Mutual Investment Club of Cornell General Growth Properties (GGP) 1 And its ugly step-sister…...
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Transcript of Mutual Investment Club of Cornell General Growth Properties (GGP) 1 And its ugly step-sister…...
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
General Growth Properties (GGP)
1
And its ugly step-sister…
Melody Chu
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Original Pitch Summary
2
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Business3
(1) Includes anchor GLA and the Company’s pro rata share of JV malls.(2) >400,000 employees including retail tenants.
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Properties4
Geographically well-diversified with malls in 44 states, Brazil, and Turkey
Has over 24,000 tenants with its largest tenant accounting for only 2.7% of revenue as of March 31, 2009
Quality assets with ‘A’ grade to 73 malls in GGP’s portfolio1
(1) As rated by Green Street
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Why Malls?5
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Company History (2008-Current)
6
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Why did GGP declare bankruptcy?
7
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
What the Problem was…8
Source: Bank of America Equity Research
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
“Fair and Equitable”9
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Per Share Value10
Premium to Current 160% 652%
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Take-Aways11
When buying the equity at ~$4, one is getting the following for free:
>90 non “A” malls15 grocery-anchored stripsGGMIMPCHidden Asset Value
225 shares @ $4.00 per share = $900
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Company Update
12
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Update
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Update
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
2Q 2010 Earnings
Funds from operations was $93.6mm vs. $58.2mm in 2Q 2009
Earnings per share were a loss of $0.37 vs. a loss of $0.51 in 2Q 2009
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
2Q 2010 Earnings (cont.)
GGP remains focused on 3 strategies: Restructuring its balance sheet
GGP will emerge with substantially less debt, satisfy debt and other claims in full, and implement a recapitalization with a minimum of $7.0bn of new equity capital
Realigning the Company’s property portfolio Restructured all of approximately $15bn of the project-
level debt included in the bankruptcy with no restructured loan maturing before January 1, 2014
Reengineering operations to be more effective The Company has named four new executives to
assume the roles of CFO and department heads for asset management, leasing and marketing/communications
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
2Q 2010 Earnings (cont.)
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
2Q 2010 Earnings (cont.)
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Market Landscape Update
19
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Since early 2009…
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Since early 2009…
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Since early 2009…
Mall REITs have regained access to capital Simon Debt Issuances
01/19/10: Sale of $2.25bn of senior unsecured notes
Macerich Equity Issuance 04/15/10: Raised $1.23bn in equity, the
largest secondary stock offering by a REIT on record
62% oversubscribed
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Since early 2009…
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
GGP Post Chapter 11
24
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Reorganization Timeline
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Company Structure26
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Capital Structure27
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
PF GGP
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
PF GGP
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
PF GGP
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
PF GGP
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
PF GGP
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
PF GGP
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
PF GGP
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
PF GGO
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
PF GGO
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
PF GGO
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Conclusion
Mutual Investment Club of Cornell
Mutual Investment Club of Cornell
Q&A
39