Glimcher Realty Trust (



Q3 2011 Earnings Conference Call

October 28, 2011 10:00 AM ET


Lisa Indest – SVP, Finance and Accounting

Michael Glimcher – Chairman and CEO

Mark Yale – CFO

Marshall Loeb – President and COO


Lindsay Schroll – Bank of America/Merrill Lynch

Todd Thomas – KeyBanc Capital Markets

Ben Yang – KBW

Nathan Isbee – Stifel Nicolaus

Carol Kemple – Hilliard Lyons

Wes Golladay – RBC Capital Markets

RJ Milligan – Raymond James

Quentin Velleley – Citi



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Good day, ladies and gentlemen. And welcome to the third quarter 2011 Glimcher Realty Trust earnings conference call. My name is Santali, and I’ll be your facilitator for today’s call. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator Instructions)

I’d now like to turn the presentation over to your host for today’s call, Ms. Lisa Indest, Senior Vice President of Finance Accounting. Please proceed.

Lisa Indest

Good morning and welcome to the Glimcher Realty Trust 2011 third quarter conference call. Last evening a copy of our press release was circulated on the newswire and hopefully each of you have the opportunity to review our results. Copies of both the press release and the third quarter supplemental information package are available on our website at

Certain statements made during this conference call which are not historical maybe deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

For a more detailed description of the risks and uncertainties that may cause future events to differ from the results discussed in the forward-looking statements please refer to our earnings release and to our various SEC filings.

Management may also discuss certain non-GAAP financial measure. Reconciliations of each non-GAAP measure to the comparable GAAP measure are included in our earnings release and the financial reports we filed with the SEC.

Members of management with us today are Michael Glimcher, Chairman and CEO; Marshall Loeb, President and COO; and Mark Yale, CFO.

And now, I’d like to turn the call over to Michael Glimcher.

Michael Glimcher

Thank you, Lisa. Good morning everyone and thank you for joining us on today’s call. Once again we are proud of what we have been able to accomplish in the execution of our business strategy over the last quarter. Especially, when considering the global macroeconomic issues that were in play. First, we delivered solid financial results for the third quarter supported by sound property operating fundamentals.

Our FFO per share of $0.15 for the third quarter came in within our prior guidance range driven by solid property performance in all of our key operating metrics. Net operating income growth was again positive up 3%. Total mall occupancy increased as well over the prior year levels up 110 basis points to 94.3% as of the quarter end. We are also getting close to reaching our goal of $400 per square foot in sales from our mall portfolio.

Aggregate sales were up to $396 per square foot another record for the portfolio and a 12% rise over prior year levels. In fact, sales are now up 20% from the lows of 2009. Additionally, we have experienced minimal fall off from tenant bankruptcy activity, which has remained near historic lows within the portfolio.

Leasing activity continues at a solid pace as well. Up over 30% for in line space on a year-to-date basis compared to 2010. What’s even more encouraging is the acceleration and releasing spread throughout the portfolio, which were positive 12% on leases signed during the third quarter. While we are concerned about the macroeconomic issues and the potential impact on our retail partners we are not seeing any change in behavior on the ground. Arguably the leasing environment today is just as strong if not better than where we stood earlier this year.

As we discussed during our last call, we are also focused on several significant redevelopment opportunities that will strengthen our ability to deliver future growth from our core mall portfolio. Within the existing outlet segment of our portfolio we see the potential to generate high single digit returns on a $50 million to $60 million investment in Jersey Gardens and SuperMall.

As we have previously discussed, there is an opportunity to enhance the current tenant mix at Jersey Gardens by adding higher end luxury outlets to our offering at the center. This push will be coordinated with major interior and exterior renovations. In terms of the renovation project we are currently wrapping up to planning Phase, which includes finalizing the scope and supporting architectural drawings. We would expect the bulk of the work to commence early next year with completion occurring in mid 2013.

We are also making aggressive move on solidifying the outlet component of our SuperMall which is located in Metro Seattle area. Based upon feedback from our outlet retailers we believe there is an opportunity to enhance this asset into a fashion outlet center serving the southern half of the Seattle market. In conjunction with the leasing efforts we will be moving forward with physical enhancements to this center as well. We would expect this work to begin next year with the targeted grand reopening in the middle of 2013. We believe investing in our core through this type of redevelopment along with smaller opportunities throughout the portfolio represents the best use of our capital on a risk adjusted return basis.

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