Las Vegas retail vacancies are declining, very good news for two of our holdings, General Growth Properties (GGP) and Howard Hughes Corp. (HHC). From the article below, we see GGP has had a flurry of new leasing activity (this will be at above current rates), and that the region in general has seen both a YOY decrease in vacancies and an increase in retail sales. While the effects on GGP are obvious and more immediate, the effect on HHC must also be noted. As the region recovers, housing there will along with it. Remember I have said I thought that since Vegas current house pricing is virtually the same as that for bank-owned properties, I am thinking it will bottom/stabilize earlier than many are saying.
A general economic recovery of the region will expedite that process. HHC owns both retail and residential properties there - both on and off the strip. While it may take some time to be realized, the basis for owning shares in the company is that they are materially undervalued based on the potential of the properties they own and can develop. This kind of news bolsters that view.
HT Reader Dave
From Las Vegas Business Press
General Growth Properties, owner of five major Las Vegas shopping malls, recently signed 20 new tenants combining for 62,561 square feet of store space. The news suggests a strengthening recovery for the company that emerged from Chapter 11 bankruptcy in November.
The leasing-activity uptick comes as the stock price for Chicago-based General Growth is climbing. Shares of General Growth, which trade on the New York Stock Exchange under the symbol GGP, closed Feb. 8 at $15.30. The price has risen 23.8 percent since July 6, when General Growth closed at $12.36.
“The last couple of years were pretty challenging for everybody, but retailers are investing dollars to be here,” said General Growth Senior Vice President Dan Sheridan, who oversees the six-state southwest region consisting of 45 shopping centers, with residential and office space. “Retail sales at our local properties were up 10 percent last year over 2009, and we remain optimistic the upward trend will continue in 2011.”
... “While taxable retail sales remain lower than levels reported prior to the latest downturn, signs that a recovery among anchored-retail centers is taking shape,” Applied Analysis principal Brian Gordon said. “Despite job and economic concerns persisting, residents and visitors to southern Nevada are spending more than they have compared to a year ago, a ray of light in an otherwise difficult operating environment.”
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