Mutual Investment Club of Cornell General Growth Properties (GGP) 1 And its ugly step-sister…...

transcript

Mutual Investment Club of Cornell

General Growth Properties (GGP)

And its ugly step-sister…

Melody Chu

Original Pitch Summary

Business3

(1) Includes anchor GLA and the Company’s pro rata share of JV malls.(2) >400,000 employees including retail tenants.

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

Why Malls?5

Company History (2008-Current)

Why did GGP declare bankruptcy?

What the Problem was…8

Source: Bank of America Equity Research

“Fair and Equitable”9

Per Share Value10

Premium to Current 160% 652%

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

Company Update

Update

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

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

Market Landscape Update

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

Since early 2009…

GGP Post Chapter 11

Reorganization Timeline

Company Structure26

Capital Structure27

PF GGP

PF GGO

Conclusion

Mutual Investment Club of Cornell General Growth Properties (GGP) 1 And its ugly step-sister…...

Documents