Investor Presentation September 2015
S&P 500 Real Estate Company Core Values - Humility, Attitude, Do the Right Thing, Together and Own It. Assets Portfolio comprised of high-quality regional malls complemented by flagship urban retail properties Scale 131 properties located coast-to-coast with total enterprise value of approximately $42 billion (a) Team Senior leadership team with nearly 30 years on average of experience in retail leasing, development and management Results FFO per share has grown 13% and dividends have grown 13% on average annually since 2010 a) As of June 30, 2015. 2
National Presence Of the 1,100 malls in the U.S. today, 425 are high-quality - GGP owns ~25% Scale is critical allows retailers, restaurants, and entertainment venues to efficiently expand throughout the U.S. Portfolio Metrics (as of June 30, 2015) Over $20 Billion of Sales Volume 13.2% Occupancy Cost 96% Leased $595 Sales per Square Foot 122 Regional Malls 9 Urban Retail Properties High-quality regional malls are shopping hubs within their trade areas Urban retail assets provide retailers with valuable flagship stores in gateway cities 3
Shopping Centers Shopping center GLA per capita is highest in the U.S. relative to other select countries Expectations for new supply are at historic lows, keeping retailer demand for space in high-quality retail properties high Country Shopping Center GLA (sq ft in millions) Population (millions) GLA per Capita U.S. 7,527 319 24 Canada 542 36 15 U.K. 318 64 5 France 264 64 4 Italy 171 60 3 Spain 142 46 3 Germany 195 80 2 Source: ICSC. 4
Evolution of Brick & Mortar Stores 95% of all retail sales are by retailers with a physical store presence Successful retailers provide customers with ability to shop when and where they want Retailers are embracing Omni-channel to grow revenues and build brand loyalty Traditional on-line retailers are opening physical stores to achieve scale and brand recognition Physical stores represent a powerful point-of-distribution for retailers given nationwide footprint 5
Omni-Channel Generates Higher Sales Source: ICSC. 6
Consumer-Centric Strategy Key Drivers of Consumer Engagement Clothes & Shoes 26% Instant Gratification 13% Dining 12% Discovery 8% Atmosphere 14% Likes the Mall 15% Feel Good 12% Strategic Objectives Curate the Retailer Mix Drives 59% of Overall Consumer Engagement Make Shopping Hassle-Free Drives 41% of Overall Consumer Engagement Increased Patronage Traffic & Sales Trade Area Visitation Conversion & Number of Stores Visited Average Spend, Market Share & Wallet Share Visit Frequency & Duration Likelihood to Return & Recommend 7
Curate the Mall with Brands Shoppers Want 8
Our Focus: Improve Guest Experiences Across the Path-to-Purchase 9
Digital Experience Path-to-Purchase Example 10
Urban Retail Properties Target markets include New York City, Chicago, Miami, Boston, Washington, D.C., San Francisco and L.A. Retailers highly demand and covet flagship/iconic stores in our target markets Generates high sales levels Creates brand value and recognition 730 5 th Avenue, New York City Increases exposure to consumers Our strategy is to acquire assets with significant unrealized growth potential Releasing space at higher market rents Converting space to retail use Leasing vacant space Miami Design District, Miami 11
Urban Retail Properties Nine urban assets acquired since 2013 for $1.65 billion total purchase price at share Expected to generate stabilized yield of 5% to 6% generally within three years of acquisition Chicago San Francisco 1 1 6 New York City 1 Miami Purchase NOI Yield Stabilized Partner Loans Year Price (a) in 2015 (b) NOI Yield (c) Debt (a) Equity (a) Amount (a) Rate 2013 $300 4% 7% $160 $140 $30 5% 2014 650 0% 5% - 6% 340 310 150 7% 2015 710 1% 5% - 6% 490 220 210 10% Total $1,660 1% 5% - 6% $990 $670 $390 9% a) Amounts are at GGP share and stated in millions. Purchase Price excludes costs capitalized subsequent to purchase and reflects partial dispositions. b) Represents 2015 NOI divided by purchase price. c) Represents first year expected stabilized NOI divided by Purchase Price. 12
Urban Retail Properties Case Studies 200 Lafayette, SoHo, New York City Acquired in 2013 for $150 million at 3% yield Fully leased to JCPenney Opportunity to recapture lower floors for retail Leased lower floors to Pirch, expected to open in 2016 Sold office portion in April 2015 for $125 million 15% expected stabilized yield in 2018 830 North Michigan Avenue, Magnificent Mile, Chicago Acquired in 2013 for $166 million at 3% yield 50% leased to Top Shop, Columbia and Ghirardelli Opportunity to lease existing vacancy Leased 60,000 square feet to Uniqlo, expected to open Fall 2015 5% expected stabilized yield in 2016 One Stockton / Stockton & Geary, Union Square, San Francisco Acquired 50% interest in 2013 for $82 million at 4% yield Fully leased to Apple, Bulgari, Loro Piana and Lacoste Opportunity to lease Apple space at higher rents Leased Apple space to T-Mobile 6% expected stabilized yield in 2017 13
Developments (a) $2.4 billion total projected share of cost expected to generate 9% to 11% return on investment (ROI) (b) upon stabilization $440 million complete Over $1 billion under construction and $960 million in pipeline Significant value creation given expected returns and implied value of high-quality regional malls Ala Moana Center Parking Structure Small Shops Park Lane Condo Ala Moana Center Expansion Plan $410 million (at share) expansion/renovation 9% to10% expected return ~$500 million at share of value creation (c) Ala Moana Center Completion a) Projected costs and investments exclude capitalized interest and overhead. b) Return on investment represents first year stabilized cash-on-cost return, based upon budgeted assumptions. c) Value creation based on applying 4% capitalization rate to stabilized first year cash basis expected return on total estimated cost, less total estimated cost. 14
Developments Developments stabilize generally within 12 to 18 months of opening Yields range from 9% to 11% on $2.4 billion total projected costs, at share, with ~85% invested in Class A Malls Status Major Redevelopments Total Projected Share of Cost (a) Expected Return on Investment (b) Expected Stabilization Open $442 12% 2015 Glendale Galleria Fashion Show The Woodlands Under Construction 1,045 8% to10% 4Q 2017 Ala Moana Center Ridgedale Baybrook Southwest Plaza Pipeline 957 8% to10% TBD Norwalk Staten Island Mall Sears Boxes Total $2,444 9% to 11% a) Represents GGP s share of total projected costs. Amounts presented in millions. b) Represents first year stabilized cash on cost return, based upon budgeted assumptions. Actual costs may vary. 15
Annual EBITDA Growth of 4% to 5% Contractual Fixed Increase in Rents 2% - 3% Positive Releasing Spreads 1% Expense Growth (1%) Developments 1.5% Acquisitions 0.5% 16
Earnings Guidance Amounts stated in billions, except per share Full Year 2015 Guidance Full Year 2014 Actual Change Same Store Net Operating Income $2.3 $2.2 4.75% Company Net Operating Income 2.3 2.2 5% Company Earnings Before Interest, Taxes, Depreciation and Amortization 2.1 2.0 5% Company Funds From Operations ( Company FFO ) 1.4 1.3 9% Company FFO per Diluted Share $1.43 $1.32 8% (a) The guidance reflects management s view of current and future market conditions, including assumptions with respect to Same Store NOI growth, rental rates, occupancy levels, retail sales, variable expenses, interest rates and the earnings impact of the events referenced in the Company s 2 nd quarter 2015 earnings press release and previously disclosed. The guidance also reflects management s view of capital market conditions. The estimates do not include possible future gains or losses, or the impact on operating results from other possible future property acquisitions or dispositions or capital markets activity. Earnings per share estimates may be subject to fluctuations as a result of several factors, including any gains or losses associated with disposition activity. By definition, FFO and Company FFO do not include real estate-related depreciation and amortization, provisions for impairment, or gains or losses associated with property disposition activities. This guidance is a forward-looking statement and is subject to the risks and other factors described in the Company s 2 nd quarter 2015 earnings press release and in the Company s annual and quarterly periodic report filed with the Securities and Exchange Commission. Actual results for 2015 could vary materially from the amounts presented if any of management s assumptions are incorrect. Each amount shown represents the approximate midpoint of a range of possible outcomes and reflects management s best estimate of the most likely outcome. Full year 2015 guidance is current as of August 3, 2015, the date of GGP s 2 nd quarter 2015 earnings conference call. For a reconciliation of the non-gaap measures shown to their respective GAAP measure please refer to GGP s 2 nd quarter 2015 earnings release and Supplemental Information available at www.ggp.com and as furnished with the Securities and Exchange Commission. 17
(in millions) Financial Flexibility Financing philosophy Obtain property-secured debt Minimize corporate recourse and cross-collateralization Laddered maturity schedule Adhere to investment-grade secured debt levels upon refinancing Laddered maturities mitigate refinancing risk and earnings volatility (a) $4,000 $3,500 $3,000 4.05% weighted average interest rate 85% of debt is fixed interest rate ~7 year weighted average remaining term $2,500 $2,000 $1,500 $1,000 $500 $0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 a) As of June 30, 2015 and presented at GGP s proportionate share. Maturities in 2022 include $1.05 billion for Ala Moana Center. The maturity ladder schedule assumes maturity extension options are exercised and approved. 18
Limited Exposure to Rising Interest Rates (Amounts stated in millions, except per share) 2016 2017 2018 Fixed Interest Rate Debt: Amount Maturing by Year $241 $557 $306 Interest Rate 4.40% 5.37% 3.72% Current Market Rate (a) 4.25% 4.25% 4.25% Incremental Interest Expense (b) if Current Market Rate Increases 100 bps $2 $(1) $5 Variable Interest Rate Debt (c) Incremental Interest Expense (b) if LIBOR Increases 25 bps 8 8 8 Total Incremental Interest Expense $10 $8 $13 Impact to FFO per share $(0.01) $(0.01) $(0.01) a) Represents management s current estimate of current interest rates for secured borrowing on high-quality malls. b) Incremental Interest Expense related to Fixed Interest Rate Debt assumes the Amount Maturing is refinanced at the beginning of the year at the Current Market Rate plus 100 basis points. The Incremental Interest Expense related to Variable Interest Rate Debt assumes LIBOR increases 25 basis points at the beginning of the year and remains at that level for the entire year. The Total Incremental Interest Expense is not cumulative and only represents the impact in the specific year shown. c) As of June 30, 2015, total outstanding variable rate debt was approximately $3.3 billion. 19
Sustainability Committed to being an environmentally responsible business Concentrated on investments that increase environmental performance in key areas such as: Solar power generation Heating and cooling Lighting Water usage Waste Management Awarded the 2015 GreenStar and recognized as the North American leader in the Retail Large Cap Sector by GRESB in 2014 (a) 20 a) GRESB stands for Global Real Estate Sustainability Benchmark.
Contact Information: Michael Berman Executive Vice President and Chief Financial Officer michael.berman@ggp.com (312) 960-5044 Kevin Berry Vice President Investor Relations kevin.berry@ggp.com (312) 960-5529 FORWARD-LOOKING STATEMENTS Certain statements made in this presentation may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statement are based on reasonable assumption, it can give no assurance that its expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to, the Company's ability to refinance, extend, restructure or repay near and intermediate term debt, its indebtedness, its ability to raise capital through equity issuances, asset sales or the incurrence of new debt, retail and credit market conditions, impairments, its liquidity demands, and economic conditions. The Company discusses these and other risks and uncertainties in its annual and quarterly periodic reports filed with the Securities and Exchange Commission. The Company may update that discussion in its periodic reports, but otherwise takes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise. Investors and others should note that the Company posts this Investor Presentation on the Investors page of its website at www.ggp.com. From time to time, the Company updates the Investor Presentation and when it does, it will be posted on the Investors section of its website at www.ggp.com. It is possible that the updates could include information deemed to be material information. Therefore, the Company encourages investors, the media and others interested in the Company to review the information posted on the Investors section of its website at www.ggp.com from time to time. 21