General Growth Properties Inc
Personal consumption jumps in August: We are spending money again!
Personal income is the income a person receives from all sources. This includes wages and salaries, government transfer payments, other labor income, proprietor’s income, and rental income.
Mortgage Applications Rose, Volatility Continued in January
According to the MBA (Mortgage Bankers Association) survey, mortgage applications rose by 8.8% for the week ending January 22.
Why pay attention to last week’s extremely important releases?
Last week had some extremely important economic data, with the ISM report, construction spending, GDP, and the jobs report. The advance estimate of first quarter GDP came in at 0.1%.
Consumer Sentiment Lifts In December
The performance of tenants is a critical driver of vacancy rates and returns. While mall REITs aren’t directly exposed to consumer spending, consumer spending is still a critical driver.
Will Simon Property Group Repeat Its Stellar 3Q15 Performance?
Simon Property Group’s healthy revenue growth in 3Q15 was primarily driven by the rise in total sales per square foot and the base minimum rent.
Why strong payroll growth is shaping REIT and homebuilder stocks
We had quite a few important economic releases last week, starting with construction spending, which came in lower than expected. But the prior month was revised upward in a big way.
Why real estate investors should focus on overseas events
The bond market has been reacting strangely to domestic reports lately, which probably means something international is causing some sort of flight to safety.
How Interest Rates Affect REIT Valuations
The most common way of calculating the relative value of a REIT such as Simon Property Group (SPG) is the price-to-FFO (funds from operations) multiple.
Why does Vornado report an increase in funds from operations?
Many REITs use funds from operations, including office REITs like Vornado (VNO), S.L. Green (SLG), and Boston Properties (BXP) as well as retail REITs like Simon Property (SPG) and General Growth Properties (GGP).
Simon Property increases funds from operations and keeps dividend
Occupancy percentage increased to 96.5% from 95.1% a year ago—an increase of 140 basis points.
GGP and Other Retail REITs Struggle to Exist in Digital Era
During 1Q17, General Growth Properties’ (GGP) occupancy rate (same-store leased percentage) fell to 95.9% from 96.6% in 1Q16.
Personal incomes increase, but look beyond the headline number
Personal income increased $47.7 billion, or 0.3%, to reach $14.4 trillion in February 2014. Disposable personal income (or DPI) increased $40.3 billion, or 0.3%, from January.
How Does GGP Manage Its Balance Sheet?
GGP reached a debt-to-equity ratio 2.2x in 2014, its highest in the last five years.
Why 2 different forces are driving REITs like Vornado right now
Economic forces that work at cross-purposes to each other are driving the commercial REIT sector. This is similar to the situation that non-agency mortgage REITs are facing.
Week In Review: Strong GDP, Weak Spending And Confidence
Last week was a short one, with the Thanksgiving Day holiday on Thursday and a half day on Friday. Most of the week’s data was front-loaded into Monday through Wednesday.
Why Pershing Square exited General Growth Properties in 1Q14
In 1Q14, Ackman’s Pershing Square exited its position in General Growth Properties (GGP) that accounted for 6.74% of Pershing Square’s 4Q13 portfolio.
Why rising asset prices are driving consumer confidence higher
The CCI is one of the oldest consumer surveys, originally started as a mail-in survey in 1967. It asks respondents whether certain conditions are positive, negative, or neutral.
How GGP Managed Its Expenses in 2Q17
In 2Q17, GGP (GGP) reported NOI (net operating income) of $551.0 million, which came in higher than the previous year at $554.0 million.
Why did Ackman’s Pershing Square exit General Growth Properties?
Last week, Pershing Square exited its entire stake in General Growth Properties.
Will the drop in retail sales affect General Growth Properties?
Over the past couple of months, we’ve seen a drop in retail sales. Part of this is due to falling gasoline prices, but even stripping that out, sales have been lackluster.
Why initial Jobless claims ticked up on a shortened holiday week
Initial jobless claims are one of the few labor market indicators released every week. They increased to 348,000 for the week ended January 24.
The latest drivers for mortgage and commercial REITs and builders
On Tuesday, we had the NFIB Small Business Optimism Report and also the JOLTS job openings report. Interestingly, job openings are at their highest levels since 2001.
Why Pershing Square increased its stake in Air Products and Chemicals
Pershing Square increased its position in Air Products and Chemicals, Inc. from 21.31% in 3Q 2013 to 27.91% in 4Q 2013.
Why REITs Witnessed Free Fall in 2015
Most REIT stocks have experienced a free fall in 2015 after stupendous growth during the past five years. The free fall came as investors avoided REITs due to concerns of higher interest rates.
The Fed’s end of quantitative easing affects REITs and builders
Last week was all about the FOMC meeting for mortgage REITs. The Fed maintained the target Fed Funds rate and ended quantitative easing, as it previously said it would.
Why initial jobless claims keep falling, down to 315,000
Initial jobless claims are one of the few labor market indicators released every week. Unemployment is a profound driver of economic growth.
Simon Property Group’s background: A must-know for investors
Simon Property Group owns, develops, and manages real estate properties that consist of malls, premium outlets, mills, and community or lifestyle centers.
Why the FOMC meeting will dominate the headlines this week
The upcoming week has some important economic data, like housing starts and industrial production, but the FOMC meeting will dominate. Further tapering is more or less assured. The taper should completely finish by the end of the year.
Simon Property Group faces competition from online retailers
Simon Property Group is by far the biggest shopping center REIT in the U.S., with a market capitalization of $53 billion. The next biggest REITs are less than half Simon’s size.
How to Invest in General Growth Properties through ETFs
General Growth Properties has a market cap of $22.1 billion, is part of S&P 500 index, and sees allocation in the major REIT-specific ETFs like ICF.
Mortgage REIT highlights: Mel Watt may come to the rescue
FHFA Chairman Mel Watt discussed ways to increase access to credit, particularly for the first time-homebuyer. Probably the biggest one was a proposal to allow 3% down Fannie Mae loans.
Does the rise of Amazon consign malls to the dustbin of history?
It’s conventional wisdom these days that e-commerce giants like Amazon.com means the end of the shopping mall (and brick-and-mortar retailers in general).
Must-know: Does e-commerce mean the end of malls?
General Growth CEO Sandeep Mathrani spent a lot of time on the conference call discussing the impact of e-commerce on his company (and mall REITs in general).
Rate decision: Why last week’s FOMC results surprised no one
The highlight of last week was the FOMC rate decision. The Fed maintained the Fed funds rate and reduced asset purchases by $10 billion a month.
Must-know: Simon Property Group continues to build its portfolio
The U.S. malls and shopping centers account for roughly 80% of Simon Property Group’s net operating income. During the fourth quarter, the company saw a number of important developments.
Why credit conditions ease, but mortgage credit is still tight
Overall, the financial situation didn’t change materially between the April and June Federal Open Market Committee (or FOMC) meetings.
Why the Fed is remaining on its glide path after the jobs report
We had some other important data, primarily the ISM reports, which showed manufacturing accelerating. The ISM Services report showed that sector accelerating as well.
Assessing Macerich’s Robust Revenue Growth in Fiscal 2014
Macerich reported a consolidated revenue of $1.1 billion in 2014—a figure up by 7.4% over 2013. In 2013, its revenue growth was a whopping 29.1% over 2012.
Low Initial Jobless Claims Signals Labor Market Turnaround
Initial jobless claims Initial jobless claims are one of the few labor market indicators released every week. Unemployment is a profound economic growth driver. Persistent unemployment has been the Achilles’ heel of this recovery. While it seems like the big layoffs are largely finished, firms are still reluctant to aggressively add staff. Initial jobless claims have been […]
Last Week Was All About The Employment Situation Report
The Employment Situation Report last week was the highlight for mortgage real estate investment trusts (or REITs) and real estate investors.
How Rising Interest Rates Could Affect Equity Residential
The Fed indicated that it could implement two more rate hikes in 2017. The market speculates one of the rate hikes could occur in June, and the other one is expected to occur around December 2017.
Why General Growth Properties’ Revenue Declined in 3Q15
General Growth Properties tenant reimbursement, a major source of income for the company, experienced a drop of 7.3% in 3Q15 to $172.5 million over 3Q14.
Why personal income growth of 0.3% isn’t enough for REITs like CBL
Increases in personal income drive consumption, which accounts for roughly 70% of the U.S. economy. Personal incomes dropped precipitously during the Great Recession.
Bonds rally on the slightly bullish FOMC minutes
Bonds rallied on the FOMC minutes, touching as low as 1.93% before selling off and finishing the day with a modest rally.
Critical Real Estate Releases: The FOMC Looms Large
We’ll have some critical real estate-related data points this week, with housing starts and the NAHB Homebuilding Index. The spring selling season is just around the corner.
The push-pull effect of economic strength on the REIT sector
Economic forces that work at cross-purposes are driving the commercial REIT sector. Economic strength is good, but increasing interest rates are a negative.
REIT investors get a break in the action this week
We’re heading into the later part of earnings season, when we hear from the retailers. We’ll have earnings from builder D.R. Horton (DHI) on Tuesday.
Disappointing retail sales affect commercial REITs
Commercial retail REITs such as Simon Property Group (SPG) and General Growth Properties (GGP) focused most on disappointing retail sales data on Tuesday.
Will Ackman’s bearish stance on Herbalife (HLF) finally pay off?
In this six part series, we’ll go through some of the main positions Pershing Square Capital Management LP traded this past quarter.
Change in the economy’s speed limit will affect commercial REITs
The REIT sector uses a lot of leverage. The REITs have to payout 90% of their income as dividends. As a result, they aren’t able to build up big cash cushions. This limitation leaves REITs at the mercy of the credit markets.
Pershing Square Capital Management’s positions in 4Q 2013
Bill Ackman’s Pershing Square Capital Management did not initiate new stakes in 4Q 2013.
Is Simon Property a Good Value Stock at Current Multiples?
Simon Property’s TTM (trailing-12-month) price-to-FFO ratio is 15.0x.
Simon Property to Continue with Expansion Plan to Drive Growth
In its second-quarter 2018 earnings conference call, Simon Property (SPG) stated that it will continue investing in the redevelopment and expansion of its properties.
Rental and Leasing Activity Drove Simon Property’s Q2 Revenues
Simon Property (SPG) has reported five consecutive quarters of upbeat top-line performances.
Where Equity Residential’s Expenses Are Heading
Equity Residential’s (EQR) second-quarter operating expenses increased at a higher rate than the growth rate of same-store revenues.
Why Wall Street Loves Simon Property Group
Simon Property Group’s four back-to-back quarters of positive earnings surprises and its impressive outlook have made analysts optimistic.
Is Simon Property’s Premium Valuation Justified?
Simon Property Group (SPG) can be best evaluated by its price-to-FFO (price-to-funds from operations) multiple.
Expansion, Development Initiatives to Drive SPG’s Income
Analysts expect Simon Property Group (SPG) to report net operating income (or NOI) of $1.07 billion in the second quarter.
Will Expansion Plans Help Simon Property Drive Mall Traffic?
Simon Property Group (SPG) has been putting a lot of focus on the redevelopment and expansion of its properties.
Will Sales-Boosting Initiatives Drive Simon Property’s Q2 2018?
Simon Property Group is undertaking omni-channel retailing and portfolio-restructuring initiatives to maintain traffic amid the retail crisis.
What Do Wall Street Analysts Think of SPG?
Analysts gave SPG a mean price target of $188.10, implying an ~16.0% rise from its current level of $162.26.
Why SPG Is Commanding a Premium in Comparison to Its Peers
A higher price-to-FFO multiple for Simon Property means that it has the capacity to give a predictable return as well as consistent dividend yields to investors.
SPG’s Stable Dividend Policy
During 2016, SPG repurchased 1,409,197 shares at an average price of $181.14 per share.
Key Drivers Contributing to SPG’s Evolution
Simon Property Group’s capital expenditure increased ~15.0% in 2Q17 while it decreased ~1.2% in 3Q17.
Simon Property Group: Altering Strategies to Target Growth in 2018
Simon Property Group (SPG) is expected to pay a dividend of $7.15 per share in 2017, an increase of 10.0%. Its portfolio valuation rose 3.9% for 3Q17 on a year-over-year basis.
What’s Driving GGP’s Dividend Yield Upward
Revenue and earnings GGP (GGP), a retail REIT engaged in US real estate investment, saw its revenue fall 2% in 2016, compared with 5% in 2015. Growth was driven by management fees and other corporate revenue, and offset by minimum rent, tenant recoveries, and overage rent. Its operating expenses rose 4% in 2016 after a 7% […]
Commercial REITs Have Higher Debt-to-Equity Ratios
GGP’s (GGP) debt-to-equity was 1.55x for 2Q17, which was higher than the industrial mean of 1.07x. As of 2Q17, GGP had $2.0 billion of liquidity.
Development Activities of Commercial REITs in 2Q17
Simon Property Group (SPG) had 25 redevelopment expansion projects under construction as of 2Q17.
The Top Lines for REITs Simon Property, GGP, and Vornado
When we consider the top line performance of commercial REITs, we find that they have performed decently during the second quarter.
How GGP Stacks Up against Its Peers after 2Q17
GGP’s estimated price-to-FFO multiple for fiscal 2018 is 14.2x, which is at a premium compared to its peers.
GGP’s Generous Return to Stockholders in 2Q17
In 2Q17, GGP (GGP) paid $17.5 million in dividends to its shareholders. That was higher than $13.3 million paid a year ago.
GGP Has High Debt-to-Equity Ratio as of 2Q17: Can It Be Lowered?
GGP maintained a debt-to-equity ratio of 1.55x for 2Q17. That was higher than the industrial mean of 1.07x.
GGP Grew in 2Q17 Due to Development and Redevelopment
GGP has redeveloped its vacant spaces for non-retail uses such as restaurants, entertainment zones, fitness centers, and grocery stores.
What Caused GGP’s Soft Rent Growth in 2Q17?
GGP’s (GGP) minimum rent fell by $17.0 million in 2Q17, mainly because of dilution resulting from the sale of an interest in the Fashion Show Mall in Las Vegas n 2016.
GGP’s Revenue Rode High in 2Q17, Backed by New Leases
GGP’s minimum rent fell 3.9% to $349.2 million, and tenant recoveries fell 4.6% to $161.9 million. Overage rent fell 25.0% to $3.3 million.
GGP’s 2Q17 Results from an Investor’s Perspective
GGP (GGP) reported funds from operations (or FFO) of $0.35 per share, which was in line with Wall Street estimates. Adjusted FFO remained flat year-over-year.
How AvalonBay Communities Leverages Its Balance Sheet
AvalonBay has been able to maintain a low debt-to-equity ratio in the last five years. The company reported a debt-to-equity ratio of ~1.5x in 1Q17.
AvalonBay Communities: A Rewarding Stock for Shareholders
During 2016, AvalonBay Communities (AVB) repurchased 57,172 shares worth $0.6 million.
The Impact of Trump’s Proposed 2018 Budget on Residential REITs
According to President Trump’s proposed budget for fiscal 2018, the administration is expected to slash $6 million from the U.S. Department of Housing and Urban Development budget, decreasing its funding by 13.2% to $40.7 billion.
AvalonBay Communities and the Residential REIT Industry Overview
According to NHAB’s Housing Economics survey, housing starts are expected to rise 6.2% in 2017 and ~6.3% in 2018, backed by respective 9.6% and ~11.8% gains in single-family home sales.
GGP: A Rewarding Stock for Shareholders
General Growth Properties (GGP) has been paying dividends to its shareholders consistently in every quarter since it raised its dividend 11.1% during 4Q16 to $0.22.
GGP and Retail REITs: Malls Are Winning the Fight against Depletion
President Trump doesn’t appear to be inclined to support a higher minimum wage for workers. This could help retail REITs control their operating expenses, boosting their margins.
GGP: Redevelopment Helps Drive Traffic to Changing Malls
Mall owners such as GGP (GGP), Simon Property Group (SPG), DDR (DDR), and Kimco Realty (KIM) are redeveloping their vacant areas that were once occupied by anchor tenants.
GGP Inc.—A Growth Story amid Struggling Retail REITs
Despite the belief that US malls are giving way to e-commerce, malls are adapting to consumers’ changing needs. Mall owner GGP (GGP) has been able to maintain its earnings streak since 2012.
How Wall Street Analysts View Simon Property Group
Analysts gave SPG a mean price target of $202.45, implying an ~25.1% rise from its current level of $161.78.
Investing in Simon Property Group: Relative Valuation
Simon Property Group’s current price-to-FFO multiple is ~14.1x.
Can REITs Like Simon Property Group Survive the Fed’s Interest Rate Hikes?
The hawkish interest rate environment has added to the woes of mall owners like Simon Property (SPG), as well as the REIT industry.
Simon Property Group: A Must-Know Overview
On March 31, 2017, Simon Property Group’s business in the US stood at a hefty figure of 206 properties, including malls, premium outlets, and lifestyle centers.
Simon Property Group: A Growth Story amid Tremors in REITs
On April 27, Simon Property Group (SPG) reported 1Q17 earnings per share of $1.53, a 2% beat of the consensus estimate of $1.50.
Why GGP Was the S&P 500’s Top Gainer on May 1
GGP released its 1Q17 earnings report on May 1. It opened lower, but recovered and rose due to funds from operations numbers and its 2017 guidance.
US MBA Mortgage Applications Fell on a Weekly Basis
According to the Mortgage Bankers Association of America, the US (IVV) (SPY) (VOO) MBA index fell 3.3% in the week ending on March 18, 2016.
US Mortgage Applications Fell on a Weekly Basis
The US (IVV) (SPY) (VOO) MBA Index fell 3.3% in the week ending on March 11. MBA mortgage applications gained by 0.2% in the previous week.
General Growth Properties: Less Borrowing Bodes Well
To lower its effective borrowing costs and extend its maturity profile, GGP was active in unsecured and secured credit markets in fiscal 2015.
Simon’s Valuation Is Unlikely to Expand Further
Among the 25 analysts following Simon Property stock, 20 have assigned a “buy” rating. The company received no “sell” ratings from any analysts while five brokerages have assigned a “hold” rating.
General Growth Properties’ Revenue Fell in 4Q15
Minimum rent contributed to 60.1% of General Growth Properties’ total revenue in 4Q15.
Simon’s 4Q15 Earnings: Borrowing Cost Should Remain at Same Level
The total debt of Simon Property Group (SPG) increased from $20.8 billion as of the end of 4Q14 to $22.5 billion as of the end of 4Q15.
SPG’s 4Q15 Operating Metrics: Occupancy under Pressure
Simon Property Group (SPG) had 179 properties under US malls and premium outlets as of the end of 4Q15 compared to 177 as of the end of 4Q14.
Why Barbara Corcoran Credits Donald Trump for Changing Manhattan
In an interview with Wall Street Week, Corcoran was asked about her views on Trump. According to Corcoran, Trump is “due the credit of changing the view of Manhattan to the view of luxury Manhattan.”
Simon Property’s EBITDA Margin Likely to Improve in 4Q15
Wall Street analysts expect Simon Property’s EBITDA to be $1.1 billion in 4Q15 compared to $967.4 million in 4Q14. That would be a growth of 15.4%.
Simon Property Is Poised for a Strong 4Q15 Release
Simon Property Group (SPG) is set to release its 4Q15 and full year 2015 earnings on January 29, 2016. In 2015, it returned 4.9%. The stock was trading at $186.40 on January 19, 2016.