Regional Mall REITs Hang On During Third Quarter (11/19)
Nov 19, 2008 10:10 AM
Regional mall REITs turned in a solid performance in the third quarter of 2008, amid increasingly grim same-store sales results and reports of crimped consumer spending. Of the seven REITs, three missed analyst’s consensus estimates while the majority beat estimates.
Simon Property Group, Taubman Centers, Inc., CBL & Associates Properties Trust and Glimcher Realty Trust, exceeded estimates by as much as $0.04 per share for the three months ended Sept. 30. Macerich Co., PREIT and General Growth Properties missed analysts’ consensus estimates during the period by $0.03 per share to $0.12 per share.
“It’s a very tough environment, but I think most of the management teams are making some pretty good efforts,” says Rich Moore, an analyst with RBC Capital Markets. “From a guidance standpoint, malls were in the middle of the pack,” when compared to the rest of the REIT universe.
Simon Property Group beat consensus estimates by $ 0.04 per share, with FFO growth of 10.3 percent to $1.61 per share compared to the third quarter of 2007. The Indianapolis-based REIT posted same-store NOI growth of 1.9 percent for its regional mall properties and 7.7 percent for its outlet centers. However, occupancy at Simon’s 242-million-square-foot portfolio declined 20 basis points at its regional malls to 92.5 percent; and 80 basis points to 98.8 percent at its outlet centers.
“While we believe Simon is a leader in its peer group, we do not believe it is exempt from the current economic environment,” wrote Carol L. Kemple, an analyst at Hilliard Lyons.
Both CBL & Associates Properties and Glimcher Realty Trust beat consensus analyst estimates by $0.02 per share during the third quarter.
