Taubman Centers Inc. is pulling in more and higher-priced leases, but its third-quarter results were still mixed.
The mall operator said funds from operations totaled $47.4 million for quarter ended Sept. 30, equal to 77 cents per diluted share, compared to $57.6 million during the same period last year. Total net income fell as well, falling to $14.3 million from $35.2 million a year ago.
Robert Taubman, chairman, president and chief executive officer, said the results “were generally in line with out expectations” and touted leased space of 95.9 percent at the end of the quarter, a 1 percent bump over last quarter, and a 6.7 percent increase in portfolio net operating income.
“Higher rent per square foot and lower general and administrative expenses contributed to our results,” Taubman said.
The company noted that average rent per square foot was $60.61 during the quarter, up 0.6 percent from last year, but admitted it’s still in the process of back-filling space “created by the elevated level of tenant bankruptcies and store closures that occurred across the industry” over the last several months.
Hurricanes Harvey, Irma and Maria, which successively made landfall over the course of a few weeks, mainly affected Taubman’s Mall of San Juan in Puerto Rico, which is still struggling with widespread damage and power outages.
“Restoration efforts for the tenant spaces that were impacted are ongoing, and the company expects more retailers to reopen by the holiday season,” the company said. “Nordstrom and Saks Fifth Avenue sustained significant damage, and the timing of their reopenings is still uncertain. The company maintains substantial insurance to cover hurricane and flood damage, as well as business interruption, with a single deductible of $2 million.”
Even with higher rents and increased leasing, Taubman updated its guidance to a lower target for the full year. Earnings per diluted share are expected to come in between 80 cents to $1, compared to a previous range of $1.03 to $1.23. Funds from operations are also expected to equal $3.49 to $3.59 per diluted common share, revised from the previous range of $3.53 to $3.63.