General Growth Properties

General Growth rejects Simon’s $10B offer

General Growth Properties Inc., owner of Honolulu’s Ala Moana Center, has rejected a $10 billion offer to sell to rival Simon Property Group.

But the nation’s second-largest mall owner did not reject outright Simon’s overtures and indicated it would consider being acquired as part of its efforts to emerge from Chapter 11 bankruptcy protection. Indianapolis-based Simon is the nation’s largest mall owner.

General Growth CEO Adam Metz, in a letter to rival Simon CEO David Simon, said the company remains committed to restructuring its debt but will not allow Simon to derail that process.

Metz said Simon’s offer “is not sufficient to preempt the process we are undertaking to explore all avenues to emerge from Chapter 11 and maximize value for all the company’s stakeholders.”

Chicago-based General Growth made the letter public in a press release issued Tuesday evening in response to Simon’s decision to publicize its acquisition offer. General Growth filed for bankruptcy protection in April 2009.

Simon, which owns the Waikele Premium Outlets on Oahu, said Tuesday it has offered to acquire General Growth for $10 billion, including $9 billion in cash. The offer would give General Growth creditors $7 billion in consideration.

Shareholders would get more than $9 a share, including $6 a share in cash.

General Growth owns or manages more than 200 regional shopping malls in 43 states, including Ala Moana Center, Ward Centre, Ward Entertainment Center and Ward Gateway Village in Honolulu and Prince Kuhio Plaza in Hilo. The company also manages Windward Mall on Oahu; King’s Shops at Waikoloa Beach Resort and Queens’ Marketplace on the Big Island; and Whaler’s Village and Queen Kaahumanu Center on Maui.

Source: PBN

General Growth Properties

Simon looking at General Growth assets

Simon Property Group Inc. has hired outside advisers to help it weigh its options regarding the possible acquisition of assets from fellow shopping mall owner General Growth Properties.

Chicago-based General Growth, operating under bankruptcy protection since April, owns or holds a stake in about 200 malls across the country. In addition to owning and managing the Ala Moana Center and the Ward Centers in Honolulu, General Growth also manages Windward Mall and Kapolei Commons on Oahu; King’s Shops at Waikoloa Beach Resort and Queens’ Marketplace on the Big Island; and Whaler’s Village and Queen Kaahumanu Center on Maui.

Indianapolis-based Simon Property owns nearly 400 properties, including Waikele Premium Outlets.

General Growth filed for bankruptcy protection under the weight of debt it was unable to refinance when the credit markets froze. Its financial problems stem, in part, from a local deal, when it financed its $11 billion acquisition of Columbia-based Rouse Co. largely with debt.

Simon Property spokesman Les Morris confirms the company has hired Lazard Ltd. and Wachtell, Lipton, Rosen & Katz as advisors on a possible General Growth acquisition.

General Growth reported a $117.8 million third quarter loss. Simon Property (NYSE: SPG) had third quarter net income of $105.5 million.

Simon Property and Farallon Capital Management acquired Chevy Chase-based The Mills Corp. in 2007 for $1.6 billion.

Source: PBN

General Growth Properties

State approves Kakaako plan

The Hawaii Community Development Authority gave the developer clearance yesterday to proceed with its master plan for 29 acres, officially called “Kaiaulu ‘O Kakaako.”

Kamehameha will begin seeking bids to build a work-force, or affordable, housing project at the corner of Halekauwila and South streets, the site of a parking lot, to satisfy state requirements.

“We’re very pleased,” said Kamehameha spokeswoman Ann Botticelli. “We’re pleased at the amount of support we’ve seen from our neighbors, members of the community and the Hawaiian community. We’re pleased they like the vision as much as we do.”

Kamehameha is very close to signing Safeway for the school’s former CompUSA space along Ala Moana, Botticelli said.

Besides a 25,000-square-foot plaza along Auahi Street, Kamehameha plans to add up to 2,750 more residences in high-rises, townhomes and lofts.

At the center of it all, Kamehameha is also planning a 400,000-square-foot Asia Pacific Research Center to house biotech companies and labs next to the medical school.

Kamehameha will issue a request for proposals from developers for a residential tower at the corner of Halekauwila and South streets geared toward work-force housing.

Developers are required by the state to set aside at least 20 percent of projects for so-called reserved housing, but Kamehameha also offered to set aside an additional one-tenth of that percentage for lower-income residents. Kamehameha Schools has won state approval of its master plan for Kakaako, a major step toward making its 15-year vision of transforming the neighborhood into reality.

HCDA’s 10 present board members voted unanimously yesterday to approve the master plan, following a morning of positive testimony from members of the community, including architects, scientists and the cultural descendants of iwi potentially found within the 29 acres.

Anthony Ching, HCDA’s executive director, said there was, by and large, supportive testimony throughout the public comment period that extended from March to June.

A few members of the Community Planning Advisory Council did, however, submit written testimony opposing the project.

Bob Loy from Outdoor Circle said he opposed the project because it proposes high-rises along Ala Moana, which are counter to CPAC’s guiding principles of preserving open view planes.

“Buildings built up to 400 feet high along Ala Moana will significantly block the present Mauka-Makai view plane — regardless of their physical orientation,” said Loy.

Also, the city’s primary urban development plan discourages a high-rise “picket fence” between downtown and Waikiki.

Friends of Kewalo Basin, which protested the Alexander & Baldwin project a few years ago, also opposed the plan.

Paulette Kaleikini, a native Hawaiian descendant of burials in Kakaako, lauded Kamehameha for speaking with her well in advance of the project.

She said Kamehameha took a pro-active approach in speaking with burial descendants, and in agreeing to an archaeological inventory survey, well before starting construction.

Kamehameha will need to consult continually with the state Historic Preservation Division and Oahu Island Burial Council while implementing its master plan.

HCDA, in January, also approved a master plan by General Growth Properties proposing up to 4,000 more residences including mid- and high-rises on 60 acres in Kakaako over 15 years.

Before starting construction, Kamehameha still will need to apply for a city building permit, as well as a development permit from HCDA, according to Ching.

Source: SB

General Growth Properties

General Growth Properties hammered by rising vacancies

General Growth Properties posted a 2.1 percent drop in earnings, dragged down by the retail slump, rising vacancies and costs tied to its Chapter 11 reorganization efforts.

In its second-quarter earnings release, the Chicago-based real estate investment trust (Pink Sheets: GGWPQ) posted operating income of $615.8 million, down from $629.1 million last year.

Its funds from operations fell 74 percent to $58.1 million, or 18 cents per share, down from $221.6 million, or 69 cents per share. Funds from operations, which show how much money investment trusts generate from their properties, is the standard performance measure for real estate investment trusts.

The debt-laden mall owner attributed much of that decline to the sagging retail industry and its reorganization efforts. The company posted a $13.3 million drop in net operating income due to rising vacancy rates, $33.7 million in reorganization costs, and $27.9 million in additional restructuring costs including general and administrative expenses.

General Growth filed for Chapter 11 bankruptcy protection April 16. The company owns or manages about 200 malls in 44 states, some master-planned community developments and commercial office buildings. In addition to owning and managing the Ala Moana Center and the Ward Centers in Honolulu, General Growth also manages Windward Mall and Kapolei Commons on Oahu; King’s Shops at Waikoloa Beach Resort and Queens’ Marketplace on the Big Island; and Whaler’s Village and Queen Kaahumanu Center on Maui.

Source: PBN

General Growth Properties

General Growth Properties struggling to avoid bankruptcy

General Growth Properties Inc. said its Rouse Co. LP subsidiary has extended a deadline that could allow it to skip payments on more than $2 billion of debt.

General Growth Properties (NYSE: GGP) is the second-largest U.S. shopping mall owner. The Chicago-based company, which owns or operates more than 200 U.S. malls, is struggling with $1.18 billion of past-due debt.

In Hawaii, General Growth manages Ala Moana Center and Ward Centers.

The Rouse Co. has extended the expiration date for its previously announced consent solicitation to 5 p.m. on March 27.

General Growth lost a Louisiana shopping mall to foreclosure by Citigroup Inc. (NYSE: C) and two other investors on March 20.

The Wall Street Journal reports General Growth missed a payment on $395 million in bonds last week. The report says General Growth is planning to stop paying interest and principal on existing bonds and asking holders to accept a fee in return for not demanding payment this year.

Source: PBN

General Growth Properties

General Growth reports $1.2B in overdue debt

General Growth Properties Inc., the owner of major retail destinations in Hawaii and the nation, had a grim showing last year.

The Chicago-based owner and manager of more than 200 malls and other developments reported about $1.18 billion in past-due debt and about $4.09 billion of debt that could be accelerated. Its lenders, however, haven’t taken action yet on that debt.

General Growth owns Ala Moana Center and Ward Centers in Honolulu.

General Growth (NYSE: GGP) also has $1.44 billion of consolidated mortgage debt and about $595 million of unsecured bonds that will mature this year that it needs to repay, refinance or extend. But “the refinancing market remains at a standstill,” the company noted in a news release.

General Growth said it is “considering all strategic alternatives” and is still talking with its lenders.

“In the event that we are unable to extend or refinance our near and intermediate term loan maturities, we may be required to seek legal protection from our creditors,” General Growth said.

The company is trying to cut costs. It has “suspended our cash dividend, halted or slowed nearly all of our development and redevelopment projects, systematically engaged in certain cost reduction or efficiency programs, reduced our workforce by over 20 percent and sold certain non-mall assets,” the release said.

As for results from retail operations, General Growth reported:

* Comparable tenant sales decreased 3.8 percent in 2008 compared to the previous year.
* Sales per square foot decreased 4.2 percent compared to 2007.
* Occupancy decreased to 92.5 percent as of Dec. 31, 2008, compared to 93.8 percent a year earlier.

General Growth’s funds from operations were $222.2 million in the fourth quarter of 2008, compared to $190.4 million in the same period a year earlier, an increase of approximately $31.8 million.

The results don’t look as good excluding funds from real estate, income from the master planned communities and benefit from income taxes. With those excluded, General Growth posted $231 million for the quarter, down from $271.2 million. Cost reductions in marketing, supplies, personnel and the like did not offset its decline in revenue, the company said.

Source: PBN

General Growth Properties

New stores open, changes under way at Ward Centers

Sports Authority is expanding its Ward Avenue store, while Pictures Plus and Marukai 99 Store will move into new spaces at other Ward properties.

The moves are among a number of changes at the Ward Centers that include new eateries and retail stores opening this year, Ward Centers said Thursday in a news release.

In4m Boardshop opened last month at Ward Warehouse selling skateboard gear and apparel, while the popular surf and skate brand Hurley opened its first Oahu retail store earlier this month at Ward Entertainment Center.

Brian’s Hawaiian Kitchen also opened this month at Ward Warehouse near the amphitheater stage, and Expressions Portrait Studio opened at Ward Warehouse on the second floor.

New eateries opening later this spring and summer include Taco del Mar, which will open in July next to Crazy Shirts at the Ward Centre street-front shops, and Blazin Steaks, which will open in the spring at Ward Warehouse next to Dairy Queen and Orange Julius.

The Ward Centre women’s boutique Misfortune, which recently closed, also plans to reopen later this month under new ownership.

Meanwhile, Sports Authority will move into the Pictures Plus and Marukai spaces this spring, adding 17,000 square feet of space to the existing store in the Ward Gateway Center. Pictures Plus will move to a space in Ward Warehouse and the Marukai 99 Store will move to the Ward Farmers Market this spring.

Ward Centers is owned by General Growth Properties, which also owns Hawaii’s largest shopping mall, the Ala Moana Center.

Source: PBN

General Growth Properties

General Growth gets another loan extension

General Growth Properties, a Chicago-based real estate trust that owns Ala Moana Center and Ward Centers, has received an extension on some of its debt through March 15.

The company (NYSE: GGP) made the debt agreements with its lender syndicates for both the 2006 senior credit agreement and its secured portfolio facility, whose forbearance agreements expired Monday.

It agreed to certain additional restrictions and covenants, which the company did not identify, while the lenders agreed that other company defaults would not cause a termination of the new forbearance agreements before their expiration.

In mid-November, General Growth warned that it might seek bankruptcy protection if it couldn’t restructure of refinance its heavy debt load.

On Dec. 10, Fitch Ratings downgraded the company and warned that a default on nearly $900 million in debt was likely. Two days later, General Growth said it had borrowed $896 million, which it used to retire a $58 million bond issued by the Rouse Co., as well as refinance $814 million of mortgage indebtedness that was originally scheduled to mature in 2009. The new mortgages mature in 2013 and 2015.

The new agreements give General Growth a bit of breathing room to reschedule or refinance its heavy debt load. The company owns or manages about 200 malls in 44 states.

Source: PBN