Corporate Profile. April 2013

Transcription

1 Corporate Profile April 2013

2 Forward Looking Statements (1) This presentation contains forward-looking statements. Such forward-looking statements are based upon the current beliefs and expectations of the management team of Rouse Properties, Inc. (the Company ), and are subject to risks, uncertainties and other factors which could cause actual results to differ from the results suggested by the forward-looking statements. Factors that could cause actual results to differ materially from current expectations include the assumptions contained in this presentation, general economic conditions and conditions in the retail sector, the Company s ability to generate internal and external growth, the Company s ability to identify and complete the acquisition of properties in new markets, the Company s ability to complete redevelopment projects, the Company s ability to lease or release space in its properties, increases in interest rates, the effect of inflation and increases in operating costs and real estate taxes. The Company discusses these factors, risks and uncertainties in its annual and quarterly periodic reports filed with the Securities and Exchange Commission, and the information set forth herein should be considered in light of such factors, risks and uncertainties. The Company does not assume any obligation to update the information in this presentation. Source: Company filings (1) All financial and leasing information current as of December 31, 2012 as updated by disclosed subsequent events through March 19,

3 Overview (NYSE:RSE) Mission is to be a national leader, owner, manager and innovator of dominant middle-market enclosed regional malls Nationally diversified portfolio with a focus on protected market malls Portfolio consists of 32 regional enclosed malls totaling 22.5 million square feet Significant internal and external growth opportunities Tailored business plans at the asset level to increase occupancy and sales per square foot Well-capitalized balance sheet with strong sponsorship support Experienced and focused management team Lansing Mall Michigan Cache Valley Mall Utah Chula Vista Center California 2

4 Nationally Diversified Portfolio with Focus on Protected Malls Portfolio consists of 32 regional enclosed malls in 20 states; 75% are in protected markets Silver Lake Mall Three Rivers Mall Bayshore Mall Gateway Mall Cache Valley Mall Southland Mall West Valley Newpark Mall San Francisco The Boulevard Mall Regional Office Chula Vista Center The Mall at Sierra Vista White Mountain Mall Animas Valley Mall Washington Park Mall Sikes Senter North Plains Mall Knollwood Mall Birchwood Mall Lansing Mall Southland Center Spring Hill Mall Westwood Mall Pierre Bossier Mall Collin Creek Vista Ridge Dallas Mall St. Vincent Regional Office Steeplegate Mall Grand Traverse Mall Mall at Turtle Creek Colony Square Mall Valley Hills Mall New York City Corporate Office Portfolio Statistics (1) Number of Properties 32 Total GLA 22.5 m SF Mall & Freestanding GLA 10.1 m SF % Leased (2) 90.0% Tenant Sales (3) $296 PSF 2012 Acquisitions The Mall at Turtle Creek, 732,000 SF (Acquired 2012) Grand Traverse Mall, 590,000 SF (Acquired 2012) Source: Company filings (1) December 31, 2012 financials. (2) Represents contractual obligations for space in Rouse malls and excludes traditional anchor stores. (3) Trailing twelve month tenant sales for mall stores less than 10,000 square feet. Lakeland Square Mall 3

5 External Trends Favorable Landscape Retailer Expansion in B Malls Tenants increasingly focused on profit margins afforded by operating in B malls Large and growing group of retailers are being squeezed out of A malls Trend of big-box retailers moving into malls continues and will accelerate Big-Box Tenant Evolution Rouse malls offer the best real estate in the market coupled with high traffic and sales All but six Rouse malls are single-level, providing flexibility Lack of New Construction Tenants are seeking growth options in a supply constrained environment At over $3 billion in annual sales, our portfolio is an attractive alternative to lifestyle, strip and power center options 4

6 Strategic Focus Not an occupancy cost story, but a focus on increasing occupancy and sales PSF Internal Growth Drive same property NOI to targeted $200 million in 2016 by executing strategic and capital projects Decentralized marketing approach targets specific demographics of each marketplace Opportunistic and strategic acquisitions which complement our portfolio External Growth Principal focus on middle market, protected and dominant malls Actively engaged with special servicers, private sellers and public REITs De-risk the balance sheet through non-recourse asset level financing Financing Strategy Proactively take advantage of today s low rate environment Extend and ladder debt maturities 5

7 Internal Growth Leasing Fully staffed leasing team with entrepreneurial minded individuals Decentralized approach, as opposed to leasing from the corporate office Focused leasing strategy aimed at bringing back relevance to each asset Entertainment Everyday Uses The level of attention and swift implementation of Rouse s strategic capital projects has been outstanding and has helped Cinemark deliver on our pipeline. This partnership is sure to significantly improve the sales, traffic and the vitality of the malls we are joining. Tom Owens Senior Vice President, Real Estate High Volume Restaurants Big-Box Anchors Sample listing of prospective/current tenants Rouse is a leader in the industry, paying close attention to opportunities for repositioning We at Regal are passionate about providing a superior movie experience in the same way that Rouse shows intense passion for delivering excellent experiences related to shopping, dining and entertainment. Robert Crane Senior Vice President, Real Estate 6

8 Leasing Volume Accelerating Leasing Trends 2,134,827 SF leased in 2012; 133% greater than the 2011 total of 917,995 SF Completed 438 leases and representing 22% of non-anchor GLA Quarterly Leased SF 800, , , , % +231% +175% "It's been very satisfying and quite refreshing to deal with Rouse over the past year. Their entrepreneurial spirit and grand vision for retail properties shows a skill that few developers possess.. John Pawley Senior Vice President, Real Estate 400, , , , % 2011 Q Q Q Q Q Q Q Q4 UNDER ROUSE OWNERSHIP As the fastest growing specialty retailer in the U.S., we rely on great partners like Rouse to assist us in achieving our strategic initiatives. They have established the foundation necessary to become a successful company in the retail real estate industry, and we look forward to partnering with them on numerous deals in the future. Clary H. Groen Vice President of Real Estate and Construction Note: Growth figures reflect quarterly year over year increases. 7

9 Leased Occupancy Portfolio now 90.0% leased excluding anchors and 92.6% leased including anchors Total percentage leased increased 70 bps in Q4 alone and 230 bps since formation Permanent percentage leased increased 430 bps since formation 100% 95% Leased Occupancy % Leased Temporary % Leased Permanent % Leased Total: 230 bps 90% 85% 80% 87.7% 87.5% 13.6% 13.2% 88.4% 12.9% 89.3% 12.3% 90.0% 11.6% % Leased Temporary 1 : 200 bps 75% % Leased Permanent 2 : 70% 65% 74.1% 74.3% 75.5% 77.0% 78.4% 430 bps 60% 2011 Q Q Q Q Q4 (1) Temporary tenants on license agreements with terms in excess of 12 months. (2) All contractual obligations for space in Rouse malls, exclusive of traditional anchor stores and Specialty Leasing. 8

10 Internal Growth Cosmetic Upgrades Improve overall mall experience with upgrades designed to create a sense of place and increase frequency of visits and lengthen duration of stay Chula Vista Center Install state of the art WiFi through each mall Upgrade lighting, interior/exterior signage and common area amenities Create soft seating environments tailored to each mall and market Implement energy management systems to maximize efficiency 9

11 Pierre Bossier Mall Shreveport, LA Before Cosmetic Project Interior improvements included porcelain tile floor, numerous soft seating areas, painting of all common areas, a children s play area and WiFi Exterior improvements include upgraded signage and pylon and two new exterior mall entrances Achieved 8.4% increase in leased percentage (95.5% - Q4 from 87.1% - Q1) After After 10

12 Internal Growth Strategic Capital Lansing Mall Tailored business plans at the individual asset level to increase occupancy and sales per square foot AREA OF FOCUS VACANT ANCHOR Re-configuration, re-development and retenant vacant anchor spaces Existing Site Plan Convert excess in-line space to big-box users Add high-volume restaurants, entertainment and everyday uses Commenced construction on 2 strategic capital projects and expect to commence an additional 3 to 4 in PROPOSED RESTAURANT PROPOSED RESTAURANT PROPOSED RESTAURANT Proposed Site Plan 11

13 Lakeland Square Lakeland, FL Strategic Project AREA OF FOCUS VACANT ANCHOR EXCESS INLINE GLA Current Site Plan Reconfigure vacant anchor and excess unproductive inline space for Cinemark and Sports Authority Addition of two junior anchors resulted in strong inline leasing momentum; Rouse executed 8 new deals totaling over 13,000 SF since Q Closed a new, ten year $65.0 million mortgage at a fixed rate of 4.17% in March 2013 Proposed Site Plan 12

14 External Growth Acquisitions Opportunistic and Strategic Acquisitions Principal focus on dominant malls in protected markets or submarkets One of the few companies with an established and fully developed platform in the middle market sector Closed approximately $175M of acquisitions in 2012, including 2 dominant only game in town enclosed malls and 4 anchor boxes in our existing portfolio Three Primary Sourcing Opportunities Rouse actively engaged with REITs, special servicers and private owners Outsized Returns The current spread between A and B mall pricing presents an opportunity Favorable financing availability Mall at Turtle Creek Jonesboro, AR Grand Traverse Mall Grand Traverse, MI 13

15 Well-Capitalized Balance Sheet Capitalization Highlights ($ in millions) Term Loan / Drawn Revolver $188 Cash and Short -Term Deposits: $57 Total debt of $1.2B The weighted average interest rate improved to 5.18% from 5.55% as of the spin date $1.0B of mortgage debt with a weighted average interest rate of 5.26% and average remaining term of 4.1 years Net Debt: $1,168 Mortgage Debt $1,037 Secured credit facility composed of a $150M revolver (undrawn) and $188M term loan Significant sponsorship support from Brookfield $100M subordinated debt facility Liquidity ($ in millions) Equity 4 $841 (1) Cash and short term deposits as of March 19, (2) In January 2013 the Revolver was increased from $50 million to $150 million. As of March 19, 2013, the Revolver was undrawn. (3) LIBOR (30 day) plus 850 basis points. LIBOR is subject to floor of 1.0%. As of March 19, 2013, the subordinated credit facility was undrawn. (4) Equity based on 49,594,584 shares outstanding and closing stock price of $16.95 as of March 19, Cash and Short-Term Deposits 1 $57 Undrawn Revolver Subordinated Debt Facility Total Liquidity $307 14

16 Debt Profile Highlights Flattened Maturity Ladder Nine securitized mortgages ($514M) are freely prepayable providing optionality All mortgage debt is non-recourse and not crosscollateralized Ability to release malls securing term loan and refinance as NOI improves Annual amortization will contribute to balance sheet deleveraging Amortization Term Loan Balloon Payment Balloon payment ($ in thousands) As of Spin Date $500,000 $400,000 $300,000 $200,000 $100,000 $ As of 3/31/13 (Pro Forma) $500,000 $400,000 $300,000 $200,000 $100,000 $ Source: Company filings, as updated by disclosed subsequent events through March 19,

17 Financing Accomplishments Closed a total of $247.8M of fixed rate mortgage debt in 2012, generating net proceeds of approximately $45.8M Re-priced the $375 million Credit Facility to LIBOR plus 450 basis points with no LIBOR floor Previously priced at 600 bps (500 basis points spread with a 1.0% LIBOR floor) $250,000 $200,000 $150,000 $100,000 $50,000 $0 Financings Completed Since Inception ($ in thousands) $65,000 $51,800 $78,750 $52,310 Mortgage Debt Lakeland Square Mall Animas Valley Mall Southland Center Pierre Bossier Mall /Anchor Term Loan Mortgage Debt Net Proceeds (1) ($ in thousands) Opening Balance (Spin) $ 433,500 $ 782,561 $ - Pierre Bossier Mall (38,220) 48,500 9,900 Southland Center (70,206) 78,750 8,200 Pierre Bossier Anchor 3,810 Animas Valley Mall (37,128) 51,800 14,300 Mall at Turtle Creek 79,521 Amortization/Other (15,603) 12/31/12 Balance $ 287,946 $ 1,029,339 $ 32,400 Term Loan Paydown (100,000) Lakeland Square Mall Payoff (50,297) Lakeland Square Mall New Loan 65,000 13,400 Amortization/Other (7,155) 3/31/13 Pro Forma $ 187,946 $ 1,036,887 $ 45,800 Source: Company filings, as updated by disclosed subsequent events through March 19, (1) Proceeds are shown net of transaction fees and closing costs. 16

18 2013 Guidance The Company provided initial guidance for 2013 Core FFO in the range of $1.49 to $1.55 per diluted share for the year ending December 31, 2013 Represents between a 18% and 23% increase over 2012 Core FFO of $1.26 per share Full year guidance same-property Core NOI growth of 1.75% to 2.5% Excludes the effects of property acquisitions, dispositions, or capital transaction activity completed subsequent to December 31, 2012, except those previously announced and completed 17

19 Experienced Executive Management Team Supported by strong operating platform and aligned with shareholders to drive performance Executive Management Andrew Silberfein President and Chief Executive Officer Prior Relevant Experience Executive Vice President of Retail and Finance at Forest City Ratner Companies Benjamin Schall Chief Operating Officer Senior Vice President of the Retail Division at Vornado Realty Trust John Wain Chief Financial Officer Managing Director and the Head of Real Estate Americas at Credit Agricole Corporate and Investment Bank (formerly Calyon Corporate & Investment Bank) Brian Harper Executive Vice President, Leasing Senior Vice President of Leasing at GGP with executive roles in all retail categories Susan Elman Executive Vice President, General Counsel Senior Vice President and Deputy General Counsel of Forest City Ratner Companies 18

20 Summary Nationally Diversified Portfolio with a Focus on Protected Market Malls Opportunity to Create Value in Existing Portfolio Through Execution of Individually Tailored Strategies for Each Asset Significant External Growth Opportunities Through Disciplined Acquisitions Well-Capitalized Balance Sheet with Strong Sponsorship Support Experienced and Focused Management Team 19