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GGP » Topics » Deteriorating economic conditions, especially in the retail sector, will have an adverse affect on our revenues and available cashThese excerpts taken from the GGP 10-K filed Feb 27, 2009. Deteriorating
economic conditions, especially in the retail sector, will have
an adverse affect on our revenues and available
cash
General and retail economic conditions continue to weaken, and
we expect this weakness to continue and worsen in 2009. The
unemployment rate is expected to continue to rise, consumer
confidence and spending has decreased dramatically and the stock
market remains extremely volatile. Given these expected economic
conditions, we believe there is a significantly increased risk
that the sales of stores operating in our centers will continue
to decrease, which will have the following negative effect on
our operations:
Ability to lease and collect rent. Our results
of operations depend on our ability to continue to lease space
in our properties on economically favorable terms. If the sales
of stores operating in our centers decline sufficiently, tenants
might be unable to pay their existing minimum rents or expense
recovery charges, since these rents and charges would represent
a higher percentage of their sales. If our tenants’ sales
decline, new tenants would be less likely to be willing to pay
minimum rents as high as they would otherwise pay. In addition,
as substantially all of our income is derived from rentals of
real property, our income and cash available for debt service,
operations or distribution to our stockholders would be
adversely affected if a significant number of tenants were
unable to meet their obligations to us.
Bankruptcy or store closures of tenants. Our
leases generally do not contain provisions designed to ensure
the creditworthiness of the tenant, and a number of companies in
the retail industry, including some of our tenants, have
declared bankruptcy or voluntarily closed certain of their
stores in recent years, and this trend is expected to increase
in 2009. The bankruptcy or closure of a major tenant,
particularly an Anchor, may have a material adverse effect on
the retail properties affected and the income produced by these
properties and may make it substantially more difficult to lease
the remainder of the affected retail properties. As a result,
the bankruptcy or closure of a major tenant and potential
additional closures as a result of co-tenancy requirements could
result in a lower level of revenues and cash available.
Department store productivity. Department
store consolidations, as well as declining sales productivity in
certain instances, are resulting in the closure of existing
department stores and we may be unable to re-lease this area or
to re-lease it on comparable or more favorable terms. Other
tenants may be entitled to modify the terms of their existing
leases, including those pertaining to rent payment, in the event
of such closures. Additionally, department store closures could
result in decreased customer traffic which could lead to
decreased sales at other stores.
Ability to attract new tenants. The factors
described above not only effect our current tenants and
operations, but also indirectly effect our ability to attract
new tenants.
Deteriorating
economic conditions, especially in the retail sector, will have
an adverse affect on our revenues and available
cash
General and retail economic conditions continue to weaken, and
we expect this weakness to continue and worsen in 2009. The
unemployment rate is expected to continue to rise, consumer
confidence and spending has decreased dramatically and the stock
market remains extremely volatile. Given these expected economic
conditions, we believe there is a significantly increased risk
that the sales of stores operating in our centers will continue
to decrease, which will have the following negative effect on
our operations:
Ability to lease and collect rent. Our results
of operations depend on our ability to continue to lease space
in our properties on economically favorable terms. If the sales
of stores operating in our centers decline sufficiently, tenants
might be unable to pay their existing minimum rents or expense
recovery charges, since these rents and charges would represent
a higher percentage of their sales. If our tenants’ sales
decline, new tenants would be less likely to be willing to pay
minimum rents as high as they would otherwise pay. In addition,
as substantially all of our income is derived from rentals of
real property, our income and cash available for debt service,
operations or distribution to our stockholders would be
adversely affected if a significant number of tenants were
unable to meet their obligations to us.
Bankruptcy or store closures of tenants. Our
leases generally do not contain provisions designed to ensure
the creditworthiness of the tenant, and a number of companies in
the retail industry, including some of our tenants, have
declared bankruptcy or voluntarily closed certain of their
stores in recent years, and this trend is expected to increase
in 2009. The bankruptcy or closure of a major tenant,
particularly an Anchor, may have a material adverse effect on
the retail properties affected and the income produced by these
properties and may make it substantially more difficult to lease
the remainder of the affected retail properties. As a result,
the bankruptcy or closure of a major tenant and potential
additional closures as a result of co-tenancy requirements could
result in a lower level of revenues and cash available.
Department store productivity. Department
store consolidations, as well as declining sales productivity in
certain instances, are resulting in the closure of existing
department stores and we may be unable to re-lease this area or
to re-lease it on comparable or more favorable terms. Other
tenants may be entitled to modify the terms of their existing
leases, including those pertaining to rent payment, in the event
of such closures. Additionally, department store closures could
result in decreased customer traffic which could lead to
decreased sales at other stores.
Ability to attract new tenants. The factors
described above not only effect our current tenants and
operations, but also indirectly effect our ability to attract
new tenants.
Deteriorating
economic conditions, especially in the retail sector, will have
an adverse affect on our revenues and available
cash
General and retail economic conditions continue to weaken, and
we expect this weakness to continue and worsen in 2009. The
unemployment rate is expected to continue to rise, consumer
confidence and spending has decreased dramatically and the stock
market remains extremely volatile. Given these expected economic
conditions, we believe there is a significantly increased risk
that the sales of stores operating in our centers will continue
to decrease, which will have the following negative effect on
our operations:
Ability to lease and collect rent. Our results
of operations depend on our ability to continue to lease space
in our properties on economically favorable terms. If the sales
of stores operating in our centers decline sufficiently, tenants
might be unable to pay their existing minimum rents or expense
recovery charges, since these rents and charges would represent
a higher percentage of their sales. If our tenants’ sales
decline, new tenants would be less likely to be willing to pay
minimum rents as high as they would otherwise pay. In addition,
as substantially all of our income is derived from rentals of
real property, our income and cash available for debt service,
operations or distribution to our stockholders would be
adversely affected if a significant number of tenants were
unable to meet their obligations to us.
Bankruptcy or store closures of tenants. Our
leases generally do not contain provisions designed to ensure
the creditworthiness of the tenant, and a number of companies in
the retail industry, including some of our tenants, have
declared bankruptcy or voluntarily closed certain of their
stores in recent years, and this trend is expected to increase
in 2009. The bankruptcy or closure of a major tenant,
particularly an Anchor, may have a material adverse effect on
the retail properties affected and the income produced by these
properties and may make it substantially more difficult to lease
the remainder of the affected retail properties. As a result,
the bankruptcy or closure of a major tenant and potential
additional closures as a result of co-tenancy requirements could
result in a lower level of revenues and cash available.
Department store productivity. Department
store consolidations, as well as declining sales productivity in
certain instances, are resulting in the closure of existing
department stores and we may be unable to re-lease this area or
to re-lease it on comparable or more favorable terms. Other
tenants may be entitled to modify the terms of their existing
leases, including those pertaining to rent payment, in the event
of such closures. Additionally, department store closures could
result in decreased customer traffic which could lead to
decreased sales at other stores.
Ability to attract new tenants. The factors
described above not only effect our current tenants and
operations, but also indirectly effect our ability to attract
new tenants.
Deteriorating economic conditions, especially in the retail sector, will have an adverse affect on our revenues and available cash General and retail economic conditions continue to weaken, and we expect this weakness to continue and worsen in 2009. The unemployment rate is expected to continue to rise, consumer confidence and spending has decreased dramatically and the stock market remains extremely volatile. Given these expected economic conditions, we believe there is a significantly increased risk that the sales of stores operating in our centers will continue to decrease, which will have the following negative effect on our operations: Ability to lease and collect rent. Our results of operations depend on our ability to continue to lease space in our properties on economically favorable terms. If the sales of stores operating in our centers decline sufficiently, tenants might be unable to pay their existing minimum rents or expense recovery charges, since these rents and charges would represent a higher percentage of their sales. If our tenants’ sales decline, new tenants would be less likely to be willing to pay minimum rents as high as they would otherwise pay. In addition, as substantially all of our income is derived from rentals of real property, our income and cash available for debt service, operations or distribution to our stockholders would be adversely affected if a significant number of tenants were unable to meet their obligations to us. Bankruptcy or store closures of tenants. Our leases generally do not contain provisions designed to ensure the creditworthiness of the tenant, and a number of companies in the retail industry, including some of our tenants, have declared bankruptcy or voluntarily closed certain of their stores in recent years, and this trend is expected to increase in 2009. The bankruptcy or closure of a major tenant, particularly an Anchor, may have a material adverse effect on the retail properties affected and the income produced by these properties and may make it substantially more difficult to lease the remainder of the affected retail properties. As a result, the bankruptcy or closure of a major tenant and potential additional closures as a result of co-tenancy requirements could result in a lower level of revenues and cash available. Department store productivity. Department store consolidations, as well as declining sales productivity in certain instances, are resulting in the closure of existing department stores and we may be unable to re-lease this area or to re-lease it on comparable or more favorable terms. Other tenants may be entitled to modify the terms of their existing leases, including those pertaining to rent payment, in the event of such closures. Additionally, department store closures could result in decreased customer traffic which could lead to decreased sales at other stores. Ability to attract new tenants. The factors described above not only effect our current tenants and operations, but also indirectly effect our ability to attract new tenants. Deteriorating economic conditions, especially in the retail sector, will have an adverse affect on our revenues and available cash General and retail economic conditions continue to weaken, and we expect this weakness to continue and worsen in 2009. The unemployment rate is expected to continue to rise, consumer confidence and spending has decreased dramatically and the stock market remains extremely volatile. Given these expected economic conditions, we believe there is a significantly increased risk that the sales of stores operating in our centers will continue to decrease, which will have the following negative effect on our operations: Ability to lease and collect rent. Our results of operations depend on our ability to continue to lease space in our properties on economically favorable terms. If the sales of stores operating in our centers decline sufficiently, tenants might be unable to pay their existing minimum rents or expense recovery charges, since these rents and charges would represent a higher percentage of their sales. If our tenants’ sales decline, new tenants would be less likely to be willing to pay minimum rents as high as they would otherwise pay. In addition, as substantially all of our income is derived from rentals of real property, our income and cash available for debt service, operations or distribution to our stockholders would be adversely affected if a significant number of tenants were unable to meet their obligations to us. Bankruptcy or store closures of tenants. Our leases generally do not contain provisions designed to ensure the creditworthiness of the tenant, and a number of companies in the retail industry, including some of our tenants, have declared bankruptcy or voluntarily closed certain of their stores in recent years, and this trend is expected to increase in 2009. The bankruptcy or closure of a major tenant, particularly an Anchor, may have a material adverse effect on the retail properties affected and the income produced by these properties and may make it substantially more difficult to lease the remainder of the affected retail properties. As a result, the bankruptcy or closure of a major tenant and potential additional closures as a result of co-tenancy requirements could result in a lower level of revenues and cash available. Department store productivity. Department store consolidations, as well as declining sales productivity in certain instances, are resulting in the closure of existing department stores and we may be unable to re-lease this area or to re-lease it on comparable or more favorable terms. Other tenants may be entitled to modify the terms of their existing leases, including those pertaining to rent payment, in the event of such closures. Additionally, department store closures could result in decreased customer traffic which could lead to decreased sales at other stores. Ability to attract new tenants. The factors described above not only effect our current tenants and operations, but also indirectly effect our ability to attract new tenants. Deteriorating economic conditions, especially in the retail sector, will have an adverse affect on our revenues and available cash General and retail economic conditions continue to weaken, and we expect this weakness to continue and worsen in 2009. The unemployment rate is expected to continue to rise, consumer confidence and spending has decreased dramatically and the stock market remains extremely volatile. Given these expected economic conditions, we believe there is a significantly increased risk that the sales of stores operating in our centers will continue to decrease, which will have the following negative effect on our operations: Ability to lease and collect rent. Our results of operations depend on our ability to continue to lease space in our properties on economically favorable terms. If the sales of stores operating in our centers decline sufficiently, tenants might be unable to pay their existing minimum rents or expense recovery charges, since these rents and charges would represent a higher percentage of their sales. If our tenants’ sales decline, new tenants would be less likely to be willing to pay minimum rents as high as they would otherwise pay. In addition, as substantially all of our income is derived from rentals of real property, our income and cash available for debt service, operations or distribution to our stockholders would be adversely affected if a significant number of tenants were unable to meet their obligations to us. Bankruptcy or store closures of tenants. Our leases generally do not contain provisions designed to ensure the creditworthiness of the tenant, and a number of companies in the retail industry, including some of our tenants, have declared bankruptcy or voluntarily closed certain of their stores in recent years, and this trend is expected to increase in 2009. The bankruptcy or closure of a major tenant, particularly an Anchor, may have a material adverse effect on the retail properties affected and the income produced by these properties and may make it substantially more difficult to lease the remainder of the affected retail properties. As a result, the bankruptcy or closure of a major tenant and potential additional closures as a result of co-tenancy requirements could result in a lower level of revenues and cash available. Department store productivity. Department store consolidations, as well as declining sales productivity in certain instances, are resulting in the closure of existing department stores and we may be unable to re-lease this area or to re-lease it on comparable or more favorable terms. Other tenants may be entitled to modify the terms of their existing leases, including those pertaining to rent payment, in the event of such closures. Additionally, department store closures could result in decreased customer traffic which could lead to decreased sales at other stores. Ability to attract new tenants. The factors described above not only effect our current tenants and operations, but also indirectly effect our ability to attract new tenants. | EXCERPTS ON THIS PAGE:
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