General Growth Properties (NYSE:GGP)

CAPS Rating: 2 out of 5

A self-administered and self-managed real estate investment trust whose business is focused in two main areas: Master Planned Communities and Retail and Other.

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Member Avatar TMFScarletGray (99.25) Submitted: 11/28/2013 11:53:54 PM : Outperform Start Price: $5.66 GGP Score: +310.12

BPY is upping position over own undervalued shares. BAM is a proven cap allocator. I look for greater than 12% gains here...

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Member Avatar bIlluminati (30.18) Submitted: 8/19/2013 1:51:07 PM : Underperform Start Price: $18.36 GGP Score: -26.09

hIGH RISK AT A TIME THAT IS UNWISE.

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Member Avatar nosfool (48.01) Submitted: 3/3/2011 5:57:17 PM : Outperform Start Price: $13.20 GGP Score: +55.63

income and capital appreciation play, the hedge funds are heavily invested and balance sheet is cleaned up post bankruptcy so a fresh start with strong portfolio of properties

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Member Avatar LSchwab1 (< 20) Submitted: 2/24/2011 12:20:21 AM : Outperform Start Price: $13.04 GGP Score: +55.26

Not much change in price since it exited bankruptcy. If you believe there is a place for commercial real estate, this one is worth a look.

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Member Avatar Ak66 (65.27) Submitted: 2/16/2011 10:19:29 PM : Outperform Start Price: $13.38 GGP Score: +52.86

Commercial Real Estate. Foolish Special Ops recommendation. I think this one will be bumpy, but generally outperform. I am also in PEB, a hotel pre-REIT.

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Member Avatar unusualpro (< 20) Submitted: 1/23/2011 12:05:33 PM : Outperform Start Price: $12.31 GGP Score: +64.80

Bravo said soo

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Member Avatar SebaceousGlande (< 20) Submitted: 11/26/2010 10:45:17 PM : Outperform Start Price: $13.66 GGP Score: +28.25

Proper valuation for this company should establish itself over the next three quarters 25-45 by one year from now.

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Member Avatar franktejon (< 20) Submitted: 11/2/2010 4:05:03 AM : Outperform Start Price: $11.39 GGP Score: +71.26

when dow go to 31 points in the near future this one go over $100 a share

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Member Avatar prettyricky (62.03) Submitted: 10/21/2010 2:43:35 PM : Outperform Start Price: $11.26 GGP Score: +71.28

In it for the long run

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Member Avatar 408BALLER (< 20) Submitted: 10/14/2010 2:10:32 PM : Outperform Start Price: $10.64 GGP Score: +85.22

Still has a ways to go UP

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Member Avatar ryanjmorrell (< 20) Submitted: 10/11/2010 9:56:18 PM : Outperform Start Price: $9.27 GGP Score: +109.72

Special stock, soon to be emerging from Chap.11. There should be a large demand for this stock since it is the 2nd largest mall operator in the country. Also large funds will be purchasing it because of its scope in the REIT sector

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Member Avatar WPThatcher (< 20) Submitted: 9/10/2010 10:45:48 AM : Outperform Start Price: $9.79 GGP Score: +99.25

I have bought into the contrarian thinking of Whitney Tilson and Brookfield Asset Management.

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Member Avatar jsgant13 (99.22) Submitted: 9/7/2010 3:46:18 PM : Outperform Start Price: $9.79 GGP Score: +95.83

berkowitz and others

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Member Avatar limeonaire (99.30) Submitted: 8/24/2010 12:11:51 PM : Outperform Start Price: $9.24 GGP Score: +106.70

I think malls are dying, and I was previously convinced that GGP was going down the tubes as a result. But in the meantime, the REIT continues to outperform, much to my chagrin—maybe its principals also got the memo?

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Member Avatar rctrtx1 (58.61) Submitted: 5/20/2010 12:29:32 PM : Outperform Start Price: $8.48 GGP Score: +138.65

Should emerge from Ch 11 with strong balance sheet and grow.

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Member Avatar ericcote1est (64.07) Submitted: 3/14/2010 3:29:00 AM : Outperform Start Price: $9.82 GGP Score: +104.58

ccest compte

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Member Avatar ValueMrk (99.71) Submitted: 3/11/2010 11:30:04 AM : Outperform Start Price: $9.71 GGP Score: +107.34

Undervalued! Emerging from BK and with the infusion of capital and depressed assets we are missing the true value of this company. Real estate portfolio is so undervalued it makes gold look pathetic!

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Member Avatar GreatStocks3728 (< 20) Submitted: 2/26/2010 4:20:18 PM : Outperform Start Price: $8.70 GGP Score: +135.30

Good future earnings.

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Member Avatar JakilaTheHun (99.92) Submitted: 1/4/2010 1:57:24 PM : Outperform Start Price: $5.26 GGP Score: +349.82

See my article for a detailed analysis:

http://seekingalpha.com/article/178615-why-eric-hovde-is-wrong-about-general-growth-properties

My belief is that General Growth is worth at least $15 - $20, if not more.

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Member Avatar AllStarPortfolio (27.82) Submitted: 1/4/2010 7:04:03 AM : Outperform Start Price: $4.97 GGP Score: +380.74

BravoBevo (100.00) wrote:

General Growth Properties Inc. (GGWPQ.PK) continues to reside under bankruptcy protection. Historically, two brothers, Martin and Matthew Bucksbaum, started with a Marshalltown Iowa family grocery store, and borrowed $1,200,000 in 1954 (when a dollar was worth something) to build a shopping center in Cedar Rapids, Iowa. From that model, the brothers built shopping centers throughout the Midwest, went public in 1993, moved its headquarters from Des Moines to Chicago, and began an acquisition spree of upscale shopping malls, including the purchase of Rouse Co, the owner of 30 malls that included Chicago’s Water Tower Place. In the last decade, the company had grown to become the nation's second-largest shopping mall company, with more than 200 centers, but with those properties the company was saddled with $27 billion of debt. Each property is held in a special purpose subsidiary and is financed in large part by debt financing that is collateralized by a mortgage on the property. Lenders often will take a pool of mortgaged backed loans, bundle them together into commercial mortgage backed securities (CMBS), and sell those securities into the markets.

As credit markets began drying up in 2007 and real estate properties have been losing their value, the company filed for bankruptcy in April 2009 to obtain protection from its creditors. U.S. Department of Treasury rules governing the CMBS market historically have prohibited the restructuring of CMBS loans unless the borrower is in payment default of its loan. So a “performing” loan that has an out-of-date interest rate or repayment schedule could not be modified until the loan would become “nonperforming.” In a first round of relief to the CMBS market, the Treasury released new tax rules to allow modifications of loans even if the collateral is currently generating cash that meets a loans minimum payment requirements. See the details in this WSJ article: http://online.wsj.com/article/SB125306317643414339.html

The company lobbied for these new rules and, since they were implemented in September 2009, the company has been in prime position to take advantage of them by restructuring the loans on its many properties. Modifying the CMBS loans allows the company to take advantage of lower interest rates and to extend the loan maturities over the extended life of the properties. As these changes are negotiated and applied to the portfolio of properties, several advantages result: (1) nonperforming loans and loans that are barely performing become fully performing, thus moving any special purpose subsidiaries owning non-performing property off of the creditwatch lists of lenders; (2) with lower rates and extended maturities, less of the properties' current cash flow is needed to service current maturities of long-term debt, thereby freeing up cash to make needed improvements on the properties and to distribute cash to the parent; (3) thawing of the old rules encourages the commercial property credit markets to resume lending, which eases the gridlock in real property transactions currently existing; and (4) the culmination, as least from the viewpoint of the company, is its emergence from bankruptcy protection.

For most of 2009, the bankruptcy judge ruling on the parallel bankruptcies of GGWPQ and its many special purpose subsidiaries has consistently rejected various motions and requests put forth by secured creditors who have attempted to unwind the bankruptcies of the subsidiaries. The company appears to have won on several key points in the restructuring. WSJ reports that, as a result, additional lenders likely felt pressure to strike a deal with the company because "Bankruptcy Judge Allan Gropper has sided with General Growth on several occasions in the case." Also, the arrangement allows mortgage holders to report the loans as performing on their books at the end of the year rather than distressed at a time when delinquency rates on commercial mortgages are rising.

Recently (12/15/2009), hedge fund manager Eric Hovde, who oversees about $1 billion of financial and real estate investments, disclosed he is shorting General Growth, after the stock more than doubled in the past month. Hovde argues in his analysis that because of the dramatic decline in consumer spending and plummeting prices for commercial properties, the 200 malls and other properties owned by General Growth are worth less than the associated debt. He notes that new and renewed leases in the third quarter were struck at $31.29 per square foot compared with a rate of $46.57 for all of General Growth's leases, a 33 percent decline. Prior leases on the same properties covered by new and renewed renters paid $35.43, indicating a 12 percent drop. Some of General Growth's competitors, including Simon Property Group Inc (SPG), have been buying up GGWPQ's debt and could make a play for some or all of its assets.

The rapid recent price rise is hardly surprising; however, the timing of when these pricing jumps will occur is near impossible to predict (otherwise, we'd all be rich). Although the current price level is about double from when the initial recommendation for GGWPQ was made in ASP, the current dip below $10 might be a reasonable entry point for those willing to accept moderate risk ahead of the company's eventual emergence from bankruptcy, which could be delayed somewhat if the court's approval of the loan restructurings of various portfolios of the properties occurs in staged segments. Personally, I don't view the delay (and continuing protections) as being problematic.

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