General Growth looking at urban retail property: CEO
NEW YORK (Reuters) - Mall owner General Growth Properties Inc (GGP.N) is considering buying urban retail property, but the real estate would have to be of the highest quality and be big enough to attract the type of luxury tenants that occupy the company's top malls, Chief Executive Sandeep Mathrani said on Thursday.
General Growth may be interested in one or two city properties in the United States that could meet that criteria, should they come up for sale, Mathrani said.
But he also said at the National Association of Real Estate Investment Trust's Investor Forum in Chicago, "We're not starting a business to buy street retail."
Last month, Reuters reported that General Growth was partnering with Brookfield Office Properties Inc (BPO.TO) to bid for 650 Madison Avenue in Manhattan, an office building with about 75,000 square feet of street-level retail space. They lost out to New York-based Crown Acquisitions and Highgate, which agreed to buy the building for $1.29 billion.
Mathrani also said the recent rise in interest rates would have little effect on General Growth's funds from operations, a real estate investment trust performance measure that usually excludes gains or losses from property sales and the effect of depreciation on earnings.
"In a rising interest-rate environment, GGP's debt profile is laddered in a way ... that the impact on FFO will be minimal, if any," he said.
(Reporting by Ilaina Jonas; editing by John Wallace)