Taubman To Write Down Values Of 2 Properties

BLOOMFIELD HILLS, Mich. (AP) — Mall operator Taubman Centers Inc. said Tuesday that it will write down the book values of two of its real estate holdings to fair value in the third quarter, blaming tough economic conditions.

The write downs of The Pier Shops at Caesars in Atlantic City, N.J., and Regency Square in Richmond, Va., are expected to cut Taubman's earnings by $161 million to $169 million, representing earnings and funds from operations of $1.95 to $2.05 per share, the company said.

The company said that the net operating income generated from The Pier Shops at Caesars is not enough to cover debt service on the asset's $135 million mortgage.

Taubman said its board decided that it's in the best interest of the company to end its financial support of the center. As a result, the book value of The Pier will be written down by $106 to $111 million.

Taubman's share of about $100 million to $105 million will be written down to about $52 million. The company's entire cash investment in the property to date is about $35 million.

The company also determined that its investment in Regency Square is also impaired based on current estimates of future cash flows for the property. As a result, the book value of the asset will be written down by $55 million to $58 million to about $30 million.

Taubman shares fell 27 cents to $35.65 in morning trading.