Simon Property Group Inc. (SPG), a leading real estate investment trust (REIT), reported first-quarter 2010 FFO (funds from operations) of $325.6 million or $0.94 per share, compared to $476.8 million or $1.61 per share in the year-earlier quarter. (Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.)
First quarter 2010 FFO included a loss on extinguishment of debt to the tune of $165.6 million or $0.47 per share. Excluding non-recurring items, FFO for the quarter was $491.2 million or $1.41 per share. Total revenue increased to $925.1 million from $918.5 million in the year-earlier quarter.
Occupancy in the regional malls and premium outlet centers combined portfolio was 92.2% at quarter end, compared to 92.1% in the year-ago period. Comparable sales in the combined portfolio remained unchanged during the quarter at $467 per square foot, compared to the prior year. Average rent per square feet in the combined portfolio increased marginally to $38.72, compared to $37.51 in the year-ago period.
The company continued its active development and redevelopment programs. Simon Property opened four development projects during the quarter. These included two expansion projects in the domestic market (one each in Texas and Massachusetts) and two shopping centers in Italy. The company also started construction work on an expansion project in Texas, two premium outlets in Japan and a premium outlet in South Korea.
During the quarter, Simon Property sold $2.25 billion of senior unsecured notes in an underwritten public offering. Net proceeds from the offering were used to fund the purchase of senior unsecured notes tendered in an any and all cash tender offer launched on Jan 12, 2010. Also, Simon Property repaid $300 million of senior unsecured notes that matured on March 18, 2010, and $282 million of mortgage loans.
Simon Property increased its unsecured corporate credit facility from $3.565 billion to $3.845 billion. At quarter end, the company had approximately $3.6 billion of cash on hand, including its share of joint venture cash, and an additional $3.2 billion of available capacity on its corporate credit facility.
The company declared a quarterly cash dividend of 60 cents per share. Simon Property increased the lower end of its earlier recurring FFO guidance for 2010 to between $5.77 and $5.87 per share from $5.72 to $5.87.
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