General Growth PropertiesNYSE
Yesterday, 10:42 AM
- The 10-year Treasury yield is making new bear-cycle highs today, up another seven basis points to 1.86% - its perkiest level since May. The move up in yields is global, with U.K. 10-years up 11 bps and Germany's up 8.5 bps.
- Earlier today, the U.K. reported Q3 GDP growth of 0.5% - far better than what had been predicted post-Brexit.
- Facing at least a little more competition in the yield department, equity REITs have turned sharply lower, with VNQ down 2.1%, and IYR off 1.8%. Mortgage REITs (REM -0.6%) are faring a little better as solid Q3 earnings begin to roll in.
- The major U.S. averages have given up early gains and turned red, led by the S&P 500 and Nasdaq, both off 0.25%.
- Individual equity REITs: Verreit (VER -2.2%), Welltower (HCN -2.4%), Equity Residential (EQR -1.6%), Omega Healthcare (OHI -3.2%), Simon Property (SPG -3.2%), General Growth (GGP -2.6%), Public Storage (PSA -2.9%), Gramercy Property (GPT -1.9%), Washington Real Estate (WRE -1.2%), Hersha (HT -2.9%), Sunstone Hotel (SHO -1.4%), Stag Industrial (STAG -2%)
- Mortgage REITs: AGNC Investment (AGNC -1.5%), Annaly (NLY -0.7%), Two Harbors (TWO -0.4%), Capstead (CMO +0.3%)
- ETFs: VNQ, IYR, MORL, REM, MORT, DRN, RQI, URE, SCHH, ICF, RWR, SRS, RNP, RFI, JRS, KBWY, NRO, DRV, RIT, RIF, REK, DRA, FRI, FTY, FREL, LRET, PSR, WREI, XLRE, IARAX, RORE
Fri, Sep. 16, 8:33 AM
- The partnership of Authentic Brands Group, General Growth Properties (NYSE:GGP), and Simon Property Group (NYSE:SPG) finalized their acquisition of Aeropostale (NYSE:AEO) in a deal that will keep the brand alive.
- The Aeropostale chain will still have a major presence at malls with over 400 stores in the U.S. and Canada and another 300 global outlets.
- "Aeropostale has significant brand equity and the go-forward portfolio of stores generates more than $1 billion in global retail sales, over $800 million of which is from the U.S.," notes GGP CEO Sandeep Mathrani.
Fri, Sep. 2, 11:12 AM
- A consortium including mall operators Simon Property Group (SPG +0.3%) and General Growth Properties (GGP +0.7%) as well as licensing firm Authentic Brands and liquidators has prevailed in the bankruptcy auction for Aeropostale (NYSE:ARO).
- The group bid $243.3M in a deal that could save 229 of the retailer's stores -- though in any case a surviving Aeropostale will continue with far fewer than the 800 pre-bankruptcy stores it operated.
- The consortium would also get the e-commerce business and international licensing. The deal is set for approval by a bankruptcy judge on Sept. 12.
- The transaction also ends a dispute between the retailer and lender Sycamore Partners, accused to planning a "loan-to-own" scheme to force bankruptcy on the chain.
Thu, Aug. 11, 9:45 AM
- Macy's is higher by 16% after reporting its Q2 and announcing the closing of 100 full-line stores (out of 675 total).
- The news is sending a shudder through the owners of malls: Simon Property (SPG -1.6%), General Growth (GGP -2.1%), Brixmor (BRX -2.1%), Weingarten Realty (WRI -0.8%), Macerich (MAC -0.7%), Taubman Centers (TCO -0.8%), PREIT (PEI -1.3%).
Tue, Aug. 2, 10:47 AM
- GGP tried to ease the sting of the miss and slight guidance cut with an increase in the quarterly dividend to $0.19 per share, but shares are down 1.95% in morning action.
- Q2 FFO of $340M or $0.35 per share compared to $319M and $0.33 one year ago. Expectations were for $0.36.
- Same-store NOI up 4% Y/Y; EBITDA growth of 6.5%.
- Initial rental rates LTM up 13.7% vs. those for expiring leases. Tenant sales up 2.8%.
- Q3 FFO per share is guided to $0.34-$0.36; full-year to $1.51-$1.55.
Mon, Aug. 1, 5:22 PM
Mon, Aug. 1, 4:05 PM
Sun, Jul. 31, 5:35 PM
- ADUS, AEGN, AEIS, AMKR, APU, ARE, ATW, BDE, BLKB, CEMP, CGNX, CHGG, CKEC, CONE, CUTR, DAC, DNB, ENH, ENSG, EXAC, FTR, GGP, GKOS, GPRE, HTA, IDTI, ININ, IPHS, KMT, LNT, MCEP, MTGE, NGHC, NLS, OFIX, OGS, OLN, PLOW, PPS, PQ, QUAD, RAIL, RXN, RYAM, SBRA, SYKE, TEX, THC, TNET, TREX, TSE, TTOO, TXRH, UGI, VECO, VNO, WMB, WSTC, XOXO
Wed, Jun. 29, 1:33 PM
- Valuation remains attractive, says analyst Michael Bilerman, noting the stock price is at a 16% discount to NAV and implies a 5.2% cap rate.
- Bilerman reiterates his Buy rating and $34 price target (vs. current $29.78) following meetings with General Growth Properties (GGP +1.4%) management, at which the company showed a willingness to take back department store boxes amid the group's secular decline. Demand is strong among restaurants, fast fashion, cosmetics, and home furnishing.
- "GGP management remains focused on reducing the risk profile of the company in anticipation of a tougher road ahead – including approach to asset sales, balance sheet, and re/development – but with a pipeline of opportunities to continue to grow EBITDA 4-5% annually."
Fri, Jun. 24, 10:30 AM
- A sharp drop in long-term rates and vanquished expectations for even one rate hike this year has income players bidding up the prices of utility stocks (XLU +0.7%) and certain REITs even as the major average fall more than 2% post-Brexit.
- A check of Fed Funds futures finds traders not fully pricing in a 25 basis point rate hike until 2018!
- The mortgage REIT sector (REM +0.5%) welcomes the news, with players like Annaly (NLY +1.7%), American Capital Agency (AGNC +1.1%), Two Harbors (TWO +1.7%), and Chimera (CIM +1.3%) leading the way. Western Asset Mortgage (WMC -0.8%) is a laggard after slashing its dividend by more than 30% last night.
- Equity REITs are decidedly mixed. Retail names like Realty Income (O +2.4%), National Retail (NNN +2%), and Vereit (VER +0.9%) are higher, as are healthcare players like HCP (HCP +1.2%) and Medical Properties Trust (MPW +0.1). Apartment REITs are mostly lower, as are mall operators like Simon Property (SPG -0.8%) and General Growth (GGP -0.7%).
- The dollar is surging post-Brexit, however, and that's taking a chunk out of the hotel REITs: Hospitality Properties (HPT -1.5%), Sunstone Hotel (SHO -2.7%), LaSalle (LHO -3.8%), Pebblebrook (PEB -2.4%), RLJ Lodging (RLJ -2.5%).
- ETFs: XLU, UTG, IDU, VPU, GUT, BUI, FUTY, RYU, UPW, FXU, PUI, SDP, PSCU, FUGAX, UTLF, JHMU, VNQ, IYR, DRN, RQI, URE, SCHH, ICF, RWR, SRS, RNP, RFI
Thu, Jun. 16, 7:56 AM
- General Growth Properties (NYSE:GGP) chose not to make the payment after a $144M loan on suburban Detroit's Lakeside Mall came due this month, and it could be a sign of trouble as $47.5B of shopping-center backed loans are set to mature in the next 18 months, according to BAML.
- WP Glimcher (NYSE:WPG) plans to turn over five of its malls to lenders - four of which have mortgages coming due in the next year - according to a recent company presentation.
- Negotiating loan extensions or refinancing notes could be difficult as lenders mull the future of shopping centers amid lame earnings from still-standing retailers like Macy's and Nordstrom, and bankruptcy filings from the likes of Aeropostale and Sports Authority.
- Green Street Advisors estimates several hundred malls could shut down in the next decade, with those reliant on Macy's, J.C. Penney, and Sears most at risk.
Tue, Jun. 14, 9:33 AM
- The dive in the stock price of WP Glimcher (NYSE:WPG) yesterday after it announced it was not in sale talks with Kite Realty (NYSE:KRG) - not to mention the big jump in KRG's price - was telling, writes Shelly Banjo. For one, it shows investors have little faith WPG can turn around its portfolio of nearly 120 strip malls, and second it suggests the deal wouldn't have been a good investment for Kite.
- Over the past year, shares of WPG are lower by 20% vs. a 14% rise for the broader mall REIT sector. WPG now trades at just 6.4x expected FFO vs. an average 16.6x for retail REITs.
- While it's popular to say malls are dying, says Banjo, the reality is one of a bifurcated market - with those exposed to high-end neighborhoods and luxury retailers doing well. Those in poorer neighborhoods exposed to struggling department stores and regional retailers are doing most of the dying.
- Along with WP Glimcher, CBL & Associates (NYSE:CBL), and Wheeler Real Estate (NASDAQ:WHLR) are the worst three performers in Bloomberg's retail REIT index since January 2015.
- Might other suitors await? High-end shops like Simon Property (NYSE:SPG), Taubman (NYSE:TCO), or General Growth (NYSE:GGP) are likely not interested in WPG's assets, and while Brookfield's purchase of Rouse Properties shows some interest in lower-end real estate, Brookfield already owned one-third of Rouse, and Rouse's portfolio was a small one with just three dozen properties.
Thu, Jun. 9, 11:52 AM
- The team hosted meetings with 29 companies over two days across six subsectors. Some highlights:
- Lodging: Business travel remains soft and most are operating defensively by grouping up and reducing leverage. NYC is flooded with hotels available for sale which should pressure pricing.
- Apartments: The slowdown in NoCal is concentrated in Soma and San Jose, but expected to be temporary. The NYC slowdown is expected to endure through 2017. Merchant builders in Houston with deliveries in 2017 are in trouble - an opportunity for Camden Property Trust (NYSE:CPT) to pick up assets on the cheap.
- Malls: Concerns over department stores are overblown. Simon Property (NYSE:SPG) expects spreads to top mid-teens in the next five years. Omni-channel retail strategy is growing increasingly important as the WSJ reports 80% of online sales touch brick and mortar in some way.
- CS's Ian Weissman is ranked #1,134 out of #3,990 analysts on TipRanks.com.
- Tickers of interest: HPT, SHO, LHO, PEB, CHSP, INN, RLJ, EQR, AVB, ESS, PPS, UDR, AIV, GGP, BRX, KIM, WRI, MAC
Sat, May 28, 8:30 AM
- The real estate industry is going to have a sector class of its own in the major market indexes at the end of the summer, in what will be the biggest change to S&P's and MSCI's sector classification system since it was established in 1999.
- Underweighting REITs hasn't been a good idea: Since Kimco launched the modern REIT era with its 1991 IPO, REITs have returned 11.2% annually, outperforming the S&P 500 by more than 200 basis points.
- Green Street Advisors' "portfolio of buys" has four names, all of which will be in the new index: Apartment player Equity Residential (NYSE:EQR), high-end mall operator General Growth Properties (NYSE:GGP), strip-mall owner Federal Realty Investment Trust (NYSE:FRT), and the largest self-storage operator, Public Storage (NYSE:PSA).
- Gerstein Fischer is a fan of another apartment owner, AvalonBay (NYSE:AVB).
- Previously: Goldman: Index change to spur $19B of REIT buying (May 24)
Wed, May 18, 10:42 AM
- Target is the latest major retailer to report a disappointing Q1 and issue weak forward guidance. It's lower by 9% today.
- Those REITs which may rent to the likes of Target or Wal-Mart or Macy's or Nordstrom ... may be starting to sense a trend.
- Simon Property (SPG -1.1%), General Growth (GGP -1.5%), Kimco (KIM -1.6%), PREIT (PEI -1.8%), DDR (DDR -1.7%), CBL (CBL -3.1%), Federal Realty (FRT -1.2%).
- IYR -0.95%
Tue, May 17, 11:02 AM
- Following up on yesterday's story about the divergence between the stock prices of major retailers (down) and those of their landlords (up), Bloomberg's Rani Molla and Shelly Banjo break down the numbers further.
- They find those REITs with a large portion of portfolios concentrated in malls are down 10% Y/Y vs. all REITs, which are higher by 6%. Going further, they find those REITs with exposure to higher-end malls and outlet centers - Simon Property Group (NYSE:SPG) and Tanger Factory (NYSEMKT:SKY) come to mind – have been spared, while those owning older malls have taken the hit. CBL & Associates (NYSE:CBL) and WP Glimcher (NYSE:WPG) are down 40% and 30% this year, respectively.
- It's easy to pick on mall owners, but a broad slowdown at brick-and-mortar stores is ultimately a threat to all retail landlords, as traffic across all types of retail real estate in the U.S. and Canada has fallen as much as 18% Y/Y.
- On the good side is low supply as developers have stopped building, but even that's begun to run its course, they write.
- REITs of interest: O, NNN, GGP, KIM, WRI, MAC, TCO, PEI, SKT, TCO, ROIC, RPAI, IRC, FRT, DDR, WHLR, EQY, KRG, REG