CHICAGO, March 23 /PRNewswire/ -- General Growth Properties, Inc.
(NYSE: GGP) today announced the acquisition of Willowbrook Mall in Houston,
Texas by GGP/Homart II L.L.C., its 50/50 Joint Venture with the New York State
Common Retirement Fund ("NYSCRF"). The seller is a pension account managed by
Lend Lease Real Estate Investments, Inc. The aggregate consideration paid was
approximately $144.9 million. In addition to a new fixed rate nonrecourse 10
year mortgage at 6.93% in the amount of $102 million, a short term variable
rate loan priced at LIBOR plus 75 basis points was used to fund the balance of
the purchase price. The property is expected to produce approximately
$12.9 million of net operating income during the next twelve months.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990208/CGM015 )
Willowbrook Mall was originally developed in 1981 and underwent extensive
remodeling in 1992. It is a one level mall that is comprised of approximately
1,530,000 square feet. The center is anchored by Dillard's, Foley's,
JCPenney, Lord & Taylor, and Sears. It is also currently anticipated that the
May Company will operate one of its divisions in an existing Montgomery Wards
store. The center has approximately 423,000 square feet of mall shop space,
is currently 92.5% occupied, and produces sales of approximately $430 per
square foot.
Late in the fourth quarter of 2000, GGP/Homart, Inc., another 50/50
venture with NYSCRF, increased its stake in two malls to 100%. It purchased
JCPenney Realty's 20% interest in Vista Ridge Mall located in Dallas, Texas
for approximately $10 million in cash and the assumption of an additional
$14 million of debt, thereby increasing its previous ownership from 80% to
100%. An existing variable rate loan on Vista Ridge Mall in the amount of
$69.3 million will be replaced in April with a new 10 year fixed rate
nonrecourse loan at 6.87% in the amount of $90 million.
GGP/Homart, Inc. also purchased from an institutional co-investor a 50%
preferred interest that it owned in Buckland Hills Mall, located in
Manchester, Connecticut, bringing ownership of that mall to 100% as well. The
total purchase price was approximately $102 million. The funds came primarily
from a new nonrecourse variable rate loan priced at LIBOR plus 94 basis points
in the amount of $96 million. The incremental $126 million that was invested
in both malls is expected to produce approximately $11.4 million of additional
net operating income in 2001.
GGP/Homart, Inc., a private real estate investment trust, was formed in
December of 1995 to purchase the retail real estate portfolio owned by Sears,
Roebuck & Co. The assets purchased included 100% interests in fifteen (15)
regional malls and fourteen (14) partial interests in both existing regional
malls and land joint ventures. One of the long-term asset management
objectives for the portfolio was to eliminate as many joint ventures as
possible by buying or selling interests. After these latest two purchases,
GGP/Homart, Inc. has now sold three (3) joint venture interests and purchased
six (6) joint venture interests, leaving four (4) mall joint ventures and one
(1) land joint venture, which is currently marketing its land for sale.
"We are very pleased to buy Willowbrook Mall, as it will strengthen our
existing portfolio of five (5) owned and/or managed malls in Houston, Texas,
and will further expand our co-investments with New York State Common
Retirement Fund," said John Bucksbaum, CEO of General Growth Properties. "An
incremental $271 million of capital has been invested by GGP/Homart, Inc. and
GGP/Homart II L.L.C. in very strong properties and it was funded entirely by
low cost non-recourse debt. However, even after taking the new debt into
account, our overall EBITDA to interest coverage ratio still remains above 2.0
times. This purchase of Willowbrook and the additional investments to obtain
total control of both Buckland Hills and Vista Ridge should enhance our funds
from operations for many years to come."
General Growth Properties, Inc. is one of the oldest and most experienced
shopping center owners, developers, and managers in the United States. The
company currently has ownership interests in, or management responsibilities
for, 147 malls in 39 states, encompassing approximately 128 million square
feet. For more information, visit the General Growth Properties website at
http://www.generalgrowth.com .
This release may contain forward-looking statements that involve risks and
uncertainties. Actual future performance, outcomes and results may differ
materially from those expressed in forward-looking statements as a result of a
number of risks, uncertainties and assumptions. Representative examples of
these factors include (without limitation) general industry and economic
conditions, interest rate trends, cost of capital and capital requirements,
availability of real estate properties, competition from other companies and
venues for the sale/distribution of goods and services, shifts in customer
demands, tenant bankruptcies, changes in operating expenses, including
employee wages, benefits and training, governmental and public policy changes
and the continued availability of financing in the amounts and the terms
necessary to support future business. Readers are referred to the documents
filed by General Growth Properties, Inc. with the SEC, specifically the most
recent reports on Forms 10-K and 10-Q, which identify important risk factors
which could cause actual results to differ from those contained in the
forward-looking statements.
SOURCE General Growth Properties, Inc.
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Related links:
http://www.generalgrowth.com
Photo Notes:
NewsCom:
http://www.newscom.com/cgi-bin/prnh/19990208/CGM015
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, 888-776-6555 or 201-369-3467
Company News On-Call:
http://www.prnewswire.com/comp/110740.html or fax,
800-758-5804, ext. 110740
CONTACT:
John Bucksbaum, 312-960-5005, or Bernard
Freibaum, 312-960-5252, both for General Growth Properties, Inc.
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