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GENERAL GROWTH PROPERTIES, INC.

Table of Contents

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(MARK ONE)    

ý

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013

or

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                  to                                 

COMMISSION FILE NUMBER 1-34948

GENERAL GROWTH PROPERTIES, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  27-2963337
(I.R.S. Employer
Identification Number)

110 N. Wacker Dr., Chicago, IL
(Address of principal executive offices)

 

60606
(Zip Code)

(312) 960-5000
(Registrant's telephone number, including area code)

         Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class:   Name of Each Exchange on Which Registered:
Common Stock, $.01 par value   New York Stock Exchange

         Securities Registered Pursuant to Section 12(g) of the Act: 6.375% Series A Cumulative Redeemable Preferred Stock

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý    No o

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o    No ý

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "accelerated filer", "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filerý   Accelerated filer o   Non-accelerated filer o
(Do not check if a
smaller reporting company)
  Smaller reporting company o

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o    No ý

         Indicate by check mark whether the registrant has filed all reports required to be filed by section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes ý    No o

         On June 30, 2013, the last business day of the most recently completed second quarter of the registrant, the aggregate market value of the shares of common stock held by non-affiliates of the registrant was $11.2 billion based upon the closing price of the common stock on such date.

         As of February 18, 2014, there were 883,679,074 shares of the registrant's common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the proxy statement for the annual stockholders meeting to be held on May 16, 2014 are incorporated by reference into Part III.

   


Table of Contents


GENERAL GROWTH PROPERTIES, INC.
Annual Report on Form 10-K
December 31, 2013

TABLE OF CONTENTS

Item No.
   
  Page
Number
 

 

Part I

       

1.

 

Business

   
1
 

1A.

 

Risk Factors

    6  

1B.

 

Unresolved Staff Comments

    15  

2.

 

Properties

    15  

3.

 

Legal Proceedings

    23  

4.

 

Mine Safety Disclosures

    24  

 

Part II

   
 
 

5.

 

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

   
25
 

6.

 

Selected Financial Data

    27  

7.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

    29  

7A.

 

Quantitative and Qualitative Disclosures About Market Risk

    50  

8.

 

Financial Statements and Supplementary Data

    50  

9.

 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

    50  

9A.

 

Controls and Procedures

    50  

9B.

 

Other Information

    54  

 

Part III

   
 
 

10.

 

Directors, Executive Officers and Corporate Governance

   
54
 

11.

 

Executive Compensation

    54  

12.

 

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

    54  

13.

 

Certain Relationships and Related Transactions, and Director Independence

    55  

14.

 

Principal Accountant Fees and Services

    55  

 

Part IV

   
 
 

15.

 

Exhibits: Financial Statement Schedules

   
55
 


Signatures


 

 

56

 


Consolidated Financial Statements


 

 

F-1

 


Consolidated Financial Statement Schedule


 

 

F-55

 


Exhibit Index


 

 

S-1

 

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PART I

ITEM 1.    BUSINESS

        The following discussion should be read in conjunction with the Consolidated Financial Statements of General Growth Properties, Inc. ("GGP" or the "Company") and related notes, as included in this Annual Report on Form 10-K (this "Annual Report"). The terms "we," "us" and "our" may also be used to refer to GGP and its subsidiaries. GGP, a Delaware corporation, was organized in July 2010 and is a self-administered and self-managed real estate investment trust, referred to as a "REIT".


Our Company and Strategy

        Our primary business is to be an owner and operator of best-in-class retail properties that provide an outstanding environment and experience for our communities, retailers, employees, consumers and shareholders. Our properties are predominantly located in the United States. As of December 31, 2013, we are the owner, either entirely or with joint venture partners, of 120 regional malls comprising approximately 125 million square feet of GLA. In addition to regional malls, as of December 31, 2013, we owned 13 strip/other retail properties totaling approximately five million square feet of GLA, as well as six stand-alone office buildings totaling approximately 700 thousand square feet of GLA.

        Our portfolio generated tenant sales of $564 per square foot during 2013, including 73 Class A malls reporting average tenant sales of $655 per square foot and contributing approximately 70% of our share of Company net operating income ("Company NOI" as defined in Item 7). The quality of our portfolio is further summarized in the table below which indicates the 73 Class A malls and their contribution to our 2013 share of Company NOI.

Top Regional Malls
  2013 Occupancy   2013 Sales psf   2012 Sales psf   Sales Growth   % of Company NOI  

Top 10 Malls

    97.0 % $ 1,275   $ 1,084     17.7 %   18.6 %

Top 30 Malls

    97.4 %   870     819     6.2 %   37.1 %

Top 50 Malls

    97.2 %   752     726     3.6 %   55.7 %

Top 100 Malls

    96.7 %   595     584     1.9 %   88.9 %

All U.S. Regional Malls

    96.4 %   564     555     1.7 %   96.0 %

73 Class A Malls

    97.1 %   655     637     2.9 %   70.3 %

        Our company's growth is focused on three major areas:

    1)
    increasing permanent occupancy;

    2)
    increasing rental revenues by leasing at higher rents than those expiring; and

    3)
    creating value from our redevelopment projects.

        Since December 31, 2012, our total occupancy has risen, but more importantly the level of long-term, or "permanent" occupancy, has increased from 89.6% as of December 31, 2012 to 92.0% as of December 31, 2013. During this same period, we have seen an expansion of the spread, or variance, between the rent paid on expiring leases and the rent commencing under new leases, on a suite-to-suite basis. On a suite-to-suite basis, the leases commencing occupancy in 2013 exhibited initial rents that were 12.3% higher than the final rents paid on expiring leases compared to 10.2% for those commencing in 2012.

        We may recycle capital by strategically disposing assets and opportunistically investing in high quality retail properties. Controlling operating expenses by leveraging our scale to maximize synergies is a critical component to Company NOI growth.

        We have identified $2.1 billion of income producing redevelopment projects within our portfolio, over 80% of which is being invested into Class A malls. We currently expect to achieve returns of

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approximately 12% on open projects and 8—10% on projects under construction or in our pipeline, which average 9%—11% for all projects (cash on cash first year stabilized) on these projects as they commence operations.

        We believe our long-term strategy can provide our shareholders with a competitive risk-adjusted total return comprised of dividends and share price appreciation.


Transactions

        During 2013, we completed transactions achieving operational goals that promote our long-term strategy as summarized below (figures shown represent our proportionate share):

    sold our investment in Aliansce (Note 6);

    acquired the 41,070,000 Warrants held by Fairholme and the 5,000,000 Warrants held by Blackstone for an aggregate purchase price of approximately $633 million;

    acquired four retail properties for total consideration of $396.3 million, which included cash of $355.0 million and the assumption of debt of $41.3 million. The four retail properties acquired include a 50% interest in a portfolio comprised of two properties in the Union Square area of San Francisco (Note 3);

    acquired the remaining 50% interest in Quail Springs Mall, from our joint venture partner, for total consideration of $90.5 million, including $55.0 million of cash and the assumption of debt of $35.0 million (Note 3);

    sold our interests in six retail properties for total consideration of $142.6 million, which reduced our property level debt by $143.6 million. Additionally, one property, which was previously transferred to a special servicer, was sold in a lender-directed sale in full satisfaction of the debt. This resulted in a gain on extinguishment of debt of $25.9 million and a reduction of property level debt of $96.9 million;

    reinvested in our portfolio by acquiring 28,345,108 shares of our common stock for $566.9 million (Note 12); and

    invested $625.3 million to date on $2.1 billion of identified redevelopment projects.


Segments

        We operate in a single reportable segment which includes the operation, development and management of retail and other rental properties, primarily regional malls. Our portfolio is targeted to a range of market sizes and consumer tastes. Each of our operating properties is considered a separate operating segment, as each property earns revenues and incurs expenses, individual operating results are reviewed and discrete financial information is available. We do not distinguish or group our consolidated operations based on geography, size or type. Our operating properties have similar economic characteristics and provide similar products and services to our tenants. Further, all material operations are within the United States and no customer or tenant comprises more than 10% of consolidated revenues. As a result, the Company's operating properties are aggregated into a single reportable segment.

        For the year ended December 31, 2013, our largest tenant, Limited Brands, Inc., (based on common parent ownership) accounted for approximately 3% of rents. Four tenants, in aggregate, Limited Brands, Inc., The Gap, Inc., Foot Locker, Inc., and Abercrombie & Fitch Stores, Inc., comprised approximately 10% of rents for 2013.

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Competition

        In order to maintain and increase our competitive position within a marketplace we:

    strategically arrange the physical location of the tenants within each property to enforce a merchandising strategy that promotes cross-shopping and maximizes sales;

    introduce new concepts to the property which may include restaurants, theaters, and first-to-market retailers;

    invest capital to provide the right environment for our tenants and consumers, including aesthetic, technological, and infrastructure improvements; and

    ensure our properties are clean and secure.

        We believe the high-quality nature of our properties enables us to compete effectively for retailers and consumers.


Environmental Matters

        Under various Federal, state or local laws, ordinances, regulations, an owner of real estate may be liable for the costs of remediation of certain hazardous or toxic substances on such real estate. These laws may impose liability without regard to whether the owner knew of the presence of such hazardous or toxic substances. The costs of remediation may be substantial and may adversely affect the owner's ability to sell or borrow against such real estate as collateral. In connection with the ownership and operation of our properties, we, or the relevant joint venture through which the property is owned, may be liable for such costs.

        Substantially all of our properties have been subject to a Phase I environmental site assessment, which is intended to evaluate the environmental condition of the subject property and its surroundings. Phase I environmental assessments typically include a historical review, a public records review, a site visit and interviews, but do not include sampling or subsurface investigations.

        As of December 31, 2013, the Phase I environmental site assessments have not revealed any environmental conditions that would have a material adverse effect on our overall business, financial condition or results of operations. However, it is possible that these assessments do not reveal all potential environmental liabilities or that conditions have changed since the assessment was prepared (typically, at the time the property was purchased or developed).

        See Risk Factors regarding additional discussion of environmental matters.


Other Policies

        The following is a discussion of our investment policies, financing policies, conflict of interest policies and policies with respect to certain other activities. One or more of these policies may be amended or rescinded from time to time without a stockholder vote.

Investment Policies

        The Company elected to be treated as a REIT commencing with the taxable year beginning July 1, 2010, its date of incorporation. REIT limitations restrict us from making investments that would cause our real estate assets to be less than 75% of our total assets. In addition, at least 75% of our gross income must be derived directly or indirectly from investments relating to real property or mortgages on real property, including "rents from real property," dividends from other REITs and, in certain circumstances, interest from certain types of temporary investments. At least 95% of our income must be derived from such real property investments, and from dividends, interest and gains from the sale or dispositions of stock or securities or from other combinations of the foregoing.

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        Subject to REIT limitations, we may invest in the securities of other issuers in connection with acquisitions of indirect interests in real estate. Such an investment would normally be in the form of a general or limited partnership or membership interests in special purpose partnerships and limited liability companies that own one or more properties. We may, in the future, acquire all or substantially all of the securities or assets of other REITs, management companies or similar entities where such investments would be consistent with our investment policies.

Financing Policies

        We do not have a policy limiting the number or amount of mortgages that may be placed on any particular property. We generally seek to finance individual properties on a secured basis. However, mortgage financing instruments usually limit additional indebtedness on those properties. Typically, we invest in or form separate legal entities to assist us in obtaining permanent financing at attractive terms. Permanent financing may be structured as a mortgage loan on a single property, or on a group of properties, and generally requires us to provide a mortgage interest on the property in favor of an institutional third party or as a securitized financing. These legal entities are structured so that they would not necessarily be consolidated in the event we became subject to a bankruptcy proceeding or liquidation. We decide upon the structure of the financing based upon the best terms available to us and whether the proposed financing is consistent with our other business objectives. We include the outstanding securitized debt of legal entities owning consolidated properties as part of our consolidated indebtedness.

        We are party to a revolving credit facility that requires us to satisfy certain affirmative and negative covenants and to meet financial ratios and tests, which may include ratios and tests based on leverage, interest coverage and net worth.

        If our Board of Directors determines to seek additional capital, we may raise that capital through additional public equity or preferred equity offerings, public debt offerings, debt financing, retention of cash flows, by creating joint ventures with existing ownership interests in properties or a combination of these methods. Our ability to retain cash flow is limited by the requirement for REITs to pay tax on or distribute 100% of their taxable capital gains income and distribute at least 90% of their taxable income.

        If our Board of Directors determines to raise additional equity capital, it may, without stockholder approval, issue additional shares of common stock or other capital stock. The Board of Directors may issue a number of shares up to the amount of our authorized capital in any manner and on such terms and for such consideration as it deems appropriate. Such securities may be senior to the outstanding classes of common stock. Such securities also may include additional classes of preferred stock, which may be convertible into common stock. Any such offering could dilute a stockholder's investment in us. Brookfield (as defined in Note 1) has preemptive rights to purchase our common stock as necessary to allow it to maintain its respective proportional ownership interest in GGP on a fully diluted basis.

        We implemented a dividend reinvestment plan ("DRIP"). We may determine to pay dividends in a combination of cash and shares of common stock.

Conflict of Interest Policies

        We maintain policies and have entered into agreements designed to reduce or eliminate potential conflicts of interest. We have adopted governance principles governing our affairs and the Board of Directors, as well as written charters for each of the standing committees of the Board of Directors. In addition, we have a Code of Business Conduct and Ethics, which was updated in 2013, and applies to all of our officers, directors, and employees. At least a majority of the members of our Board of Directors must qualify as independent under the listing standards for NYSE companies. Any

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transaction between us and any director, officer or 5% stockholder must be approved pursuant to our Related Party Transaction Policy, including such transactions with Brookfield, our largest stockholder.

Policies With Respect To Certain Other Activities

        We intend to make investments which are consistent with our qualification as a REIT, unless the Board of Directors determines that it is no longer in our best interests to qualify as a REIT. We have authority to offer shares of our common stock or other securities in exchange for property. We also have authority to repurchase or otherwise reacquire our shares or any other securities. We may issue shares of our common stock, or cash at our option, to holders of units of limited partnership interest in the Operating Partnership in future periods upon exercise of such holders' rights under the Operating Partnership agreement. Our policy prohibits us from making any loans to our directors or executive officers for any purpose. We may make loans to the joint ventures in which we participate.


Bankruptcy and Reorganization

        In April 2009, GGP, Inc. and certain subsidiaries filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the bankruptcy court of the Southern District of New York (the "Bankruptcy Court"). On October 21, 2010, the Bankruptcy Court entered an order confirming GGP, Inc.'s plan of reorganization (the "Plan"). Pursuant to the Plan, prepetition creditor claims were satisfied in full and equity holders received newly issued common stock in GGP and in Howard Hughes Corporation ("HHC"). After that distribution, HHC became a publicly-held company. GGP has no remaining interest in HHC as of the Effective Date (as defined in Note 1).


Employees

        As of January 24, 2014, we had approximately 1,500 employees.


Insurance

        We have comprehensive liability, property and rental loss insurance with respect to our portfolio of properties. We believe that such insurance provides adequate coverage.


Qualification as a REIT and Taxability of Distributions

        The Company elected to be taxed as a REIT commencing with the taxable year beginning July 2010, its date of incorporation, and the Company intends to maintain REIT status, and therefore our operations will not be subject to Federal tax on real estate investment trust taxable income. A schedule detailing the taxability of dividends for 2013, 2012 and 2011 has been presented in Note 11.


Available Information

        Our Internet website address is www.ggp.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Interactive Data Files, Current Reports on Form 8-K and amendments to those reports are available and may be accessed free of charge through the Investment section of our Internet website under the Financial Information subsection, as soon as reasonably practicable after those documents are filed with, or furnished to, the SEC. Our Internet website and included or linked information on the website are not intended to be incorporated into this Annual Report. Additionally, the public may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, DC 20549, and may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be accessed at http://www.sec.gov.

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ITEM 1A.    RISK FACTORS

Business Risks

Regional and local economic conditions may adversely affect our business

        Our real property investments are influenced by the regional and local economy, which may be negatively impacted by increased unemployment, increased federal income and payroll taxes, increased state and local taxes, increased real estate taxes, industry slowdowns, lack of availability of consumer credit, increased levels of consumer debt, poor housing market conditions, adverse weather conditions, natural disasters, plant closings, and other factors. Similarly, local real estate conditions, such as an oversupply of, or a reduction in demand for, retail space or retail goods, and the supply and creditworthiness of current and prospective tenants may negatively impact our properties.

Economic conditions, especially in the retail sector, may have an adverse effect on our revenues and available cash

        Unemployment, increased federal income and payroll taxes, increased state and local real estate taxes, health care costs, weak income growth, limited credit availability, and the need to pay down existing obligations may negatively impact consumer spending. Given these economic conditions, we believe there is a risk that the sales at stores operating in our properties may be adversely affected, which may cause tenants to be unable to pay their rental obligations. Because substantially all of our income is derived from rentals of real property, our income and available cash would be adversely affected if a significant number of tenants are unable to meet their obligations.

We may be unable to lease or re-lease space in our properties on favorable terms or at all

        Our results of operations depend on our ability to continue to lease space in our properties, including vacant space and re-leasing space in properties where leases are expiring, optimizing our tenant mix or leasing properties on economically favorable terms. Because approximately ten to eleven percent of our total leases expire annually, we are continually focused on leasing our properties. Similarly, we are pursuing a strategy of replacing expiring short-term leases with long-term leases.

The bankruptcy or store closures of national tenants, which are tenants with chains of stores in many of our properties, may adversely affect our revenues

        Our leases generally contain provisions designed to ensure the creditworthiness of the tenant. However, companies in the retail industry, including some of our tenants, have declared bankruptcy, or from time to time, have voluntarily closed certain of their stores. We may be unable to re-lease such space or to re-lease it on comparable or more favorable terms, as such tenants help attract other tenants to the property. As a result, the bankruptcy or closure of a national tenant may adversely affect our revenues. In addition, such closings may allow other tenants to modify their leases to terms that are less favorable for us, also adversely impacting our revenues.

Certain co-tenancy provisions in our lease agreements may result in reduced rent payments, which may adversely affect our operations and occupancy

        Certain of our lease agreements include a co-tenancy provision which allows the tenant to pay a reduced rent amount and, in certain instances, terminate the lease, if we fail to maintain certain occupancy levels. Therefore, if occupancy or tenancy falls below certain thresholds, rents we are entitled to receive from our retail tenants could be reduced.

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It may be difficult to sell real estate quickly, and transfer restrictions apply to some of our properties

        Real estate investments are relatively illiquid, which may limit our ability to strategically change our portfolio promptly in response to changes in economic or other conditions. If revenues from a property declines while the related expenses do not decline, our income and cash available to us would be adversely affected. If it becomes necessary or desirable for us to dispose of one or more of our mortgaged properties, we might not be able to obtain a release of the lien on the mortgaged property without payment of the associated debt. The foreclosure of a mortgage on a property or inability to sell a property could adversely affect the level of cash available to us.

Our business is dependent on perceptions by retailers and shoppers of the convenience and attractiveness of our retail properties, and our inability to maintain a positive perception may adversely affect our revenues

        We are dependent on perceptions by retailers or shoppers of the safety, convenience and attractiveness of our retail properties. If retailers and shoppers perceive competing retail properties and other retailing options such as the internet to be more convenient or of a higher quality, our revenues may be adversely affected.

We develop and expand properties, and this activity is subject to risks due to economic factors

        Capital investment to expand or develop our properties is anticipated to be an ongoing part of our strategy. In connection with such projects, we will be subject to various risks, which may result in lower than expected returns or a loss. These risks include the following:

    we may not have sufficient capital to proceed with planned expansion or development activities;

    construction costs of a project may exceed original estimates;

    we may not be able to obtain zoning, occupancy or other required governmental permits and authorizations;

    income at completed projects may not meet projections; and

    we may not be able to obtain anchor store, mortgage lender and property partner approvals, if applicable, for expansion or development activities.

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Acquisitions may not be successful

        Newly acquired properties may not perform as expected, such as not realizing expected occupancy and rental rates. In addition, we may have unexpected costs and may be unable to finance or refinance the new properties at acceptable terms. If an acquisition is not successful, we may have a loss on our investment in the property.

We are in a competitive business

        There are numerous retail formats that compete with our properties in attracting retailers to lease space. In addition, retailers at our properties face continued competition from retailers at other regional malls, lifestyle and power centers, outlet malls and other discount shopping centers, discount shopping clubs, through internet sales, catalog companies, and telemarketing. Competition of these types could adversely affect our revenues and cash flows.

        We compete with other major real estate investors with significant capital for attractive investment opportunities. These competitors include REITs, investment banking firms and private institutional investors.

        Our ability to realize our strategies and capitalize on our competitive strengths are dependent on our ability to effectively operate a large portfolio of high quality properties, maintain good relationships with our tenants and consumers, and remain well-capitalized. Our failure to do any of the foregoing could affect our ability to compete effectively in the markets in which we operate.

Some of our properties are subject to potential natural or other disasters

        A number of our properties are located in areas which are subject to natural or other disasters, including hurricanes and earthquakes. Furthermore, many of our properties are located in coastal regions, and would therefore be affected by any future increases in sea levels. For example, certain of our properties are located in California and Hawaii or in other areas with a higher risk of natural disasters such as earthquakes or tsunamis.

Possible terrorist activity or other acts of violence and threats to public safety could adversely affect our financial condition and results of operations

        Terrorist attacks in the United States or other acts of violence may result in declining economic activity, which could harm the demand for goods and services offered by our tenants and the value of our properties and might adversely affect the value of an investment in our securities. Such a resulting decrease in retail demand could make it difficult for us to renew or re-lease our properties.

        Terrorist activities or violence also could directly affect the value of our properties through damage, destruction or loss, and the availability of insurance for such acts, or of insurance generally, might be reduced or cost more, which could increase our operating expenses and adversely affect our financial condition and results of operations. To the extent that our tenants are affected by such attacks, their businesses similarly could be adversely affected, including their ability to continue to meet obligations under their existing leases. These acts might erode business and consumer confidence and spending and might result in increased volatility in national and international financial markets and economies. Any one of these events might decrease demand for real estate, decrease or delay the occupancy of our new or redeveloped properties, and limit our access to capital or increase our cost of raising capital.

We may incur costs to comply with environmental laws

        Under various Federal, state or local laws, ordinances and regulations, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property, and may be held liable to third parties for bodily injury or property damage (investigation and/or clean-up costs) incurred by the parties in connection with the contamination. These laws often impose liability without regard to whether the owner or operator knew of the release

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of the hazardous or toxic substances. The presence of contamination or the failure to remediate contamination may adversely affect the owner's ability to sell, lease or borrow with respect to the real estate. Other Federal, state and local laws, ordinances and regulations require abatement or removal of asbestos-containing materials in the event of demolition or certain renovations or remodeling, the cost of which may be substantial for certain redevelopments, and also govern emissions of and exposure to asbestos fibers in the air. Federal and state laws also regulate the operation and removal of underground storage tanks. In connection with the ownership, operation and management of certain properties, we could be held liable for the costs of remedial action with respect to these regulated substances or tanks or related claims.

        Our properties have been subjected to varying degrees of environmental assessment at various times. However, the identification of new areas of contamination, a change in the extent or known scope of contamination or changes in cleanup requirements could result in significant costs to us.

Some potential losses are not insured

        We carry comprehensive liability, fire, flood, earthquake, terrorism, extended coverage and rental loss and environmental insurance on all of our properties. We believe the policy specifications and insured limits of these policies are adequate and appropriate. There are, however, some types of losses, including lease and other contract claims, and certain environmental conditions not discovered within the applicable policy period, which generally are not insured. If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property. If this happens, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property.

Inflation or deflation may adversely affect our financial condition and results of operations

        Should the general price level increase in the future, this may have an impact on our consumers' disposable income. This may place pressure on retailer sales and margins as their costs rise and they may be unable to pass the costs along to the consumer, which in turn may affect their ability to pay rents and which could adversely impact our cash flow. Many but not all of our leases have fixed amounts for recoveries and if our costs rise we may not be able to pass these costs on to our tenants. Rising costs may also impact our ability to generate cash flows.

        Inflation also poses a risk to us due to the possibility of future increases in interest rates. Such increases would result in higher interest rates on new fixed-rate debt and adversely impact us due to our outstanding variable rate debt. From time to time, we manage our exposure to interest rate fluctuations related to a portion of our variable-rate debt using interest rate cap, swap and treasury lock agreements. Such agreements allow us to replace variable-rate debt with fixed-rate debt. However, our efforts to manage risks associated with interest rate volatility may not be successful. Additionally, interest rate cap, swap and treasury-lock agreements expose us to additional risks, including that the counterparties to the agreements might not perform their obligations. We also might be subject to additional costs, such as transaction fees or breakage costs, if we terminate these agreements.

        Deflation may have an impact on our ability to repay our debt. Deflation may delay consumption and thus weaken tenant sales, which may reduce our tenants' ability to pay rents. Deflationary pressure on retailers may diminish their ability to rent our space and decrease our ability to release the space on favorable terms to us.


Organizational Risks

We are a holding company with no operations of our own and will depend on our subsidiaries for cash

        Our operations are conducted almost entirely through our subsidiaries. Our ability to make dividends or distributions in connection with being a REIT is highly dependent on the earnings of and the receipt of funds from our subsidiaries through dividends or distributions, and our ability to generate cash to meet our debt service obligations is further limited by our subsidiaries' ability to make such

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dividends, distributions or intercompany loans. Our subsidiaries' ability to pay any dividends or distributions to us are limited by their obligations to satisfy their own obligations to their creditors and preferred stockholders before making any dividends or distributions to us.

        Delaware law imposes requirements that could further restrict our ability to pay dividends to holders of our common stock.

We share control of some of our properties with other investors and may have conflicts of interest with those investors

        For the Unconsolidated Properties (as defined in Note 1), we are required to make decisions with the other investors who have interests in the relevant property or properties. For example, the approval of certain of the other investors is required with respect to operating budgets and refinancing, encumbering, expanding or selling any of these properties, to make distributions, as well as to bankruptcy decisions related to the Unconsolidated Properties and related joint ventures. We might not have the same interests as the other investors in relation to these transactions. Accordingly, we might not be able to favorably resolve any of these issues, or we might have to provide financial or other inducements to the other investors to obtain a favorable resolution.

        In addition, various restrictive provisions and rights apply to sales or transfers of interests in our jointly owned properties. As such, we might be required to make decisions about buying or selling interests in a property or properties at a time that is not desirable.

Bankruptcy of our joint venture partners could impose delays and costs on us with respect to the jointly owned retail properties

        The bankruptcy of one of the other investors in any of our jointly owned shopping malls could materially and adversely affect the relevant property or properties. Pursuant to the Bankruptcy Code, we would be precluded from taking some actions affecting the estate of the other investor without prior court approval which would, in most cases, entail prior notice to other parties and a hearing. At a minimum, the requirement to obtain court approval may delay the actions we would or might want to take. If the relevant joint venture through which we have invested in a property has incurred recourse obligations, the discharge in bankruptcy of one of the other investors might result in our ultimate liability for a greater portion of those obligations than would otherwise be required.

We are impacted by tax-related obligations to some of our partners

        We own certain properties through partnerships which have arrangements in place that protect the deferred tax situation of our existing third party limited partners. Violation of these arrangements could impose costs on us. As a result, we may be restricted with respect to decisions such as financing, encumbering, expanding or selling these properties.

        Several of our joint venture partners are tax-exempt. As such, they are taxable to the extent of their share of unrelated business taxable income generated from these jointly owned properties. As the manager of these joint ventures, we have obligations to avoid the creation of unrelated business taxable income at these properties. As a result, we may be restricted with respect to decisions related to the financing of and revenue generation from these properties.

We may not be able to maintain our status as a REIT

        We have elected to be treated as a REIT in connection with the filing of our tax return for 2010, retroactive to July 1, 2010. It is possible that we may not meet the conditions for continued qualification as a REIT and that the cost of maintaining REIT status might have a material impact on the Company. In addition, once an entity is qualified as a REIT, the Internal Revenue Code (the "Code") generally requires that such entity distribute at least 90% of its taxable ordinary income to shareholders and pay tax on or distribute 100% of its taxable capital gains. We expect to distribute 100% of our taxable capital gains and taxable ordinary income to shareholders annually. For 2010, we

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made 90% of this distribution in common stock and 10% in cash. For 2011, we made this distribution in the form of quarterly $0.10 per share cash payments and the special dividend of the common stock of Rouse Properties, Inc. There can be no assurances as to the allocation between cash and common stock of our future dividends.

        If, with respect to any taxable year, we fail to maintain our qualification as a REIT, we would not be allowed to deduct distributions to shareholders in computing our taxable income and Federal income tax. If any of our REIT subsidiaries fail to qualify as a REIT, such failure could result in our loss of REIT status. If we lose our REIT status, corporate level income tax, including any applicable alternative minimum tax, would apply to our taxable income at regular corporate rates. As a result, the amount available for distribution to holders of equity securities that would otherwise receive dividends would be reduced for the year or years involved, and we would no longer be required to make distributions. In addition, unless we were entitled to relief under the relevant statutory provisions, we would be disqualified from treatment as a REIT for four subsequent taxable years.

        We believe that we are a domestically controlled qualified investment entity as defined by the Code. However, because our shares are publicly traded, no assurance can be given that the Company is or will continue to be a domestically controlled qualified investment entity.

An ownership limit, certain anti-takeover defenses and applicable law may hinder any attempt to acquire us

        Our amended and restated certificate of incorporation and amended and restated bylaws contain the following limitations.

        The ownership limit.    Generally, for us to qualify as a REIT under the Code for a taxable year, not more than 50% in value of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer "individuals" at any time during the last half of such taxable year. Our charter provides that no one individual may own more than 9.9% of the outstanding shares of capital stock unless our board of directors provides a waiver from the ownership restrictions. As of February 18, 2014, Brookfield's potential ownership of the Company (assuming full share settlement of the Warrants), including (i) the effect of shares issuable upon exercise of the Warrants owned by Brookfield or managed by Brookfield on behalf of third parties and (ii) shares managed by Brookfield on behalf of third parties, is 40.9%, which is stated in their Form 13D filed on the same date. The Code defines "individuals" for purposes of the requirement described above to include some types of entities. However, our certificate of incorporation also permits us to exempt a person from the ownership limit described therein upon the satisfaction of certain conditions which are described in our certificate of incorporation.

        Selected provisions of our charter documents.    Our charter authorizes the board of directors:

    to cause us to issue additional authorized but unissued shares of common stock or preferred stock;

    to classify or reclassify, in one or more series, any unissued preferred stock; and

    to set the preferences, rights and other terms of any classified or reclassified stock that we issue.

        Selected provisions of our bylaws.    Our amended and restated bylaws contain the following limitations:

    the inability of stockholders to act by written consent;

    restrictions on the ability of stockholders to call a special meeting without 15% or more of the voting power of the issued and outstanding shares entitled to vote generally in the election of directors; and

    rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings.

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        Selected provisions of Delaware law.    We are a Delaware corporation, and Section 203 of the Delaware General Corporation Law applies to us. In general, Section 203 prevents an "interested stockholder" (as defined below), from engaging in a "business combination" (as defined in the statute) with us for three years following the date that person becomes an interested stockholder unless one or more of the following occurs:

    before that person became an interested stockholder, our board of directors approved the transaction in which the interested stockholder became an interested stockholder or approved the business combination;

    upon completion of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) stock held by directors who are also officers of our company and by employee stock plans that do not provide employees with the right to determine confidentially whether shares held under the plan will be tendered in a tender or exchange offer; and

    following the transaction in which that person became an interested stockholder, the business combination is approved by our board of directors and authorized at a meeting of stockholders by the affirmative vote of the holders of at least two-thirds of our outstanding voting stock not owned by the interested stockholder.

        The statute defines "interested stockholder" as any person that is the owner of 15% or more of our outstanding voting stock or is an affiliate or associate of us and was the owner of 15% or more of our outstanding voting stock at any time within the three-year period immediately before the date of determination.

        Each item discussed above may delay, deter or prevent a change in control of our company, even if a proposed transaction is at a premium over the then current market price for our common stock. Further, these provisions may apply in instances where some stockholders consider a transaction beneficial to them. As a result, our stock price may be negatively affected by these provisions.

There is a risk of investor influence over our company that may be adverse to our best interests and those of our other shareholders

        Brookfield owns, or manages on behalf of third parties, a significant portion of the shares of our common stock (excluding shares issuable upon the exercise of Warrants) as of December 31, 2013. The effect of the exercise of the Warrants by Brookfield or the election to receive future dividends in the form of common stock, would further increase their ownership. Due to the Warrants, Brookfield's potential ownership amount will continue to change due to payments of dividends and changes in our stock price.

        Brookfield has entered into standstill agreements to limit their influence, the concentration of ownership of our outstanding equity held or managed by Brookfield may make some transactions more difficult or impossible without their support, or more likely with their support. The interests of Brookfield, any other substantial stockholder or any of their respective affiliates could conflict with or differ from our interests or the interests of the holders of our common stock. For example, the concentration of ownership held or managed by Brookfield could delay, defer or prevent a change of control of our company or impede a merger, takeover or other business combination that may otherwise be favorable for us and the other stockholders. Brookfield may also pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. We cannot assure you that the standstill agreements can fully protect against these risks.

        Brookfield has the right to designate three directors of our Board of Directors as it owns 20% or greater of our outstanding shares as stated under the Investment Agreements (defined in Note 1). As

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long as Brookfield owns directly or indirectly, a substantial portion of our outstanding shares, subject to the terms of the standstill agreements, it would be able to exert significant influence over us, including:

    the composition of our board of directors;

    direction and policies, including the appointment and removal of officers;

    the determination of incentive compensation, which may affect our ability to retain key employees;

    any determinations with respect to mergers or other business combinations;

    our acquisition or disposition of assets;

    our financing decisions and our capital raising activities;

    the payment of dividends;

    conduct in regulatory and legal proceedings; and

    amendments to our certificate of incorporation.

Some of our directors are involved in other businesses including, without limitation, real estate activities and public and/or private investments and, therefore, may have competing or conflicting interests with us and our board of directors has adopted resolutions renouncing any interest or expectation in any such business opportunities. In addition, our relationship agreement with Brookfield Asset Management Inc. contains significant exclusions from Brookfield's obligation to present opportunities to us

        Certain of our directors have and may in the future have interests in other real estate business activities, and may have control or influence over these activities or may serve as investment advisors, directors or officers. These interests and activities, and any duties to third parties arising from such interests and activities, could divert the attention of such directors from our operations. Additionally, certain of our directors are engaged in investment and other activities in which they may learn of real estate and other related opportunities in their non-director capacities. Our board of directors has adopted resolutions applicable to our directors that expressly provide, as permitted by Section 122(17) of the DGCL, that our non-employee directors are not obligated to limit their interests or activities in their non-director capacities or to notify us of any opportunities that may arise in connection therewith, even if the opportunities are complementary to or in competition with our businesses. Accordingly, we have, and investors in our common stock should have, no expectation that we will be able to learn of or participate in such opportunities. Additionally, the relationship agreement with Brookfield Asset Management Inc. contains significant exclusions from Brookfield's obligations to present opportunities to us.


Liquidity Risks

Our indebtedness could adversely affect our financial health and operating flexibility

        As of December 31, 2013, we have $19.0 billion aggregate principal amount of indebtedness outstanding at our proportionate share, net of noncontrolling interest, which includes $51.8 million under our revolving credit facility, $3.2 billion of our share of unconsolidated debt, and our Junior Subordinated Notes of $206.2 million. Our indebtedness may have important consequences to us and the value of our common stock, including:

    limiting our ability to borrow significant additional amounts for working capital, capital expenditures, debt service requirements, execution of our business strategy or other purposes;

    limiting our ability to use operating cash flow in other areas of our business or to pay dividends because we must dedicate a portion of these funds to service debt;

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    increasing our vulnerability to general adverse economic and industry conditions, including increases in interest rates, particularly given the portion of our indebtedness which bears interest at variable rates;

    limiting our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in government regulation; and

    giving secured lenders the ability to foreclose on our assets.

Our debt contains restrictions and covenants which may limit our ability to enter into or obtain funding for certain transactions or operate our business

        The terms of certain of our debt will require us to satisfy certain customary affirmative and negative covenants and to meet financial ratios and tests, including ratios and tests based on leverage, interest coverage and net worth, or to satisfy similar tests as a precondition to incurring additional debt. We entered into a revolving credit facility in April 2012 that subjects us to such covenants and restrictions. The revolving credit facility was amended in October 2013, and we may draw up to $1.0 billion under it. In addition, certain of our indebtedness that was reinstated in connection with the Plan discussed in Item 1 contains restrictions. The covenants and other restrictions under our debt agreements affect, among other things, our ability to:

    incur indebtedness;

    create liens on assets;

    sell assets;

    manage our cash flows;

    transfer assets to other subsidiaries;

    make capital expenditures;

    engage in mergers and acquisitions; and

    make distributions to equity holders, including holders of our common stock.

        In addition, our debt contains certain terms which include restrictive operational and financial covenants and restrictions on the distribution of cash flows from properties serving as collateral for the debt. Fees and cash flow restrictions may affect our ability to fund our on-going operations from our operating cash flows and we may be limited in our operating and financial flexibility and, thus, may be limited in our ability to respond to changes in our business or competitive activities.

We may not be able to refinance, extend or repay our Consolidated debt or our portion of indebtedness of our Unconsolidated Real Estate Affiliates

        As of December 31, 2013, our proportionate share of total debt, including the $206.2 million of Junior Subordinated Notes and $51.8 million under our revolving credit facility, aggregated $19.0 billion consisting of our consolidated debt, net of noncontrolling interest, of $15.8 billion combined with our share of the debt of our Unconsolidated Real Estate Affiliates of $3.2 billion. Of our proportionate share of total debt, $1.9 billion is recourse to the Company due to guarantees or other security provisions for the benefit of the note holder. There can be no assurance that we, or the joint venture, will be able to refinance or restructure this debt on acceptable terms or otherwise, or that operations of the properties or contributions by us and/or our partners will be sufficient to repay such loans. If we or the joint venture cannot service this debt, we or the joint venture may have to deed property back to the applicable lenders.

We may not be able to raise capital through financing activities

        Substantially all of our assets are encumbered by property-level indebtedness; therefore, we may be limited in our ability to raise additional capital through property level or other financings. In addition,

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our ability to raise additional capital could be limited to refinancing existing secured mortgages before their maturity date which may result in yield maintenance or other prepayment penalties to the extent that the mortgage is not open for prepayment at par.

We may not be able to sell assets timely and at prices we believe are appropriate due to the illiquid nature of real estate

        Our ability to sell our properties timely and for an attractive price may be limited. Limitations could be caused by the economic climate, which affects the value of our properties, and by the availability of credit, which could increase the cost and difficulty for potential purchasers to acquire financing. These factors may limit our ability to sell these properties at a price that exceeds the cost of our investment.


Risks Related to the Distribution of HHC

We have indemnified HHC for certain tax liabilities

        Pursuant to the Investment Agreements, we have indemnified HHC from and against 93.75% of any and all losses, claims, damages, liabilities and reasonable expenses to which HHC and its subsidiaries become subject, in each case solely to the extent directly attributable to certain taxes related to sales in GGP Inc.'s Master Planned Communities segment prior to March 31, 2010, in an amount up to $303.6 million as reflected in our consolidated financial statements as of December 31, 2013 and $303.8 million as of December 31, 2012. Under certain circumstances, the Company has also agreed to be responsible for interest or penalties attributable to such taxes (Note 17).


FORWARD-LOOKING INFORMATION

        Refer to Item 7.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

        None.

ITEM 2.    PROPERTIES

        Our investments in real estate as of December 31, 2013 consisted of our interests in malls, strip/other retail and stand-alone office properties. We generally own the land underlying the properties; however, at certain of our properties, all or part of the underlying land is owned by a third party that leases the land to us pursuant to a long-term ground lease. We manage substantially all of our Consolidated Properties (defined in Note 1) and provide management, leasing, and other services to a majority of our Unconsolidated Properties. Information regarding encumbrances on our properties is included here and on Schedule III of this Annual Report.

        Mall and freestanding GLA includes in-line mall shop and outparcel retail locations (locations that are not attached to the primary complex of buildings that comprise a mall) and excludes anchors and tenant-owned GLA.

        Anchors have traditionally been a major component of a mall and play an important role in maintaining customer traffic and making the centers in our retail portfolio desirable locations for mall store tenants. Anchors are frequently department stores whose merchandise appeals to a broad range of shoppers. Anchors generally either own their stores, the land under them and adjacent parking areas, or enter into long-term leases at rates that are generally lower than the rents charged to mall store tenants. We also typically enter into long-term reciprocal agreements with anchors that provide for, among other things, mall and anchor operating covenants and anchor expense participation. The malls in our portfolio receive a smaller percentage of their operating income from anchors than from mall stores (other than anchors) that are typically specialty retailers who lease space in the structure including, or attached to, the primary complex of buildings that comprise a shopping center.

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MALLS

        The following sets forth certain information regarding our properties as of December 31, 2013:

Property
Count
  Property Name   Location(1)   GGP
Ownership
  Total GLA   Mall and
Freestanding GLA
  Retail
Percentage
Leased(2)
  Anchors

Consolidated Malls

                               

1

  Ala Moana Center(3)   Honolulu, HI     100 %   2,364,830     958,985     99.3 % Macy's, Neiman Marcus, Nordstrom

2

  Apache Mall(3)   Rochester, MN     100 %   752,919     269,927     98.1 % Herberger's, JCPenney, Macy's, Sears

3

  Augusta Mall(3)   Augusta, GA     100 %   1,102,142     504,919     98.5 % Dillard's, JCPenney, Macy's, Sears

4

  Baybrook Mall   Friendswood (Houston), TX     100 %   1,259,866     442,330     99.9 % Dillard's, JCPenney, Macy's, Sears

5

  Bayside Marketplace(3)   Miami, FL     100 %   218,561     218,561     94.8 %

6

  Beachwood Place   Beachwood, OH     100 %   908,993     344,646     95.7 % Dillard's, Nordstrom, Saks Fifth Avenue

7

  Bellis Fair   Bellingham (Seattle), WA     100 %   774,071     435,761     99.2 % JCPenney, Kohl's, Macy's, Target

8

  Boise Towne Square(3)   Boise, ID     100 %   1,210,839     422,882     98.0 % Dillard's, JCPenney, Macy's, Sears, Kohl's

9

  Brass Mill Center   Waterbury, CT     100 %   1,178,754     443,937     93.9 % Burlington, JCPenney, Macy's, Sears

10

  Coastland Center(3)   Naples, FL     100 %   920,372     329,982     97.4 % Dillard's, JCPenney, Macy's, Sears

11

  Columbia Mall   Columbia, MO     100 %   734,527     313,467     96.1 % Dillard's, JCPenney, Sears, Target

12

  Columbiana Centre   Columbia, SC     100 %   827,719     268,742     98.0 % Belk, Dillard's, JCPenney, Sears

13

  Coral Ridge Mall   Coralville (Iowa City), IA     100 %   1,067,890     526,929     99.3 % Dillard's, JCPenney, Target, Younkers

14

  Coronado Center(3)   Albuquerque, NM     100 %   1,077,955     491,308     99.1 % JCPenney, Kohl's, Macy's, Sears

15

  Crossroads Center   St. Cloud, MN     100 %   890,920     367,478     93.6 % JCPenney, Macy's, Sears, Target

16

  Cumberland Mall   Atlanta, GA     100 %   1,031,269     383,285     98.9 % Costco, Macy's, Sears

17

  Deerbrook Mall   Humble (Houston), TX     100 %   1,208,831     555,291     100.0 % Dillard's, JCPenney, Macy's, Sears

18

  Eastridge Mall WY   Casper, WY     100 %   565,308     275,512     92.2 % JCPenney, Macy's, Sears, Target

19

  Eastridge Mall CA   San Jose, CA     100 %   1,300,339     628,078     99.7 % JCPenney, Macy's, Sears

20

  Fashion Place(3)   Murray, UT     100 %   1,048,284     447,506     98.9 % Dillard's, Nordstrom

21

  Fashion Show   Las Vegas, NV     100 %   1,814,918     681,629     98.0 % Dillard's, Macy's, Macy's Mens, Neiman Marcus, Nordstrom, Saks Fifth Avenue

22

  Four Seasons Town Centre   Greensboro, NC     100 %   1,087,177     445,161     95.8 % Belk, Dillard's, JCPenney

23

  Fox River Mall   Appleton, WI     100 %   1,207,149     612,235     98.5 % JCPenney, Macy's, Sears, Target, Younkers

24

  Glenbrook Square   Fort Wayne, IN     100 %   1,225,194     448,324     95.5 % JCPenney, Macy's, Sears, The Bon Ton

25

  Governor's Square(3)   Tallahassee, FL     100 %   1,022,255     330,650     94.0 % Dillard's, JCPenney, Macy's, Sears

26

  Grand Teton Mall   Idaho Falls, ID     100 %   625,776     208,577     94.2 % Dillard's, JCPenney, Macy's, Sears

27

  Greenwood Mall   Bowling Green, KY     100 %   848,674     419,621     98.3 % Dillard's, JCPenney, Macy's, Sears

28

  Hulen Mall   Ft. Worth, TX     100 %   994,437     397,867     96.1 % Dillard's, Macy's, Sears

29

  Jordan Creek Town Center   West Des Moines, IA     100 %   1,332,361     749,524     99.3 % Dillard's, Younkers

30

  Lakeside Mall   Sterling Heights, MI     100 %   1,506,808     486,090     82.9 % JCPenney, Lord & Taylor, Macy's, Macy's Mens & Home, Sears

31

  Lynnhaven Mall   Virginia Beach, VA     100 %   1,273,214     621,822     95.6 % Dillard's, JCPenney, Macy's

32

  Mall Of Louisiana   Baton Rouge, LA     100 %   1,559,161     609,912     96.9 % Dillard's, Dillard's Men's & Home, JCPenney, Macy's, Sears

33

  Mall St. Matthews   Louisville, KY     100 %   1,019,717     505,582     97.9 % Dillard's, Dillard's Men's & Home, JCPenney

34

  Market Place Shopping Center   Champaign, IL     100 %   941,665     405,919     96.8 % Bergner's, JCPenney, Macy's, Sears

35

  Mayfair   Wauwatosa (Milwaukee), WI     100 %   1,413,224     599,786     98.2 % Boston Store, Macy's

36

  Meadows Mall   Las Vegas, NV     100 %   944,137     307,284     99.3 % Dillard's, JCPenney, Macy's, Sears

37

  Mondawmin Mall   Baltimore, MD     100 %   421,033     355,681     99.7 %  

38

  Newgate Mall(3)   Ogden (Salt Lake City), UT     100 %   682,980     345,187     93.0 % Dillard's, Sears, Burlington

39

  North Point Mall   Alpharetta (Atlanta), GA     100 %   1,333,250     430,249     96.2 % Dillard's, JCPenney, Macy's, Sears, Von Maur

40

  North Star Mall   San Antonio, TX     100 %   1,244,721     549,397     100.0 % Dillard's, JCPenney, Macy's, Saks Fifth Avenue

41

  Northridge Fashion Center   Northridge (Los Angeles), CA     100 %   1,453,957     629,514     99.2 % JCPenney, Macy's, Sears

42

  Northtown Mall(3)   Spokane, WA     100 %   935,249     381,998     90.9 % JCPenney, Kohl's, Macy's, Sears

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Property
Count
  Property Name   Location(1)   GGP
Ownership
  Total GLA   Mall and
Freestanding GLA
  Retail
Percentage
Leased(2)
  Anchors

43

  Oak View Mall   Omaha, NE     100 %   861,228     257,042     95.0 % Dillard's, JCPenney, Sears, Younkers

44

  Oakwood Center   Gretna, LA     100 %   906,514     392,486     93.8 % Dillard's, JCPenney, Sears

45

  Oakwood Mall   Eau Claire, WI     100 %   818,124     403,280     95.0 % JCPenney, Macy's, Sears, Younkers

46

  Oglethorpe Mall   Savannah, GA     100 %   942,726     406,142     96.1 % Belk, JCPenney, Macy's, Sears

47

  Oxmoor Center(3)   Louisville, KY     100 %   923,355     356,145     96.0 % Macy's, Sears, Von Maur

48

  Paramus Park(3)   Paramus, NJ     100 %   764,958     305,901     97.1 % Macy's, Sears

49

  Park City Center   Lancaster (Philadelphia), PA     100 %   1,422,161     522,264     96.1 % The Bon Ton, Boscov's, JCPenney, Kohl's, Sears

50

  Park Place   Tucson, AZ     100 %   1,054,850     473,393     98.6 % Dillard's, Macy's, Sears

51

  Peachtree Mall   Columbus, GA     100 %   731,094     295,879     94.6 % Dillard's, JCPenney, Macy's

52

  Pecanland Mall   Monroe, LA     100 %   965,190     349,754     96.1 % Belk, Dillard's, JCPenney, Sears, Burlington

53

  Pembroke Lakes Mall   Pembroke Pines (Fort Lauderdale), FL     100 %   1,127,440     346,165     96.2 % Dillard's, Dillard's Men's & Home, JCPenney, Macy's, Macy's Home Store, Sears

54

  Pioneer Place(3)   Portland, OR     100 %   624,868     337,402     92.2 %  

55

  Prince Kuhio Plaza(3)   Hilo, HI     100 %   498,769     312,349     93.7 % Macy's, Sears

56

  Providence Place   Providence, RI     100 %   1,259,756     745,940     98.7 % JCPenney, Macy's, Nordstrom

57

  Provo Towne Centre(3)(4)   Provo, UT     75 %   791,892     300,172     84.7 % Dillard's, JCPenney, Sears

58

  Quail Springs Mall   Oklahoma City, OK     100 %   1,117,403     451,807     95.1 % Dillard's, JCPenney, Macy's, Von Maur

59

  Red Cliffs Mall   St. George, UT     100 %   439,466     147,131     97.0 % Dillard's, JCPenney, Sears

60

  Ridgedale Center   Minnetonka, MN     100 %   1,018,122     315,742     96.6 % JCPenney, Macy's, Macy's Mens & Home, Sears

61

  River Hills Mall   Mankato, MN     100 %   716,495     352,553     98.5 % Herberger's, JCPenney, Sears, Target

62

  Rivertown Crossings   Grandville (Grand Rapids), MI     100 %   1,266,349     630,248     97.0 % JCPenney, Kohl's, Macy's, Sears, Younkers

63

  Rogue Valley Mall   Medford (Portland), OR     100 %   639,964     282,980     85.5 % JCPenney, Kohl's, Macy's, Macy's Home Store

64

  Sooner Mall   Norman, OK     100 %   487,858     220,953     99.7 % Dillard's, JCPenney, Sears

65

  Southwest Plaza   Littleton, CO     100 %   1,390,720     691,271     86.5 % Dillard's, JCPenney, Macy's, Sears

66

  Spokane Valley Mall(3)(4)   Spokane, WA     75 %   865,508     349,897     94.5 % JCPenney, Macy's, Sears

67

  Staten Island Mall   Staten Island, NY     100 %   1,276,491     535,977     96.7 % Macy's, Sears, JCPenney

68

  Stonestown Galleria   San Francisco, CA     100 %   904,187     420,331     99.0 % Macy's, Nordstrom

69

  The Crossroads   Portage (Kalamazoo), MI     100 %   768,718     265,758     98.4 % Burlington, JCPenney, Macy's, Sears

70

  The Gallery At Harborplace   Baltimore, MD     100 %   413,729     130,839     88.4 %  

71

  The Maine Mall(3)   South Portland, ME     100 %   1,004,004     505,498     100.0 % The Bon Ton, JCPenney, Macy's, Sears

72

  The Mall In Columbia   Columbia, MD     100 %   1,371,746     571,578     99.3 % JCPenney, Lord & Taylor, Macy's, Nordstrom, Sears

73

  The Oaks Mall   Gainesville, FL     100 %   901,726     343,859     97.0 % Belk, Dillard's, JCPenney, Macy's, Sears

74

  The Parks At Arlington   Arlington (Dallas), TX     100 %   1,445,746     696,801     98.5 % Dillard's, JCPenney, Macy's, Sears

75

  The Shoppes At Buckland Hills   Manchester, CT     100 %   1,028,989     516,378     97.0 % JCPenney, Macy's, Macy's Mens & Home, Sears

76

  The Shops At Fallen Timbers   Maumee, OH     100 %   585,898     324,396     97.2 % Dillard's, JCPenney

77

  The Shops at La Cantera(4)   San Antonio, TX     75 %   1,290,535     592,760     99.0 % Dillard's, Macy's, Neiman Marcus, Nordstrom

78

  The Streets At Southpoint(4)   Durham, NC     94 %   1,333,435     607,088     99.1 % Hudson Belk, JCPenney, Macy's, Nordstrom, Sears

79

  The Woodlands Mall   Woodlands (Houston), TX     100 %   1,347,865     594,956     99.2 % Dillard's, JCPenney, Macy's, Nordstrom

80

  Town East Mall   Mesquite (Dallas), TX     100 %   1,223,413     414,027     97.7 % Dillard's, JCPenney, Macy's, Sears

81

  Tucson Mall(3)   Tucson, AZ     100 %   1,284,987     616,224     97.5 % Dillard's, JCPenney, Macy's, Sears

82

  Tysons Galleria(3)   McLean (Washington, D.C.), VA     100 %   815,014     303,081     95.8 % Macy's, Neiman Marcus, Saks Fifth Avenue

83

  Valley Plaza Mall   Bakersfield, CA     100 %   1,173,886     516,918     99.3 % JCPenney, Macy's, Sears, Target

84

  Visalia Mall   Visalia, CA     100 %   429,494     172,494     98.7 % JCPenney, Macy's

85

  Westlake Center   Seattle, WA     100 %   78,515     78,515     92.3 %  

86

  Westroads Mall   Omaha, NE     100 %   1,066,546     537,510     95.7 % JCPenney, Von Maur, Younkers

87

  White Marsh Mall   Baltimore, MD     100 %   1,160,437     437,081     94.2 % JCPenney, Macy's, Macy's Home Store, Sears, Boscov's

88

  Willowbrook(3)   Wayne, NJ     100 %   1,521,160     491,100     99.0 % Bloomingdale's, Lord & Taylor, Macy's, Sears

89

  Woodbridge Center   Woodbridge, NJ     100 %   1,667,145     650,471     95.1 % Boscov's, JCPenney, Lord & Taylor, Macy's, Sears
                                 

      Total Consolidated Malls           91,059,922     38,722,071          
                                 
                                 

17


Table of Contents

Property
Count
  Property Name   Location(1)   GGP
Ownership
  Total GLA   Mall and
Freestanding GLA
  Retail
Percentage
Leased(2)
  Anchors

Unconsolidated Malls

                               

90

  Alderwood   Lynnwood (Seattle), WA     50 %   1,283,674     577,776     97.8 % JCPenney, Macy's, Nordstrom, Sears

91

  Altamonte Mall   Altamonte Springs (Orlando), FL     50 %   1,158,152     479,604     95.5 % Dillard's, JCPenney, Macy's, Sears

92

  Bridgewater Commons   Bridgewater, NJ     35 %   992,230     395,555     98.3 % Bloomingdale's, Lord & Taylor, Macy's

93

  Carolina Place   Pineville (Charlotte), NC     50 %   1,159,312     385,810     98.4 % Belk, Dillard's, JCPenney, Macy's, Sears

94

  Christiana Mall   Newark, DE     50 %   1,111,559     470,247     100.0 % JCPenney, Macy's, Nordstrom, Target

95

  Clackamas Town Center   Happy Valley, OR     50 %   1,365,827     590,985     97.0 % JCPenney, Macy's, Macy's Home Store, Nordstrom, Sears

96

  First Colony Mall   Sugar Land, TX     50 %   1,126,839     507,791     97.7 % Dillard's, Dillard's Men's & Home, JCPenney, Macy's

97

  Florence Mall   Florence (Cincinnati, OH), KY     50 %   940,683     388,276     93.3 % JCPenney, Macy's, Macy's Home Store, Sears

98

  Galleria At Tyler(3)   Riverside, CA     50 %   1,013,434     545,226     99.8 % JCPenney, Macy's, Nordstrom

99

  Glendale Galleria(3)   Glendale, CA     50 %   1,325,483     496,972     98.2 % JCPenney, Macy's, Target, Bloomingdale's

100

  Kenwood Towne Centre(3)   Cincinnati, OH     50 %   1,160,294     518,973     98.7 % Dillard's, Macy's, Nordstrom

101

  Mizner Park(3)   Boca Raton, FL     50 %   517,616     177,519     92.0 % Lord & Taylor

102

  Natick Mall   Natick (Boston), MA     50 %   1,687,985     740,335     96.0 % JCPenney, Lord & Taylor, Macy's, Sears, Neiman Marcus, Nordstrom

103

  Neshaminy Mall   Bensalem, PA     50 %   1,017,294     410,305     96.7 % Boscov's, Macy's, Sears

104

  Northbrook Court   Northbrook (Chicago), IL     50 %   1,013,375     477,098     97.8 % Lord & Taylor, Macy's, Neiman Marcus

105

  Oakbrook Center   Oak Brook (Chicago), IL     47 %   2,131,880     818,643     99.1 % Lord & Taylor, Macy's, Neiman Marcus, Nordstrom, Sears

106

  Otay Ranch Town Center   Chula Vista (San Diego), CA     50 %   635,050     495,050     96.8 % Macy's

107

  Park Meadows   Lone Tree, CO     35 %   1,565,417     742,417     99.2 % Dillard's, JCPenney, Macy's, Nordstrom

108

  Perimeter Mall   Atlanta, GA     50 %   1,557,614     504,340     95.9 % Dillard's, Macy's, Nordstrom, Von Maur

109

  Pinnacle Hills Promenade   Rogers, AR     50 %   1,049,145     360,012     95.7 % Dillard's, JCPenney

110

  Plaza Frontenac   St. Louis, MO     55 %   482,958     222,245     95.6 % Neiman Marcus, Saks Fifth Avenue

111

  Riverchase Galleria   Hoover (Birmingham), AL     50 %   1,572,483     562,338     97.5 % Belk, JCPenney, Macy's, Sears, Von Maur

112

  Saint Louis Galleria   St. Louis, MO     74 %   1,179,296     465,244     96.8 % Dillard's, Macy's, Nordstrom

113

  Stonebriar Centre   Frisco (Dallas), TX     50 %   1,651,117     785,925     99.7 % Dillard's, JCPenney, Macy's, Nordstrom, Sears

114

  The Grand Canal Shoppes   Las Vegas, NV     50 %   758,729     639,572     99.8 % Barneys New York

115

  The Shoppes At River Crossing   Macon, GA     50 %   707,037     373,818     98.5 % Belk, Dillard's

116

  Towson Town Center   Towson, MD     35 %   1,017,430     598,301     97.2 % Macy's, Nordstrom

117

  Village Of Merrick Park(3)   Coral Gables, FL     55 %   814,800     383,537     93.6 % Neiman Marcus, Nordstrom

118

  Water Tower Place   Chicago, IL     47 %   776,541     391,604     97.6 % Macy's

119

  Whaler's Village   Lahaina, HI     50 %   105,840     105,840     100.0 %  

120

  Willowbrook Mall   Houston, TX     50 %   1,399,408     415,036     99.2 % Dillard's, JCPenney, Macy's, Macy's Mens, Sears
                                 

      Total Unconsolidated Malls           34,278,502     15,026,394          
                                 

      Total Malls           125,338,423     53,748,465          
                                 
                                 

18


Table of Contents


STAND ALONE OFFICES, STRIP CENTERS AND OTHER RETAIL

Property
Count
  Property Name   Location(1)   GGP
Ownership
  Total
GLA
  Mall and
Freestanding
GLA
  Retail
Percentage
Leased(2)
  Anchors

1

  10 Columbia Corporate Center   Columbia, MD     100 %   93,863     6,500     91.2 %

2

  20 Columbia Corporate Center   Columbia, MD     100 %   104,793         90.7 %

3

  30 Columbia Corporate Center   Columbia, MD     100 %   143,418     14,165     85.4 %

4

  40 Columbia Corporate Center   Columbia, MD     100 %   136,420         88.8 %

5

  50 Columbia Corporate Center   Columbia, MD     100 %   119,261     7,750     100.0 %

6

  60 Columbia Corporate Center   Columbia, MD     100 %   102,082         95.1 %

7

  Columbia Bank Drive Thru   Columbia, MD     100 %   17,000     17,000     100.0 %

8

  Center Point Plaza(5)   Las Vegas, NV     50 %   144,691     70,299     100.0 %

9

  Fallbrook Center(3)   West Hills (Los Angeles), CA     100 %   875,642         93.0 %

10

  Lake Mead & Buffalo(5)   Las Vegas, NV     50 %   150,948     64,991     95.8 %

11

  Lincolnshire Commons   Lincolnshire (Chicago), IL     100 %   118,565         95.2 %

12

  Lockport Mall   Lockport, NY     100 %   9,114         100.0 %

13

  The Trails Village Center(5)   Las Vegas, NV     50 %   174,644         93.7 %

14

  200 Lafayette   New York, NY     100 %   115,964     32,188     0.0 %

15

  830 N. Michigan Ave.    Chicago, IL     100 %   126,075     126,075     51.5 %

16

  Union Square   San Francisco, CA     50 %   59,243     59,243     99.1 %

17

  Shopping Leblon   Rio de Janeiro, Rio de Janeiro (Brazil)     35 %   247,635     247,635     95.2 %

18

  Owings Mills Mall   Owings Mills, MD     51 %   1,085,042     438,005     41.2 % JCPenney, Macy's

19

  Regency Square Mall(6)   Jacksonville, FL     100 %   1,418,637     539,636     37.9 % Belk, Dillard's, JCPenney, Sears
                                 

      Total Office, Strip & Other Retail           5,243,037     1,623,487          
                                 
                                 

(1)
In certain cases, where a center is located in part of a larger regional metropolitan area, the metropolitan area is identified in parenthesis.

(2)
Represents contractual obligations for space and excludes traditional anchor stores. For stand alone offices, office occupancy is presented.

(3)
A portion of the property is subject to a ground lease.

(4)
Owned in a joint venture with independent, noncontrolling interest.

(5)
Third party managed strip center.

(6)
This asset has been transferred to the special servicer (Note 19).

19


Table of Contents


MORTGAGES, NOTES AND OTHER DEBT

        The following table sets forth certain information regarding the mortgages and other indebtedness encumbering our consolidated properties and our Unconsolidated Real Estate Affiliates, as well as our unsecured corporate debt (Dollars in thousands).

Name
  GGP
Ownership
  Proportionate
Balance(1)
  Maturity
Year(2)
  Balloon
Pmt at
Maturity
  Interest
Rate
  Parent
Recourse
as of
12/31/2013(3)

Fixed Rate

                               

Consolidated Property Level

                               

Bayside Marketplace (Bond)

    100 % $ 1,255     2014   $ 1,255   5.75%   No

Woodbridge Center

    100 %   184,294     2014     181,464   4.24%   No

Boise Towne Plaza

    100 %   9,492     2015     8,917   4.70%   No

Lynnhaven Mall

    100 %   213,875     2015     203,367   5.05%   No

Paramus Park

    100 %   94,467     2015     90,242   4.86%   No

Peachtree Mall

    100 %   80,842     2015     77,085   5.08%   No

Quail Springs Mall

    100 %   68,981     2015     66,864   6.74%   No

Regency Square Mall(4)

    100 %   84,772     2015     75,797   3.59%   No

The Shops at La Cantera

    75 %   120,258     2015     117,345   5.95%   No

Brass Mill Center

    100 %   104,478     2016     93,347   4.55%   No

Coronado Center

    100 %   152,304     2016     135,704   5.08%   No

Glenbrook Square

    100 %   159,595     2016     141,325   4.91%   No

Lakeside Mall

    100 %   159,905     2016     144,451   4.28%   No

Lincolnshire Commons

    100 %   26,469     2016     24,629   5.98%   No

Ridgedale Center

    100 %   159,578     2016     143,281   4.86%   No

The Maine Mall

    100 %   194,394     2016     172,630   4.84%   No

Apache Mall

    100 %   97,851     2017     91,402   4.32%   No

Beachwood Place

    100 %   219,722     2017     190,177   5.60%   No

Eastridge (CA)

    100 %   160,363     2017     143,626   5.79%   Yes—Partial

Four Seasons Town Centre

    100 %   86,433     2017     72,532   5.60%   No

Mall of Louisiana

    100 %   216,848     2017     191,409   5.81%   No

Provo Towne Center(5)

    75 %   30,766     2017     28,886   4.53%   No

Hulen Mall

    100 %   129,657     2018     118,702   4.25%   No

The Gallery at Harborplace—Other

    100 %   9,006     2018     190   6.05%   No

Governor's Square

    100 %   71,353     2019     66,488   6.69%   No

Oak View Mall

    100 %   79,916     2019     74,467   6.69%   No

Park City Center

    100 %   190,317     2019     172,224   5.34%   No

Fashion Place

    100 %   226,730     2020     226,730   3.64%   No

Mall St. Matthews

    100 %   186,662     2020     170,305   2.72%   No

Newgate Mall

    100 %   58,000     2020     58,000   3.69%   No

The Mall In Columbia

    100 %   350,000     2020     316,928   3.95%   No

Town East Mall

    100 %   160,270     2020     160,270   3.57%   No

Tucson Mall

    100 %   246,000     2020     246,000   4.01%   No

Tysons Galleria

    100 %   323,641     2020     282,081   4.06%   No

Visalia Mall

    100 %   74,000     2020     74,000   3.71%   No

Deerbrook Mall

    100 %   148,302     2021     127,934   5.25%   No

Fashion Show—Other

    100 %   4,913     2021     1,577   6.06%   Yes—Full

Fox River Mall

    100 %   180,808     2021     156,373   5.46%   No

Northridge Fashion Center

    100 %   241,431     2021     207,503   5.10%   No

Oxmoor Center

    100 %   91,796     2021     79,217   5.37%   No

Park Place

    100 %   192,764     2021     165,815   5.18%   No

Providence Place

    100 %   368,458     2021     320,526   5.65%   No

Rivertown Crossings

    100 %   163,323     2021     141,356   5.52%   No

Westlake Center—Land

    100 %   2,437     2021     2,437   12.90%   No

White Marsh Mall

    100 %   190,000     2021     190,000   3.66%   No

Ala Moana Center

    100 %   1,400,000     2022     1,400,000   4.23%   No

Bellis Fair

    100 %   91,223     2022     77,060   5.23%   No

Coastland Center

    100 %   127,479     2022     102,621   3.76%   No

Coral Ridge Mall

    100 %   110,155     2022     98,394   5.71%   No

Greenwood Mall

    100 %   63,000     2022     57,469   4.19%   No

North Star Mall

    100 %   332,135     2022     270,113   3.93%   No

Rogue Valley Mall

    100 %   55,000     2022     48,245   4.50%   No

20


Table of Contents

Name
  GGP
Ownership
  Proportionate
Balance(1)
  Maturity
Year(2)
  Balloon
Pmt at
Maturity
  Interest
Rate
  Parent
Recourse
as of
12/31/2013(3)

Spokane Valley Mall(5)

    75 %   46,174     2022     38,484   4.65%   No

The Gallery at Harborplace

    100 %   80,249     2022     68,096   5.24%   No

The Oaks Mall

    100 %   136,504     2022     112,842   4.55%   No

The Shoppes at Buckland Hills

    100 %   126,887     2022     107,820   5.19%   No

The Streets at Southpoint

    94 %   245,440     2022     207,909   4.36%   No

Westroads Mall

    100 %   154,181     2022     127,455   4.55%   No

Augusta Mall

    100 %   170,000     2023     170,000   4.36%   No

Boise Towne Square

    100 %   135,220     2023     106,372   4.79%   No

Crossroads Center (MN)

    100 %   105,941     2023     83,026   3.25%   No

Cumberland Mall

    100 %   160,000     2023     160,000   3.67%   No

Meadows Mall

    100 %   162,936     2023     118,726   3.96%   No

Oglethorpe Mall

    100 %   150,000     2023     136,166   3.90%   No

Pecanland Mall

    100 %   90,000     2023     75,750   3.88%   No

Prince Kuhio Plaza

    100 %   44,695     2023     35,974   4.10%   No

Staten Island Mall

    100 %   262,852     2023     206,942   4.77%   No

Stonestown Galleria

    100 %   180,000     2023     164,720   4.39%   No

The Crossroads (MI)

    100 %   100,000     2023     80,833   4.42%   No

The Woodlands

    100 %   259,727     2023     207,057   5.04%   No

Baybrook Mall

    100 %   250,000     2024     212,423   5.52%   No

Fashion Show

    100 %   835,000     2024     835,000   4.03%   No

Jordan Creek Town Center

    100 %   220,000     2024     177,448   4.37%   No

The Parks At Arlington

    100 %   250,000     2024     212,687   5.57%   No

Pembroke Lakes Mall

    100 %   260,000     2025     260,000   3.56%   No

Valley Plaza Mall

    100 %   240,000     2025     206,847   3.75%   No

Willowbrook Mall

    100 %   360,000     2025     360,000   3.55%   No

North Point Mall

    100 %   250,000     2026     218,205   4.54%   No

Providence Place—Other

    100 %   40,156     2028     2,381   7.75%   No

Provo Towne Center Land

    75 %   2,249     2095     37   10.00%   Yes—Full
                             

Consolidated Property Level

        $ 13,813,929         $ 12,501,960   4.55%    
                             
                             

Unconsolidated Property Level

                               

Alderwood

    50 % $ 123,845     2015   $ 120,409   6.65%   No

Pinnacle Hills Promenade

    50 %   70,000     2015     63,000   5.57%   No

Center Pointe Plaza

    50 %   6,118     2017     5,570   6.31%   No

Riverchase Galleria(6)

    50 %   152,500     2017     152,500   4.50%   No

Saint Louis Galleria

    74 %   158,262     2018     158,262   3.44%   No

Plaza Frontenac

    55 %   28,600     2018     28,600   3.04%   No

First Colony Mall

    50 %   92,500     2019     84,473   4.50%   No

Natick Mall

    50 %   225,000     2019     209,699   4.60%   No

The Grand Canal Shoppes

    50 %   313,125     2019     313,125   4.24%   No

Christiana Mall

    50 %   117,495     2020     108,697   5.10%   No

Kenwood Towne Centre

    70 %   157,716     2020     137,191   5.37%   No

Oakbrook Center

    47 %   201,702     2020     201,702   3.66%   No

Water Tower Place

    47 %   89,621     2020     76,626   4.85%   No

Northbrook Court

    50 %   65,500     2021     56,811   4.25%   No

Village of Merrick Park

    55 %   98,334     2021     85,797   5.73%   No

Whaler's Village

    50 %   40,000     2021     40,000   5.42%   No

Willowbrook Mall (TX)

    50 %   103,428     2021     88,965   5.13%   No

Bridgewater Commons

    35 %   105,000     2022     105,000   3.34%   No

Clackamas Town Center

    50 %   108,000     2022     108,000   4.18%   No

Florence Mall

    50 %   45,000     2022     45,000   4.15%   No

Carolina Place

    50 %   87,500     2023     75,542   3.84%   No

Galleria at Tyler

    50 %   96,869     2023     76,716   5.05%   No

Lake Mead and Buffalo

    50 %   2,237     2023     27   7.20%   No

Park Meadows

    35 %   126,000     2023     112,734   4.60%   No

The Shoppes at River Crossing

    50 %   38,675     2023     35,026   3.75%   No

The Trails Village Center

    50 %   6,242     2023     78   8.21%   No

Union Square Portfolio(7)

    50 %   25,000     2023     25,000   5.12%   No

Stonebriar Centre

    50 %   140,000     2024     120,886   4.05%   No

Altamonte Mall

    50 %   80,000     2025     69,045   3.72%   No

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Name
  GGP
Ownership
  Proportionate
Balance(1)
  Maturity
Year(2)
  Balloon
Pmt at
Maturity
  Interest
Rate
  Parent
Recourse
as of
12/31/2013(3)

Towson Town Center

    35 %   113,761     2025     97,713   3.82%   No
                             

Unconsolidated Property Level

        $ 3,018,030         $ 2,802,194   4.50%    
                             
                             

Total Fixed—Property Level

        $ 16,831,959         $ 15,304,154   4.54%    
                             
                             

Consolidated Corporate

                               

Arizona Two (HHC)

    100 % $ 13,179     2015   $ 573   4.41%   Yes—Full
                             

Consolidated Corporate

        $ 13,179         $ 573   4.41%    
                             
                             

Total Fixed Rate Debt

        $ 16,845,138         $ 15,304,727   4.54%    
                             
                             

Variable Rate

                               

Consolidated Property Level

                               

Columbia Mall

    100 % $ 100,000     2018   $ 100,000   Libor + 175 bps   Yes—Full

Columbiana Centre(8)

    100 %   130,816     2018     128,177   Libor + 250 bps   Yes—Full

Eastridge (WY)(8)

    100 %   48,228     2018     47,255   Libor + 250 bps   Yes—Full

Fallbrook Center(8)

    100 %   100,870     2018     98,835   Libor + 250 bps   Yes—Full

Grand Teton Mall(8)

    100 %   48,859     2018     47,873   Libor + 250 bps   Yes—Full

Mayfair(8)

    100 %   347,813     2018     340,796   Libor + 250 bps   Yes—Full

Market Place Shopping Center

    100 %   113,425     2018     113,425   Libor + 240 bps   None

Mondawmin Mall(8)

    100 %   81,011     2018     79,377   Libor + 250 bps   Yes—Full

North Town Mall(8)

    100 %   89,207     2018     87,407   Libor + 250 bps   Yes—Full

Oakwood(8)

    100 %   76,913     2018     75,362   Libor + 250 bps   Yes—Full

Oakwood Center(8)

    100 %   91,413     2018     89,569   Libor + 250 bps   Yes—Full

Pioneer Place(8)

    100 %   188,185     2018     184,389   Libor + 250 bps   Yes—Full

Red Cliffs Mall(8)

    100 %   30,261     2018     29,650   Libor + 250 bps   Yes—Full

River Hills Mall(8)

    100 %   76,283     2018     74,744   Libor + 250 bps   Yes—Full

Sooner Mall(8)

    100 %   78,931     2018     77,338   Libor + 250 bps   Yes—Full

Southwest Plaza(8)

    100 %   73,383     2018     71,902   Libor + 250 bps   Yes—Full

The Shops at Fallen Timbers(8)

    100 %   25,217     2018     24,709   Libor + 250 bps   Yes—Full
                             

Consolidated Property Level

        $ 1,700,815         $ 1,670,808   2.61%    
                             
                             

Unconsolidated Property Level

                               

Glendale Galleria

    50 % $ 160,000     2017   $ 150,544   Libor + 250 bps   No

Union Square Portfolio(7)

    50 %   16,250     2018     16,250   Libor + 400 bps   No
                             

Unconsolidated Property Level

        $ 176,250         $ 166,794   2.81%    
                             
                             

Consolidated Corporate

                               

Junior Subordinated Notes Due 2041

    100 % $ 206,200     2041   $ 206,200   Libor + 145 bps   Yes—Full
                             

Consolidated Corporate

        $ 206,200         $ 206,200   1.69%    
                             
                             

Total Variable Rate Debt

        $ 2,083,265         $ 2,043,802   2.54%    
                             
                             

Total, at share(9)(10)

        $ 18,928,403         $ 17,348,529   4.32%    
                             
                             

(1)
Proportionate share for Consolidated Properties presented exclusive of non-controlling interests.

(2)
Assumes that all maturity extensions are exercised.

(3)
Total recourse to GGP or its subsidiaries of approximately $1.9 billion.

(4)
This asset has been transferred to the special servicer and has a total debt of $84.8 million (Note 19).

(5)
Loan is cross-collateralized with other properties.

(6)
$45.0 million B-note is subordinate to return of GGP's additional contributed equity.

(7)
Union Square Portfolio represents two retail properties.

(8)
Properties provide mortgage collateral as guarantors for $1.5 billion corporate borrowing and are crossed collateralized.

(9)
Excludes the $1.0 billion corporate revolver. As of December 31, 2013 there was $51.8 million drawn.

(10)
Reflects amortization for the period subsequent to December 31, 2013.

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        Below is a reconciliation of our proportionate share of mortgages, notes and loans payable (from above) to our consolidated mortgages, notes and loans payable per our Consolidated Balance Sheet as of December 31, 2013 (Dollars in thousands).

Total Mortgages, Notes, and Other Payables, from above

  $ 18,928,403  

Noncontrolling interests in consolidated real estate affiliates

    81,026  

Our share of Unconsolidated Real Estate Affiliates

    (3,194,280 )

Market rate adjustments, net

    933  

Junior Subordinated Notes

    (206,200 )

Corporate revolver

    51,800  

Other loans payable

    10,755  
       

Total

  $ 15,672,437  
       
       


Lease Expiration Schedule

        The following table indicates various lease expiration information related to our regional malls owned as of December 31, 2013. The table excludes expirations and rental revenue from temporary tenants and tenants that pay percent-in-lieu rent. See "Note 2—Summary of Significant Accounting Policies" for our accounting policies for revenue recognition from our tenant leases and "Note 10—Rentals Under Operating Leases" for the future minimum rentals of our operating leases for the consolidated properties.

Year
  Number of
Expiring
Leases
  Expiring GLA
at 100%
  Percent of
Total
  Expiring
Rent
  Expiring
Rent ($psf)
 
 
   
  (Dollars in thousands)
   
  (Dollars in thousands)
   
 

Specialty Leasing

    1,116     2,343     4.5 % $ 50,592   $ 22.35  

2014

    1,825     6,041     11.7 %   325,050     56.95  

2015

    1,590     5,193     10.1 %   315,150     62.74  

2016

    1,561     5,204     10.1 %   340,761     66.62  

2017

    1,410     5,108     9.9 %   327,208     65.37  

2018

    1,391     5,213     10.1 %   364,395     71.49  

2019

    824     3,858     7.5 %   268,630     70.29  

2020

    695     3,024     5.9 %   200,766     66.90  

2021

    757     3,008     5.8 %   212,786     71.70  

2022

    867     3,573     6.9 %   255,066     71.95  

Subsequent

    1,425     8,961     17.5 %   576,849     65.88  
                       

Total

    13,461     51,526     100.0 % $ 3,237,253   $ 64.35  
                       
                       

ITEM 3.    LEGAL PROCEEDINGS

        Other than certain cases as described below and in Note 17, neither the Company nor any of the Unconsolidated Real Estate Affiliates is currently involved in any material pending legal proceedings nor, to our knowledge, is any material legal proceeding currently threatened against the Company or any of the Unconsolidated Real Estate Affiliates.


Urban Litigation

        In October 2004, certain limited partners (the "Urban Plaintiffs") of Urban Shopping Centers, L.P. ("Urban") filed a lawsuit against Urban's general partner, Head Acquisition, L.P. ("Head"), as well as TRCLP, Simon Property Group, Inc., Westfield America, Inc., and various of their affiliates, including Head's general partners (collectively, the "Urban Defendants"), in Circuit Court in Cook County, Illinois. GGP Inc., GGPLP and other affiliates were later included as Urban Defendants. The lawsuit

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alleges, among other things, that the Urban Defendants breached the Urban partnership agreement, unjustly enriched themselves through misappropriation of partnership opportunities, failed to grow the partnership, breached their fiduciary duties, and tortiously interfered with several contractual relationships. The plaintiffs seek relief in the form of unspecified monetary damages and equitable relief requiring, among other things, the Urban Defendants, including GGP, Inc. and its affiliates, to engage in certain future transactions through the Urban Partnership. On June 24, 2013, the court held oral argument on the parties' cross-motions for partial summary judgment. The court rendered its decisions on these motions on November 7, 2013, affirming certain of the motions for plaintiffs and the co-defendants and denying others. A trial date has been scheduled for May 2014. While the parties have entered into discussions regarding potential settlement terms, it is not possible to determine whether such discussions will ultimately result in a settlement acceptable to all parties.

        As a result of our consideration of the risks associated with this matter, the uncertainty regarding the outcome of the settlement discussions, as well as discussions with counsel, the Company has concluded that we cannot reasonably estimate a possible range of potential loss related to the Urban Plaintiffs' lawsuit due to the broad spectrum of monetary and non-monetary remedies that may result from the outcome of the matter and the difficulty in calculating and allocating damages (if any) among the defendants. Therefore, no liability has been accrued and no range of loss has been disclosed in the accompanying consolidated financial statements as of and for the year ended December 31, 2013.

        John Schreiber, one of our former directors, serves on the board of directors of, and is an investor in, an entity that is a principal investor in the Urban Plaintiffs, and is himself an investor in the Urban Plaintiffs and, therefore, has a financial interest in the outcome of the litigation that may be adverse to us.


Tax Indemnification Liability

        Pursuant to the Investment Agreements (defined in Note 1), GGP has indemnified HHC from and against 93.75% of any and all losses, claims, damages, liabilities and reasonable expenses to which HHC and its subsidiaries become subject, in each case solely to the extent directly attributable to MPC Taxes (as defined in the Investment Agreements) in an amount up to $303.8 million. Under certain circumstances, we agreed to be responsible for interest or penalties attributable to such MPC Taxes in excess of the $303.8 million. The IRS disagrees with the method used to report gains for income tax purposes that are the subject of the MPC taxes. As a result of this disagreement, The Howard Hughes Company, LLC and Howard Hughes Properties, Inc. filed petitions in the United States Tax Court on May 6, 2011, contesting this liability for the 2007 and 2008 years and a trial was held in early November 2012. The Internal Revenue Service has opened an audit for these two taxpayers for 2009 through 2011 with respect to MPC Taxes. The outcome of this Tax Court decision will impact the timing of the payment of the MPC taxes to HHC. We anticipate the Tax Court's decision in 2014. We have accrued $303.6 million as of December 31, 2013 and $303.8 million as of December 31, 2012 related to the tax indemnification liability. In addition, we have accrued $21.6 million of interest related to the tax indemnification liability in accounts payable and accrued expenses on our Consolidated Balance Sheets as of December 31, 2013, and December 31, 2012. As a result of our consideration of the risks associated with this matter, as well as discussions with counsel, the Company believes that the aggregate liability recorded of $325.2 million represents management's best estimate of our liability as of December 31, 2013 and that the probability that we will incur a loss in excess of this amount is remote. Depending on the outcome of the Tax Court litigation, it is possible that we may make potentially significant payments on the tax indemnification liability in the next twelve months. We do not expect that these payments will exceed the tax indemnification liability accrued as of December 31, 2013.

ITEM 4.    MINE SAFETY DISCLOSURES

        Not applicable.

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PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

        The following table summarizes the quarterly high and low sales prices on the NYSE for 2013 and 2012.

 
  Stock Price  
Quarter Ended
  High   Low  

2013

             

December 31

  $ 22.25   $ 19.26  

September 30

    21.94     18.67  

June 30

    23.33     18.63  

March 31

    20.97     18.96  

2012

   
 
   
 
 

December 31

  $ 20.55   $ 18.24  

September 30

    21.25     16.95  

June 30

    18.44     15.85  

March 31

    17.07     14.49  

        The following table summarizes distributions per share of our common stock.

Declaration Date
  Record Date   Payment Date   Dividend
Per Share
 

2013

               

October 28

  December 13   January 2, 2014   $ 0.14  

July 29

  October 15   October 29, 2013     0.13  

May 10

  July 16   July 30, 2013     0.12  

February 4

  April 16   April 30, 2013     0.12  

2012

 

 

 

 

   
 
 

November 20

  December 14   January 4, 2013   $ 0.11  

July 31

  October 15   October 29, 2012     0.11  

April 26

  July 16   July 30, 2012     0.10  

February 23

  April 16   April 30, 2012     0.10  


Recent Sales of Unregistered Securities and Repurchase of Shares

        See Note 13 for information regarding shares of our common stock that may be issued under our equity compensation plans as of December 31, 2013 and Note 11 for information regarding redemptions of the common units of GGP Limited Partnership held by limited partners (the "Common Units") for common stock.

        The following line graph sets forth the cumulative total returns on a $100 investment in each of our Common Stock, S&P 500 and the FTSE National Association of REIT—Equity REITs from the Effective Date through December 31, 2013.

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Total Return Performance
Effective Date to December 2013

GRAPHIC

As Of   November 9,
2010
  December 31,
2010
  December 31,
2011
  December 31,
2012
  December 31,
2013
 

General Growth Properties, Inc. 

  Cum $   $ 100   $ 115   $ 112   $ 152   $ 154  

  Return %           15.12     11.69     51.95     53.64  

FTSE NAREIT Equity REIT Index

 

Cum $

   
100
   
102
   
111
   
131
   
134
 

  Return %           2.32     10.80     30.81     34.04  

S&P 500 Index

 

Cum $

   
100
   
104
   
104
   
118
   
152
 

  Return %           3.65     3.64     17.54     52.33  

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Table of Contents

ITEM 6.    SELECTED FINANCIAL DATA

        The following table sets forth selected financial data which should be read in conjunction with the Consolidated Financial Statements and the related Notes and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in this Annual Report.

 
  GGP   GGP, Inc.  
 
  Year Ended
December 31,
2013
  Year Ended
December 31,
2012
  Year Ended
December 31,
2011
  Period from
November 10, 2010
through
December 31, 2010
  Period from
January 1, 2010
through
November 9, 2010
  Year Ended
December 31,
2009
 
 
  (Dollars in thousands)
 

OPERATING DATA(1)

                                     

Total revenues

  $ 2,527,387   $ 2,466,838   $ 2,394,558   $ 350,576   $ 2,029,060   $ 2,408,426  

Total expenses

    (1,695,228 )   (1,707,275 )   (1,778,574 )   (277,526 )   (1,237,143 )   (1,805,934 )

Income (loss) from continuing operations

    307,156     (462,056 )   (193,891 )   (245,471 )   (647,317 )   (491,359 )

Net (loss) income available to common stockholders

    288,450     (481,233 )   (313,172 )   (254,216 )   (1,185,758 )   (1,284,689 )

Basic (loss) earnings per share:

                                     

Continuing operations

  $ 0.30   $ (0.51 ) $ (0.21 ) $ (0.26 ) $ (1.96 ) $ (1.51 )

Discontinued operations

    0.01     (0.01 )   (0.12 )   (0.01 )   (1.78 )   (2.60 )
                           

Total basic earnings per share

  $ 0.31   $ (0.52 ) $ (0.33 ) $ (0.27 ) $ (3.74 ) $ (4.11 )
                           
                           

Diluted (loss) earnings per share:

                                     

Continuing operations

  $ 0.30   $ (0.51 ) $ (0.25 ) $ (0.26 ) $ (1.96 ) $ (1.51 )

Discontinued operations

    0.01     (0.01 )   (0.12 )   (0.01 )   (1.78 )   (2.60 )
                           

Total diluted earnings per share

  $ 0.31   $ (0.52 ) $ (0.37 ) $ (0.27 ) $ (3.74 ) $ (4.11 )
                           
                           

Dividends declared per share(2)(3)

  $ 0.51   $ 0.42   $ 0.83   $ 0.38   $   $ 0.19  
                           
                           

NET OPERATING INCOME ("NOI")(4)

  $ 2,144,260   $ 2,047,764   $ 1,985,064   $ 283,436   $ 1,666,582   $ 1,981,917  

COMPANY NOI(4)

  $ 2,188,611   $ 2,084,299   $ 2,016,741     N/A     N/A     N/A  

FUNDS FROM OPERATIONS ("FFO")(5)

  $ 1,030,852   $ 521,080   $ 908,122   $ (81,750 ) $ 694,427   $ 610,426  

COMPANY FFO(5)

  $ 1,147,671   $ 991,716   $ 874,420     N/A     N/A     N/A  

CASH FLOW DATA(6)

                                     

Operating activities

  $ 889,531   $ 807,103   $ 502,802   $ (358,607 ) $ 41,018   $ 871,266  

Investing activities

    166,860     (221,452 )   485,423     63,370     (89,160 )   (334,554 )

Financing activities

    (1,103,935 )   (533,708 )   (1,436,664 )   (221,051 )   931,345     (51,309 )

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  As of December 31,  
 
  2013   2012   2011   2010   2009  

BALANCE SHEET DATA

                               

Investment in real estate assets—cost

  $ 25,405,973   $ 26,327,729   $ 27,650,474   $ 28,293,864   $ 30,329,415  

Total assets

    25,762,303     27,282,405     29,518,151     32,367,379     28,149,774  

Total debt

    15,878,637     16,173,066     17,349,214     18,047,957     24,456,017  

Redeemable preferred noncontrolling interests

    131,881     136,008     120,756     120,756     120,756  

Redeemable common noncontrolling interests

    97,021     132,211     103,039     111,608     86,077  

Stockholders' equity

    8,103,121     7,621,698     8,483,329     10,079,102     822,963  

(1)
For all periods presented, the operating data related to continuing operations do not include the effects of amounts reported in discontinued operations. See Note 4 for further discussion of discontinued operations.

(2)
The 2011 dividend includes the impact for the non-cash dividend distribution of Rouse Properties, Inc. ("RPI").

(3)
The 2009 and 2010 dividend was paid 90% in Common Stock and 10% in cash in January of 2010 and 2011, respectively.

(4)
NOI and Company NOI (as defined below) are presented at our proportionate share and do not represent income from operations as defined by GAAP.

(5)
FFO and Company FFO (as defined below) are presented at our proportionate share and do not represent cash flows from operations as defined by GAAP.

(6)
Cash flow data only represents GGP's consolidated cash flows as defined by GAAP and as such, operating cash flow does not include the cash received from our Unconsolidated Real Estate Affiliates, except to the extent of contributions to or distributions from our Unconsolidated Real Estate Affiliates.


Basis of Presentation

        The Company emerged from Chapter 11 (as defined in Note 1) on November 9, 2010, which we refer to as the "Effective Date." The structure of the Plan Sponsors' (as defined in Note 1) investments triggered the application of the acquisition method of accounting. The acquisition method of accounting was applied at the Effective Date and, therefore, the Consolidated Balance Sheets as of December 31, 2013, 2012, 2011 and 2010; the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2013, 2012 and 2011 and for the period from November 10, 2010 to December 31, 2010, and the Consolidated Statements of Cash Flows and the Consolidated Statements of Equity for the years ended December 31, 2013, 2012 and 2011, and for the period from November 10, 2010 to December 31, 2010 reflect the revaluation of GGP, Inc.'s assets and liabilities to fair value as of the Effective Date. Certain elements of our financial statements were significantly changed by these adjustments, such as depreciation which is calculated on revalued property and equipment and amortization of above and below market leases and other intangibles which is also calculated on revalued assets and liabilities. The results for GGP (as defined in Note 1) and GGP, Inc. (as defined in Note 1) are based on different bases of accounting. Due to the increased depreciation in operating expenses and the net decrease of revenues due to the amortization of above and below market leases and straight-line rent, certain line items of the statements of operations for GGP, Inc. and GGP are not directly comparable.


Non-GAAP Financial Measures

        The Company presents NOI and FFO as they are financial measures widely used in the REIT industry. Refer to Item 7 for definitions and reconciliations.

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        All references to numbered Notes are to specific footnotes to our Consolidated Financial Statements included in this Annual Report and whose descriptions are incorporated into the applicable response by reference. The following discussion should be read in conjunction with such Consolidated Financial Statements and related Notes. Capitalized terms used, but not defined, in this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") have the same meanings as in such Notes.


Overview—Introduction

        Our primary business is to be an owner and operator of best-in-class retail properties that provide an outstanding environment and experience for our communities, retailers, employees, consumers and shareholders. Our properties are predominantly located in the United States. As of December 31, 2013, we are the owner, either entirely or with joint venture partners, of 120 regional malls comprising approximately 125 million square feet of GLA.

        We provide management and other services to substantially all of our properties, including properties which we own through joint venture arrangements and which are unconsolidated for GAAP purposes. Our management operating philosophies and strategies are the same whether the properties are consolidated or unconsolidated.

        We seek to increase long-term Company NOI (as defined below) growth through proactive management and leasing of our properties. Our leasing strategy is to identify and provide the right stores to have appropriate merchandise mix. We believe that the most significant operating factor affecting incremental cash flow and Company NOI is increased rents earned from tenants at our properties. These rental revenue increases are primarily achieved by:

    increasing the permanent occupancy;

    increasing rental revenues by leasing at higher rates than those expiring; and

    increasing tenant sales, which will allow us to obtain higher rents, and in which we participate through overage rent.

        We may recycle capital by strategically disposing assets and opportunistically investing in high quality retail properties. Controlling operating expenses by leveraging our scale to maximize synergies is a critical component to Company NOI growth.


Overview

        Our Company NOI (as defined below) increased 5.0% from $2.1 billion for the year ended December 31, 2012 to $2.2 billion for the year ended December 31, 2013. Operating income increased 9.5% from $759.6 million for the year ended December 31, 2012 to $832.2 million for the year ended December 31, 2013. Our Company FFO (as defined below) increased 15.7% from $991.7 million for the year ended December 31, 2012 to $1.1 billion for the year ended December 31, 2013. Net income (loss) attributable to General Growth Properties, Inc. increased from $(481.2) million for the year ended December 31, 2012 to $302.5 million for the year ended December 31, 2013.

        See Non-GAAP Supplemental Financial Measures below for a discussion of Company NOI and Company FFO, along with a reconciliation to the comparable GAAP measures, Operating income and Net income (loss) attributable to General Growth Properties, Inc.

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        During 2013 we completed transactions and achieved operational goals in order to promote our long-term strategy to enhance the quality of our overall portfolio as follows:

    sold our investment in Aliansce (Note 6);

    acquired the 41,070,000 Warrants held by Fairholme and the 5,000,000 Warrants held by Blackstone for an aggregate purchase price of approximately $633 million;

    acquired four retail properties for total consideration of $396.3 million, which included cash of $355.0 million and the assumption of debt of $41.3 million. The four retail properties acquired include a 50% interest in a portfolio comprised of two properties in the Union Square area of San Francisco (Note 3);

    acquired the remaining 50% interest in Quail Springs Mall, from our joint venture partner, for total consideration of $90.5 million, including $55.0 million of cash and the assumption of debt of $35.0 million (Note 3);

    sold our interests in six retail properties for total consideration of $142.6 million, which reduced our property level debt by $143.6 million. Additionally, one property, which was previously transferred to a special servicer, was sold in a lender-directed sale in full satisfaction of the debt. This resulted in a gain on extinguishment of debt of $25.9 million and a reduction of property level debt of $96.9 million;

    reinvested in our portfolio by acquiring 28,345,108 shares of our common stock for $566.9 million (Note 12); and

    invested $625.3 million to date on $2.1 billion of identified redevelopment projects.


Operating Metrics

Same Store Operating Metrics

        The following table summarizes selected operating metrics for our same store portfolio.

 
  December 31, 2013(1)   December 31, 2012(1)   % Change  

In-Place Rents per square foot(2)

                   

Consolidated Properties

  $ 67.61   $ 67.39     0.33 %

Unconsolidated Properties

    80.42     73.63     9.22 %
               

Total

  $ 71.29   $ 69.12     3.14 %

Percentage Leased

   
 
   
 
   
 
 

Consolidated Properties

    96.9 %   95.8 %   110 bps  

Unconsolidated Properties

    97.6 %   97.0 %   60 bps  
               

Total

    97.1 %   96.1 %   100 bps  

Tenant Sales

   
 
   
 
   
 
 

Consolidated Properties

  $ 520   $ 524     -0.76 %

Unconsolidated Properties

    677     603     12.27 %
               

Total

  $ 564   $ 545     3.49 %

(1)
Metrics exclude one asset that is being de-leased in preparation for redevelopment.

(2)
Represents average rent over the term consisting of base minimum rent, common area costs and real estate taxes.

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Lease Spread Metrics

        The following table summarizes signed leases that were scheduled to commence in 2013 compared to expiring leases for the prior tenant in the same suite.

 
  Number
of Leases
  Square
Feet
  Term/Years   Initial Rent Per
Square Foot(1)
  Expiring Rent Per
Square Foot(2)
  Initial Rent
Spread
  % Change  

New Leases(3)

    624     1,914,314     8.5   $ 69.78   $ 55.60   $ 14.18     25.5 %

Renewal Leases(3)

    971     2,877,025     4.5     60.64     58.35     2.29     3.9 %
                               

New/Renewal Leases(3)

    1,595     4,791,339     6.1   $ 64.29   $ 57.25   $ 7.04     12.3 %
                               
                               

(1)
Represents initial rent over the term consisting of base minimum rent, common area costs and real estate taxes.

(2)
Represents expiring rent at end of lease consisting of base minimum rent, common area costs and real estate taxes.

(3)
Represents leases where downtime between the new and previous tenant in the suite was less than nine months.


Results of Operations

Year Ended December 31, 2013 and 2012

        The following table is a breakout of the components of minimum rents:

 
  Year Ended December 31,    
   
 
 
  2013   2012   $ Change   % Change  
 
  (Dollars in thousands)
   
   
 

Components of Minimum rents:

                         

Base minimum rents

  $ 1,597,802   $ 1,563,288   $ 34,514     2.2 %

Lease termination income

    10,888     8,622     2,266     26.3  

Straight-line rent

    49,504     59,749     (10,245 )   (17.1 )

Above and below-market tenant leases, net

    (69,311 )   (81,726 )   12,415     (15.2 )
                   

Total Minimum rents

  $ 1,588,883   $ 1,549,933   $ 38,950     2.5 %
                   

        Base minimum rents increased by $34.5 million primarily due to increased permanent occupancy from 90.2% as of December 31, 2012 to 92.0% as of December 31, 2013.

        Tenant recoveries increased $22.7 million primarily due to higher real estate tax recoveries in 2013, which were driven by increased real estate tax expense and therefore increased recovery income. Additionally in 2013, we settled a multi-year real estate tax suit with a municipality at one operating property, which resulted in a $5.1 million recovery during the first quarter of 2013. Tenant recoveries also increased due to increased permanent occupancy.

        Overage rents decreased $13.5 million due in part to our contribution of The Grand Canal Shoppes and The Shoppes at the Palazzo into a joint venture that was formed with TIAACREF during the second quarter of 2013 (Note 3). This resulted in $7.5 million less Overage rents in 2013 compared to 2012, as the properties are now accounted for as Unconsolidated Real Estate Affiliates (defined in Note 1).

        Management fees and other corporate revenues decreased $3.2 million. This is primarily due to higher one-time development and finance fees earned during 2012 at various joint venture properties.

        Other revenue increased $15.6 million due to a gain on sale of land to a municipality in the fourth quarter of 2013 for $9.6 million.

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        Real estate taxes increased $24.8 million, and $11.1 million of this increase was the result of the settlement of a multi-year real estate tax suit with a municipality at one operating property during the first quarter of 2013. In addition, certain other properties saw increased real estate tax expense in 2013.

        Property maintenance costs decreased $4.8 million. This decrease is primarily due to lower contracted services of $3.2 million resulting from continued efforts to control operating expenses in 2013.

        Other property operating costs decreased $8.9 million due to our contribution of The Grand Canal Shoppes and the Shoppes at the Palazzo into a joint venture that was formed with TIAACREF during the second quarter of 2013 (Note 3). This resulted in less Other property operating costs in 2013 compared to 2012, as the properties are now accounted for as Unconsolidated Real Estate Affiliates (defined in Note 1). This decrease is partially offset by increased compensation and benefits and the write-off of a ground lease intangible related to a land purchase at one operating property.

        Property management and other costs increased $5.2 million due to higher compensation and benefits in 2013.

        General and administrative increased $10.1 million primarily due to a litigation settlement in 2012 that reduced General and administrative by $5.3 million in that year. In addition, we incurred one-time acquisition related transaction costs during the fourth quarter of 2013.

        Provision for impairment in 2013 and 2012 of $18.4 million and $32.1 million, respectively, reflects impairment charges taken at one property (Notes 2 and 5).

        Depreciation and amortization decreased by $17.7 million primarily due to our contribution of The Grand Canal Shoppes and The Shoppes at the Palazzo into a joint venture that was formed with TIAACREF during the second quarter of 2013 (Note 3), which resulted in $20.1 million less in Depreciation and amortization in 2013 as compared to 2012 as these properties are now accounted for as Unconsolidated Real Estate Affiliates.

        Interest income increased $5.3 million. This increase is primarily due to interest income received from the note receivable recorded in conjunction with the sale of Aliansce in the third quarter of 2013 (Note 6).

        Interest expense decreased by $58.0 million primarily due to the redemption of $700.5 million of unsecured corporate bonds in 2013. The decrease is also due to a $9.7 million increase in capitalized interest related to redevelopment projects. This decrease is partially offset by a write-off of a market rate adjustment related to the refinancing of Ala Moana, which reduced interest expense during 2012.

        The loss on foreign currency represents foreign exchange loss on the note receivable denominated in Brazilian Reais, and received in conjunction with the sale of Aliansce in the third quarter of 2013 (Note 6).

        The Warrant liability adjustment for the year ended December 31, 2013, represents the non-cash income or expense recognized as a result of the change in the fair value of the Warrant liability. We incurred a net Warrant liability adjustment of $40.5 million during the first quarter of 2013. This adjustment reflects our purchase of the Warrants from Fairholme and Blackstone (both defined in Note 1), as the amount paid exceeded the liability by approximately $55 million. This was partially offset by the revaluation of the remaining Warrants as of March 28, 2013. As of March 28, 2013, an amendment to the warrant agreement changed the classification of the Warrants owned by Brookfield from a liability to a component of permanent equity. As a result, the Warrants have not been revalued after March 28, 2013. Refer to Note 9 for a discussion of transactions related to the Warrants.

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        The Warrant liability adjustment of $502.2 million in the year ended December 31, 2012 is a result of an increase in our stock price from December 31, 2011 which was partially offset by the effect of a decrease in the implied volatility of our stock from 37% in 2011 to 33% in 2012.

        The Gain from change in control of investment properties of $219.8 million in 2013 is due to our contribution of The Grand Canal Shoppes and The Shoppes at the Palazzo into a joint venture, and the purchase of our partner's interest in Quail Springs Mall, previously held in a joint venture (Note 3). The 2012 Gain from change in control of investment properties of $18.5 million relates to the purchase of our partner's interest in two regional malls previously held in a joint venture.

        The Loss on extinguishment of debt of $36.5 million in 2013 is the result of fees expensed for the early payoff of debt. $20.5 million of such fees were expensed as a result of the early redemption of the $608.7 million of 6.75% unsecured corporate bonds due November 9, 2015. In addition, we expensed $6.6 million in financing fees resulting from the refinancing of the $1.5 billion secured corporate loan, $3.5 million as a result of the early redemption of $91.8 million of 5.38% unsecured corporate bonds due November 26, 2013, and $5.9 million as a result of the early payoff of mortgage debt at one operating property (Note 7). The Loss on extinguishment of debt in 2012 of $15.0 million is the result of a fee expensed for the early redemption of the $600.0 million of 6.75% unsecured corporate bonds due May, 2013.

        Equity in income from Unconsolidated Real Estate Affiliates—gain (loss) on investment for the year ended December 31, 2013 primarily relates to a gain on the sale of a portion of our interest in Water Tower Place of $10.1 million (Note 6).

        Equity in income from Unconsolidated Real Estate Affiliates—gain (loss) on investment of $23.4 million for the year ended December 31, 2012 represents the gain from the dilution of our investment in Aliansce as a result of its secondary equity offering.

        Preferred Stock issued during the first quarter of 2013 resulted in $14.1 million in preferred stock dividends accrued during 2013 (Note 11).


Year Ended December 31, 2012 and 2011

        The following table is a breakout of the components of minimum rents:

 
  Year Ended December 31,    
   
 
 
  2012   2011   $ Change   % Change  
 
  (Dollars in thousands)
   
   
 

Components of Minimum rents:

                         

Base minimum rents

  $ 1,563,288   $ 1,509,411   $ 53,878     3.6 %

Lease termination income

    8,622     15,405     (6,784 )   (44.0 )

Straight-line rent

    59,749     76,067     (16,318 )   (21.5 )

Above and below-market tenant leases, net

    (81,726 )   (92,459 )   10,733     (11.6 )
                   

Total Minimum rents

  $ 1,549,933   $ 1,508,424   $ 41,509     2.8 %
                   

        Base minimum rents increased by $53.9 million primarily due to increased permanent occupancy and increasing in-place rents.

        Tenant recoveries increased $6.3 million primarily due to higher recoveries from common area maintenance fees and real estate taxes in 2012.

        Overage rents increased $9.7 million primarily due to increased tenant sales per square foot in 2012.

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        Management fees and other corporate revenues increased $10.8 million primarily due to one-time development and financing fees earned during 2012 at various joint venture properties.

        Property maintenance costs decreased $10.3 million due to a decrease in compensation and benefits and lower snow removal costs as a result of a mild winter in 2012.

        Property management and other costs decreased $27.3 million primarily due to a $24.5 million reduction in compensation and benefits in 2012, which was partially offset by increased legal services and national marketing costs.

        General and administrative increased $8.3 million. The increase is primarily due to a $5.3 million reduction in General and administrative related to a litigation settlement in 2012. The reversal of previously accrued bankruptcy costs and gains on settlements of $18.2 million are included in 2011, both of which reduced General and administrative expense. Excluding these items, General and administrative decreased in 2012 due to a $6.8 million decrease in professional fees.

        Provision for impairment in 2012 of $32.1 million reflects an impairment charge taken at one property (Notes 2 and 5).

        Depreciation and amortization decreased $72.0 million primarily due to fully depreciated and written off tenant-specific in-place lease intangibles as tenants vacated prior to the end of their lease term in 2012 versus 2011. This was partially offset by increased building depreciation of $8.2 million as a result of accelerated depreciation associated with the demolition of a building in 2012.

        Interest expense decreased $68.9 million primarily due to default interest incurred on the Homart Note and the 2006 Credit Facility totaling $55.9 million during 2011. Additionally we incurred $26.1 million less interest expense in 2012 due to lower average interest rates obtained as a result of our refinancing activity since 2011. These decreases were partially offset by increases of amortization and write-offs of debt market rate adjustments of $22.5 million in 2012.

        The Warrant liability adjustment represents the non-cash income or expense recognized as a result of the change in the fair value of the Warrant liability (Note 9). We incurred expense of $502.2 million for the year ended December 31, 2012 as the result of an increase in our stock price from December 31, 2011 which was partially offset by the effect of a decrease in implied volatility from 37% in 2011 to 33% in 2012. We recognized income of $55.0 million for the year ended December 31, 2011 as the result of a decrease in our stock price from December 31, 2010 and the decrease in implied volatility.

        The 2012 Gain from change in control of investment properties of $18.5 million relates to the purchase of our partner's interest in two regional malls previously held in a joint venture.

        The Loss on extinguishment of debt in 2012 of $15.0 million is the result of a fee expensed for the early redemption of the $600.0 million of 6.75% unsecured corporate bonds due May, 2013.

        Equity in income from Unconsolidated Real Estate Affiliates—gain (loss) on investment of $23.4 million for the year ended December 31, 2012 represents the gain from the dilution of our investment in Aliansce as a result of its secondary equity offering.


Liquidity and Capital Resources

        Our primary source of cash is from the ownership and management of our properties. We may also raise cash from refinancings or borrowings under our revolving credit facility. Our primary uses of cash include payment of operating expenses and capital, working capital, debt service, reinvestment in and redevelopment of properties, tenant allowances and dividends.

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        We anticipate maintaining financial flexibility by managing our future maturities, amortization of debt, cross collateralizations and corporate guarantees, improving operations and providing the necessary capital to fund growth. We believe that we currently have sufficient liquidity to satisfy all of our commitments in the form of $577.3 million of consolidated unrestricted cash and $948.2 million of available credit under our credit facility as of December 31, 2013, as well as anticipated cash provided by operations.

        Our key financing and capital raising objectives include:

    to refinance our maturing debt and certain debt that is prepayable without penalty,

    to manage future debt maturities coming due in any one year; and

    to reduce the amount of debt that is recourse to us.

        We may also raise capital through public or private issuances of debt securities, preferred stock, common stock, common units of the Operating Partnership or other capital raising activities.

        During 2013, we executed the following refinancing and capital transactions (at our proportionate share):

    acquired 28,345,108 shares of our common stock for $566.9 million (Note 12);

    acquired the 41,070,000 Warrants held by Fairholme and the 5,000,000 Warrants held by Blackstone for an aggregate purchase price of approximately $633 million;

    completed $5.6 billion of secured financings, including the $1.5 billion secured corporate loan, lowering the average interest rate, lengthening the term-to-maturity, and generating net proceeds of approximately $1.4 billion;

    issued 10,000,000 shares of 6.375% Preferred Stock, generating proceeds of approximately $250 million before issuance costs; and

    redeemed $700.5 million of unsecured corporate bonds with a weighted-average interest rate of 6.57%. The redeemed unsecured corporate bonds were scheduled to mature in 2013 and 2015.

        As of December 31, 2013, we have $2.8 billion of debt pre-payable at par. We may pursue opportunities to refinance this debt at lower interest rates and longer maturities.

        As a result of our financing efforts in 2013, we have reduced the amount of debt due in the next three years from $5.3 billion to $1.9 billion, representing 10.7% of our total debt at maturity. The maximum amount due in any one of the next ten years is no more than $3.0 billion or approximately 17.2% of our total debt at maturity.

        As of December 31, 2013, our proportionate share of total debt aggregated $19.0 billion. Our total debt consists of our share of consolidated debt of $15.7 billion, of which $15.5 billion is secured and $206.2 million is corporate unsecured, and $3.2 billion of our share of the secured debt of our Unconsolidated Real Estate Affiliates. Of our proportionate share of total debt, $1.9 billion is recourse to the Company or its subsidiaries due to guarantees or other security provisions for the benefit of the note holder.

        The following table illustrates the scheduled payments for our proportionate share of total debt as of December 31, 2013. The $206.2 million of Junior Subordinated Notes are due in 2041, but we may

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redeem them any time after April 30, 2011 (Note 7). As we do not expect to redeem the notes prior to maturity, they are included in the consolidated debt maturing subsequent to 2018.

 
  Consolidated(1)   Unconsolidated(1)  
 
  (Dollars in thousands)
 

2014

  $ 350,488   $ 19,058  

2015

    806,110     199,773  

2016

    1,038,660     24,243  

2017

    873,790     334,049  

2018

    1,975,332     232,066  

Subsequent

    10,741,543     2,385,091  
           

  $ 15,785,923   $ 3,194,280  
           
           

(1)
Excludes $1.0 million of adjustments related to special improvement district liabilities and debt market rate adjustment.

        We generally believe that we will be able to extend the maturity date, repay or refinance the consolidated debt that is scheduled to mature in 2014. We also believe that the joint ventures will be able to refinance the debt of our Unconsolidated Real Estate Affiliates upon maturity; however there can be no assurance that we will be able to refinance or restructure such debt on acceptable terms or otherwise, or that joint venture operations or contributions by us and/or our partners will be sufficient to repay such loans.

Acquisitions and Joint Venture Activity

        From time-to-time we may acquire whole or partial interests in high-quality retail properties that are consistent with our strategy of owning and operating best-in-class retail properties. Such assets provide long-term embedded growth or potential redevelopment opportunities.

        During the year ended December 31, 2013, we executed the following transactions (at our proportionate share):

    acquired four retail properties for total consideration of $396.3 million, which included cash of $355.0 million and the assumption of debt of $41.3 million. The four retail properties acquired include a 50% interest in a portfolio comprised of two properties in the Union Square area of San Francisco (Note 3);

    formed a joint venture with TIAACREF, contributing The Grand Canal Shops and The Shoppes at the Palazzo, which generated proceeds to GGP of $411.5 million net of debt assumed of $311.9 million (Note 3); and

    acquired the remaining 50% interest in Quail Springs Mall, from our joint venture partner, for total consideration of $90.5 million, including $55.5 million of cash and the assumption of debt of $35.0 million (Note 3).


Warrants and Brookfield Ownership

        On January 28, 2013, GGPLP acquired the 41,070,000 Warrants held by Fairholme and the 5,000,000 Warrants held by Blackstone for an aggregate purchase price of approximately $633 million. The Warrants were exercisable into approximately 27 million common shares of the Company at a weighted-average exercise price of $9.37 per share, assuming net share settlement.

        As a result of the GGPLP/Fairholme/Blackstone transaction mentioned above, Brookfield now owns or manages on behalf of third parties all of the Company's remaining outstanding Warrants,

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which are exercisable into approximately 46 million common shares of the Company at a weighted-average exercise price of $9.29 per share, assuming net share settlement. The Warrants will continue to adjust for dividends paid by the Company.

        As of February 18, 2014, Brookfield's potential ownership of the Company (assuming full share settlement of the Warrants) is 40.9%, which is stated in their Form 13D filed on the same date. If Brookfield held or managed this same ownership through the maturity date of the Warrant assuming: (a) GGP's common stock price increased $10 per share and (b) the Warrants were adjusted for the impact of regular dividends, we estimate that their ownership would be 39.6% of the Company under net share settlement, and 41.3% of the Company under full share settlement.

        On March 28, 2013, we amended the warrant agreement to replace the right of warrant holders to receive cash from the Company under a change of control to the right to, instead, receive shares of the Company, changing the method of settlement. Effective on March 28, 2013, this amendment results in the classification of the Warrants as a component of permanent equity on our Consolidated Balance Sheets. Prior to the amendment, the Warrants were classified as a liability and marked to fair value, with changes in fair value recognized in earnings. The following table summarizes the change in fair value of the Warrants:

 
  Brookfield Investor   Fairholme/Blackstone   Total  
 
  (Dollars in thousands)
 

December 31, 2012

  $ 913,000   $ 575,000   $ 1,488,000  

Warrant liability adjustment

    (17,500 )   58,000     40,500  

Purchase of Fairholme/Blackstone Warrants

        (633,000 )   (633,000 )

Reclassification of Warrants to Equity

    (895,500 )       (895,500 )
               

December 31, 2013

  $   $   $  
               
               


Redevelopments

        We are currently redeveloping several consolidated and unconsolidated properties primarily to convert large-scale anchor boxes into smaller leasable areas and to create new in-line retail space and new restaurant venues. The execution of these redevelopment projects within our portfolio was identified as providing compelling risk-adjusted returns on investment.

        We have identified $2.1 billion of income producing redevelopment projects within our portfolio, over 80% of which is being invested into Class A malls. We currently expect to achieve returns of approximately 12% on open projects and 8—10% on projects under construction or in our pipeline, which average 9%—11% for all projects (cash on cash first year stabilized) on these projects as they commence operations. We plan to fund these redevelopment costs with available cash flow, construction financing, and proceeds from debt refinancings. We continue to evaluate a number of

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other redevelopment prospects to further enhance the quality of our assets. The following table illustrates our planned redevelopments:

Property
  Description   Ownership %   GGP's Total
Projected
Share of Cost
  GGP's
Investment
to Date(1)
  Expected
Return on
Investment(2)
  Expected
Project
Opening

Major Development Summary (in millions, at share unless otherwise noted)

         

Open

 

 

   
 
   
 
   
 
   

 

 

 

Northridge
Northridge, CA

  The Sports Authority, Yardhouse and Plaza     100 % $ 12.2   $ 11.3     14%   Open

Fashion Show
Las Vegas, NV

 

Addition of Macy's Men's and inline

   
100

%
 
34.8
   
31.0
   

23%

 

Open

Oakwood Center
Gretna, LA

 

West wing redevelopment and Dick's Sporting Goods

   
100

%
 
19.0
   
13.9
   

9%

 

Open

Glendale Galleria(3)
Glendale, CA

 

Addition of Bloomingdale's, remerchandising, business development and renovation

   
50

%
 
51.7
   
39.8
   

12%

 

Open

The Mall in Columbia
Columbia, MD

 

Lifestyle expansion

   
100

%
 
23.6
   
12.1
   

12%

 

Open

Oakbrook Center
Oakbrook, IL

 

Conversion of former anchor space into Container Store, Pirch and inline

   
47

%
 
15.0
   
9.5
   

10%

 

Open

Other Projects
Various Malls

 

Redevelopment projects at various malls

   
N/A
   
128.5
   
108.2
   

9%

 

Open

                           

Total Open Projects

            $ 284.8   $ 225.8     12%    
                           

Under Construction

                               

The Woodlands(3)
Woodlands, TX

  Addition of Nordstrom in former Sears box     100 % $ 44.7   $ 28.6     7 - 9%   Q3 2014

Mayfair Mall(3)
Wauwatosa, WI

 

Nordstrom

   
100

%
 
72.3
   
2.7
   

6 - 8%

 

Q3 2015

Ridgedale Center(3)
Minnetonka, MN

 

Nordstrom, Macy's Expansion, New Inline GLA and renovation

   
100

%
 
106.2
   
15.7
   

8 - 9%

 

Q3 2015

Ala Moana Center
Honolulu, HI

 

Demolish existing Sears store and expand mall, adding anchor, box and inline tenants and reconfigure center court

   
100

%
 
573.2
   
239.9
   

9 - 10%

 

Q4 2015

Other Projects
Various Malls

 

Redevelopment projects at various malls

   
N/A
   
171.8
   
54.3
   

8 - 9%

 

Various

                           

Total Projects Under Construction

            $ 968.2   $ 341.2     8 - 10%    
                           

Projects in Pipeline