CHICAGO, Dec. 4 /PRNewswire-FirstCall/ -- General Growth Properties, Inc.
(NYSE: GGP) today announced the acquisition of Southland Mall in Hayward,
California and the closing of the previously announced acquisition of Glendale
Galleria in Los Angeles.
General Growth purchased 100% of Southland Mall from an institutional
joint venture. The aggregate consideration paid was approximately $89 million.
The purchase was financed with approximately $24 million of cash which the
company had on hand and a new 5-year $65 million mortgage loan that bears
interest at LIBOR plus 75 basis points. The property is expected to produce
approximately $9 million of net operating income in calendar year 2003.
Southland was originally developed in 1964, expanded in 1973, and
extensively renovated in 1984. The center, with over 1.3 million total square
feet, is the second largest enclosed regional mall in the San Francisco East
Bay area. Anchor tenants include Macy's, Sears, JCPenney, and Mervyn's. The
mall has 412,000 square feet of mall shop space, is currently approximately
87% occupied, and produces sales of approximately $335 per square foot. Prior
to the acquisition, General Growth managed Southland through its third party
management subsidiary.
General Growth closed the acquisition of Glendale Galleria on November 27,
2002. The mall was purchased for $415 million and is owned by GGP/Homart II
L.L.C., the company's 50/50 joint venture with the New York State Common
Retirement Fund. In exchange for a portion of its 50% interest in Glendale
Galleria, General Growth issued approximately $41.1 million of convertible
preferred operating partnership units. The units pay a 7% annual dividend and
are convertible into approximately 667,000 General Growth common operating
partnership units, based upon a conversion price of $61.6575 per unit. The
conversion price represents a 25% premium above the average price of General
Growth Properties, Inc. common stock during the ten days prior to closing.
"Southland Mall and the Glendale Galleria are outstanding additions and
will complement our already strong portfolio in the region," said John
Bucksbaum, Chief Executive Officer of General Growth. "We are bullish on the
California market and these properties provide an opportunity to create value
and enhance our presence in growth areas."
General Growth Properties is the country's second largest shopping center
owner, developer and manager of regional shopping malls. General Growth
currently has ownership interests in, or management responsibility for, a
portfolio of 169 regional shopping malls in 41 states. The company portfolio
totals approximately 145 million square feet of retail space and includes over
15,000 retailers nationwide. A publicly traded Real Estate Investment Trust
(REIT), General Growth Properties is listed on the New York Stock Exchange
under the symbol GGP. For more information on General Growth Properties and
its portfolio of malls, please visit the company web site at
http://www.generalgrowth.com .
This release may contain forward-looking statements that involve risks and
uncertainties. All statements other than statements of historical fact are
statements that may be deemed forward-looking statements, which are subject to
a number of risks, uncertainties and assumptions. Representative examples of
these risks, uncertainties and assumptions 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, changes in retail rental rates in the company's markets, shifts
in customer demands, tenant bankruptcies or store closures, changes in vacancy
rates at the company's properties, changes in operating expenses, including
employee wages, benefits and training, governmental and public policy changes,
changes in applicable laws, rules and regulations (including changes in tax
laws), the ability to obtain suitable equity and/or debt financing, and the
continued availability of financing in the amounts and on the terms necessary
to support the company's future business. Readers are referred to the
documents filed 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
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PR Newswire Photo Desk, +1-888-776-6555 or +1-212-782-2840
Company News On-Call:
http://www.prnewswire.com/gh/cnoc/comp/110740.html
CONTACT:
Bernard Freibaum, +1-312-960-5252, John
Bucksbaum, +1-312-960-5005, or Beth Coronelli, +1-312-960-2750,
all of General Growth Properties
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