent Wednesday after the mall operator missed analysts’ third-quarter estimates. The company said it would seek loan extensions and strategic alternatives and continue efforts to raise capital.
The Chicago-based real estate investment trust said third-quarter funds from operations fell 11 percent to $185.4 million, or 58 cents a diluted share, compared with $208.4 million, or 70 cents a share, a year ago. REITs use funds from operations to define cash flow and measure performance. On average, analysts polled by Yahoo Finance estimated the firm would record funds from operations of 76 cents a share for the quarter.
Overall, the company posted a $15.4 million third-quarter loss, 64.7 percent greater than the $9.4 million loss it posted a year ago. Revenues fell 5.7 percent to $814.7 million from $864.3 million last year.
Shares of GGP closed down $2.24, or 49.9 percent, to $2.25. Its stock traded at a 52-week high of $51.57 last November.
The company, which is the nation’s second largest mall operator, has been plagued by solvency concerns and a reshuffling of its executive ranks in recent months. It owns, or has management responsibilities in, more than 200 regional malls accounting for about 200 million square feet of retail space.
“We realize we need to generate billions to deleverage the company,” Adam Metz, interim chief executive officer, said on a conference call with analysts Wednesday. “Sales transactions are an important part of our plan. Unfortunately, these transactions take time and until the deals are completed there is really nothing to announce. We hope to be able to report some transactions prior to yearend.”
Last month, the firm said it was putting its three Las Vegas properties on the market. It has $900 million in debt related to two of the properties maturing at the end of this month. Metz said General Growth would attempt to negotiate loan extensions where possible.
GGP named Metz interim ceo and Thomas Nolan Jr. interim president last month. Former ceo John Bucksbaum and former president Robert Michaels resigned after the company learned that Michaels and ousted chief financial officer Bernard Freibaum received unsecured loans from a Bucksbaum family trust that were used to cover margin calls on the purchase of company stock. Michaels gave up his seat on the company’s board, but retained the title of chief operating officer. Bucksbaum continues to serve as chairman of the board.
“Actions taken by the new management team to reduce capital spending over the next few years, while necessary, may not be enough,” Banc of America Securities analyst Christine McElroy wrote in a research note after the conference call.
The company said it is reducing its development spending on near- and intermediate-term projects. McElroy noted that the firm still expects to spend about $222 million in development costs in the fourth quarter.
General Growth lowered its core funds from operations estimate to between $2.85 and $2.95 a share, from earlier guidance of $3.42 because of lower mall and shopping center operation income, impairment charges and refinancing costs.
The company said it was considering a sale of core and noncore assets, sales of joint venture interests and capital
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)