Zacks_Analysts' Blog : General Growth Sells Non-Core Assets - Analyst Blog

General Growth Properties Inc. (GGP), a real estate investment trust (REIT) that owns shopping malls in the U.S., has sold three non-core assets in the past three months for total gross proceeds of $280 million. The asset sale was part of the long-term strategy of the company to divest low quality properties to focus on its regional mall portfolio, as well as increase its short-term liquidity.

General Growth sold Faneuil Hall Marketplace – a popular tourist attraction in Boston, for $140 million. The company also sold the office and garage components of Westlake Center, a shopping mall in Washington, for $119 million; and Riverside Plaza, a retail strip center in Provo, Utah, for $21 million. With these transactions, General Growth was able to de-lever its balance sheet by eliminating approximately $95 million of mortgage-related debt associated with these properties.

Earlier in April 2009, General Growth had voluntarily sought relief under Chapter 11 of the U.S. Bankruptcy Code to reduce and restructure its debts. During the bankruptcy proceedings, the company continued all its day-to-day operations in all the shopping centers and other properties, while exploring strategic alternatives for available sources of capital to emerge from bankruptcy as quickly as possible.

General Growth emerged from bankruptcy in November 2010. The company currently owns and manages a portfolio of 166 regional and super regional shopping malls in 43 states. The aggregate portfolio amounts to 169 million square feet of retail space.

The rating on General Growth is currently ‘Neutral’. The stock presently has a Zacks #3 Rank, which translates into a short-term ‘Hold’ recommendation and indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1–3 months. We also have a ‘Neutral’ recommendation and a Zacks #3 Rank for Macerich Co. (MAC), a competitor of General Growth.