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Reggie is correct. Padding your FFO with Lease Termination Income is a shady trick...I'm surprised more analyst didn't ding them for that after they released their numbers. I don't these the analysts covering GGP know anything about mall portfolios. That Lease Termination Income overstates FFO by about $15 million.
May 08 15:48 pm
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All Comments by User 190797 »A Deeper Look Into GGP's Q1 [View article]
Additionall, the $2.8 billion of debt they need to refi is going to reduce FFO by another $50-$60 million. Right now GGP pays about 4.7% interest on their total outstanding debt. This is definitely "interest only" for the most part and will be refinanced under amortizing structures at significantly higher rates.
All told, GGP with about $60-$75 million behind the eight ball on near-term FFO. They'll never hit their 2008 estimates and will probably be struggling to break $0.50 through 2009.
I refinance malls for a living. No one seems to understand how difficult this credit market really is. (and sales for discretionary retailers, like the ones that occupy malls, are dropping fast).