General Growth stock rises as quarterly cash flow improves
General Growth Properties Inc. gained in New York trading after the U.S. Mall owner, which is working to emerge from bankruptcy, said it reduced writedowns. The shares rose as much as 7.5 percent.
Core funds from operations, a measure of cash flow used by real estate investment trusts, climbed to $254.1 million, or 78 cents a share, compared with negative FFO of $122.9 million, or 38 cents, a year earlier, Chicago-based General Growth said today in a statement.
"We are seeing signs of recovery and growth in a number of our markets," Chief Executive Officer Adam Metz said in the statement. "Even previously hard-hit markets like Florida are showing positive trends."
General Growth filed the biggest U.S. real estate bankruptcy in April 2009 ago after amassing $27 billion in debt making acquisitions. The company has been at the center of a takeover battle between rival Simon Property Group Inc. and a group led by Brookfield Asset Management Inc. since February. Simon withdrew its offer May 7, the same day a bankruptcy court approved Brookfield as the first bidder in an auction for General Growth.
General Growth's Chapter 11 filing involved about half the company's 200 malls, including Lincolnshire Commons in Lincolnshire and Spring Hill Mall in West Dundee.
Not part of the filing were other General Growth-owned malls in the Chicago area -- Northbrook Court in Northbrook, Oakbrook Center in Oak Brook, Golf Mill Shopping Center in Niles and Water Tower Place in Chicago.
The shares climbed 67 cents, or 4.7 percent, to $14.74 in New York Stock Exchange composite trading at 10:22 a.m.
FFO excludes interest, depreciation and other items and doesn't conform to generally accepted accounting principles. General Growth's core FFO excludes results from its master- planned communities and income taxes.
The company's revenue declined to $761 million from $789 million a year earlier. Much of the drop came from malls where sales are below $350 per square foot, Metz said.
It will take three or four more quarters for newly signed leases to be reflected in the operating results, Metz said.
General Growth's properties include New York's South Street Seaport, Boston's Faneuil Hall and the Grand Canal Shoppes and Fashion Show in Las Vegas.