Earnings flat for
owner of Ala Moana
Center, Victoria Ward
General Growth Properties Inc., owner of Ala Moana and Victoria Ward centers, said second-quarter earnings were little changed as acquisitions added to depreciation costs.
Net income rose to $51.1 million, or 23 cents a share, from $51 million, or 23 cents, a year earlier, the Chicago-based company said. Depreciation and amortization costs surged 65 percent to $86.1 million, and the company's interest expense climbed 41 percent to $90.5 million.
"We've bought a lot of assets, and there has been some significant additional depreciation as a result of the acquisitions," Chief Financial Officer Bernard Freibaum said. The interest-expense rise is "just really a function of having more debt. The additional income, of course, more than covers the additional interest expense."
General Growth has spent about $1.5 billion on acquisitions this year, Freibaum said. In the second quarter, General Growth bought a retail center in Baton Rouge, La., and a 50 percent stake in a Birmingham, Ala., mall for $430.8 million. It also acquired the Grand Canal Shoppes at the Venetian Casino Resort in Las Vegas for about $766 million.
Revenue for the real estate investment trust increased 32 percent to $376.2 million. Comparable center net operating income rose 2.1 percent.