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Article by DailyStocks_admin    (02-28-08 06:46 AM)

CEO, Director John Bucksbaum bought 137,491 shares of GGP stock on 2/14/08 at $36.32. Since November, other insider buys were made between $36.28 and $49.37 by CFO Bernard Freibaum, who bought a total of 103,700 shares; Director Adam S. Metz, who bought 19,000 shares; and Chief Investment Officer Joel Bayer, who bought 10,000 shares.
Also in December, Chief Corporate Development Jean Schlemmer and President & COO, Director Robert A. Michaels sold 75,000 shares and 131,900 shares, respectively around $41.

BUSINESS OVERVIEW

Overview

GGP is a self-administered and self-managed real estate investment trust, referred to as a “REIT.” GGP is a Delaware corporation and was organized in 1986.

Our business is focused in two main areas:


• Retail and Other. includes the operation, development and management of retail and other rental property, primarily shopping centers

• Master Planned Communities. includes the development and sale of land, primarily in large-scale, long-term community development projects in and around Columbia, Maryland; Summerlin, Nevada; and Houston, Texas

Substantially all of our business is conducted through GGP Limited Partnership (“the Operating Partnership” or “GGPLP”). We own one hundred percent of many of our properties and a majority or controlling interest of certain others. As a result, these properties are consolidated under generally accepted accounting principles (“GAAP”) and we refer to them as the “Consolidated Properties.” Some properties are held through joint venture entities in which we own a non-controlling interest (“Unconsolidated Real Estate Affiliates”) and we refer to those properties as the “Unconsolidated Properties.” Collectively, we refer to the Consolidated Properties and Unconsolidated Properties as our “Company Portfolio.”

We generally make all key strategic decisions for our Consolidated Properties. However, in connection with the Unconsolidated Properties, such strategic decisions are made with the respective stockholders, members or joint venture partners. We are also the asset manager for most of the Company Portfolio, executing the strategic decisions and overseeing the day-to-day property management functions, including operations, leasing, construction management, maintenance, accounting, marketing and promotional services. With respect to jointly owned properties, we generally conduct the management activities through one of our taxable REIT subsidiaries (“TRS”). As of December 31, 2007, we managed the properties for 19 of our unconsolidated joint ventures and 11 of our consolidated joint ventures. Our joint venture partners or other third parties managed 12 of our unconsolidated joint ventures and one of our consolidated joint ventures.

On July 6, 2007, we acquired the fifty percent interest owned by New York State Common Retirement Fund (“NYSCRF”) in the GGP/Homart I portfolio of 19 regional shopping malls, one community center and three regional shopping malls owned with joint venture partners pursuant to an election by NYSCRF to exercise its exchange right with respect to its ownership in GGP/Homart I (the “Homart I acquisition” — Note 3). As a result of the purchase, we acquired 100% control of 20 of the 23 properties formerly held by GGP/Homart I and such properties have been fully consolidated into our operations as of the purchase date. The remaining three properties were unconsolidated with respect to GGP/Homart I and, accordingly, are now unconsolidated with respect to the Company.

General Development of Business

Prior to the acquisition of The Rouse Company (the “TRC Merger”) in November 2004, acquisitions had been a key contributor to our growth. Since 2005, with the exception of the Homart I acquisition, acquisitions have been minimal and our operational focus has been on the following:


• Development projects, including new development and redevelopment and expansion of existing properties. In September 2007, we opened Natick Collection in Natick, Massachusetts. Natick Collection, which is the largest mall in New England, is anchored by Nordstrom, Neiman Marcus, JC Penney, Lord & Taylor, Macy’s and Sears and includes retail, dining and recreation. Additionally, we opened The Shops at Fallen Timbers in Maumee, Ohio in October 2007. This open-air center includes approximately one million square feet of retail, dining and entertainment space. Anchors include Dillard’s, JC Penney, Barnes and Noble and a multi-screen theater. In November 2007, we opened Park West in Peoria, Arizona. This open-air shopping, dining and entertainment center is anchored by a 16-screen Harkins Theatre. During 2007, including Natick Collection, The Shops at Fallen Timbers and Park West, we completed 39 projects with total costs of more than $1.16 billion. Unlike prior years when our developments consisted almost exclusively of traditional shopping malls, our current development activity includes alternative uses and densification. Certain of our current developments include residential and hotel space. Development expenditures, including new developments, redevelopments and expansions were approximately $790 million in 2007 and are expected to approximate $2.10 billion in 2008 through 2011.

• Increasing net operating income (“NOI”) at our existing retail operations through proactive property management and leasing and through operating cost reductions. Specific actions to increase productivity of our properties have included changing the tenant mix, increasing alternative sources of revenue and integrating new retail formats such as power, lifestyle and mixed use centers.

• Increasing our international focus, which includes both attracting international retailers into our existing domestic centers and investing in retail properties overseas. At December 31, 2007, we had investments of approximately $237.1 million relating to our joint ventures in Brazil, Turkey and Costa Rica. During 2007 we opened Espark in Eskisehir, Turkey, Bangu Shopping in Rio de Janeiro, Brazil and Santana Parque Shopping in Sao Paulo, Brazil. Our joint venture in Brazil have ownership interests in ten operating retail centers, one third-party management company, and four retail centers under development and our joint ventures in Turkey own a third party management company, one operating retail center and two retail centers under development.

• Management and refinancing of our current debt.

Financial Information About Industry Segments

Reference is made to Note 16 for information regarding our segments.

Narrative Description of Business

Retail and Other Segment

Our Retail and Other segment consists of retail centers, office and industrial buildings and mixed-use and other properties.

Retail Portfolio

The Retail Portfolio is comprised primarily of regional shopping centers, but also includes festival market places, urban mixed-use centers and strip/community centers. Most of our shopping centers are strategically located in major and middle markets where they have strong competitive positions. Most of these properties contain at least one major department store as an Anchor. As of December 31, 2007, we had ownership interest in or management responsibility for a portfolio of over 200 regional shopping malls in 45 states. We also own non-controlling interests in various international joint ventures in Brazil, Turkey and Costa Rica. We believe the Retail Portfolio’s geographic diversification should mitigate the effects of regional economic conditions and local factors.

A detailed listing of the principal properties in our Retail Portfolio is included in Item 2 of this Annual Report.

The majority of the income from the properties in the Retail Portfolio is derived from rents received through long-term leases with retail tenants. These long-term leases generally require the tenants to pay base rent which is a fixed amount specified in the lease. The base rent is often subject to scheduled increases during the term of the lease. Another component of income is overage rent. Overage rent is paid by a tenant generally if its sales exceed an agreed upon minimum amount. Overage rent is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease, the majority of which is earned in the fourth quarter. Our leases include both a base rent component and a component which requires tenants to pay amounts related to all, or substantially all, of their share of real estate taxes and certain property operating expenses, including common area maintenance and insurance. The portion of these leases attributable to real estate tax and operating expense recoveries are recorded as “Tenant recoveries.”

As of December 31, 2007, our largest tenant (based on common parent ownership) accounted for approximately 4% of consolidated rents.

Other Office, Industrial and Mixed-Use Buildings

Office and other properties are located primarily in the Baltimore/Washington, D.C. and Las Vegas markets or are components of large-scale mixed-use properties (which include retail, parking and other uses) located in other urban markets. Including properties adjacent to our retail centers, we own approximately eight million square feet of leasable office and industrial space.

Other Business Information

Competition

The nature and extent of the competition we face varies from property to property within each segment of our business. In our Retail and Other segment, our direct competitors include other publicly-traded retail mall development and operating companies, retail real estate companies, commercial property developers and other owners of retail real estate that engage in similar businesses.

Within our Retail Portfolio, we compete for retail tenants. We believe the principal factors that retailers consider in making their leasing decision include:


• Consumer demographics

• Quality, design and location of properties

• Total number and geographic distribution of properties

• Diversity of retailers and anchor tenants at shopping center locations

• Management and operational expertise

• Rental rates

Based on these criteria, we believe that the size and scope of our property portfolio, as well as the overall quality and attractiveness of our individual properties, enable us to compete effectively for retail tenants in our local markets. Because our revenue potential is linked to the success of our retailers, we indirectly share exposure to the same competitive factors that our retail tenants experience in their respective markets when trying to attract individual shoppers. These dynamics include general competition from other regional shopping centers, including outlet malls and other discount shopping centers, as well as competition with discount shopping clubs, catalog companies, internet sales and telemarketing.

We also compete to acquire land for new site development and to acquire existing retail properties. We believe that we have a competitive advantage with respect to acquisitions for the following reasons:


• Subject to certain limitations, the funds necessary for cash acquisitions are available to us from a combination of sources, including mortgage or unsecured financing, joint venture equity, the issuance of company level public or private debt, equity or hybrid securities.

• We have the flexibility to pay for an acquisition with a combination of cash, GGP equity securities or common or preferred units of limited partnership interest in the Operating Partnership. This last approach may create the opportunity for a tax-advantaged transaction for the seller.

• Our expertise allows us to evaluate proposed acquisitions of existing retail properties for their increased profit potential through expansion, remodeling, re-merchandising and more efficient management of the property.

With respect to our office and other properties, we experience competition in the development and management of our properties similar to that of our Retail Portfolio. Prospective tenants generally consider quality and appearance, amenities, location relative to other commercial activity and price in determining the attractiveness of our properties. Based on the quality and location of our properties, which are generally in urban markets or are concentrated in the commercial centers of our master planned communities, we believe that our properties are viewed favorably among prospective tenants.

In our Master Planned Communities segment, we compete with other landholders and residential and commercial property developers in the development of properties within the Baltimore/Washington, D.C., Las Vegas and Houston markets. Significant factors affecting our competition in this business include:


• The size and scope of our master planned communities

• The recreational and cultural amenities available within the communities

• The commercial centers in the communities

• Our relationships with homebuilders

• The proximity to major metropolitan areas

We believe our projects offer significant advantages when viewed against these criteria.

CEO BACKGROUND

Jean Schlemmer has served as Executive Vice President, Asset Management of the Company from April 2000 to December 2005, and has served as Chief Corporate Development Officer since January 1, 2006. In addition, Ms. Schlemmer has served and continues to serve as an officer of various of our subsidiaries and joint ventures.

Charles Lhotka has served as Chief Administrative Officer of the Company since 2005, Senior Vice President, Asset Management Administration of the Company from 2000 to 2005. Mr. Lhotka has been with the Company since 1974.

Daniel Sheridan has served as Executive Vice President, Asset Management of the Company since August 2004, Executive Vice President, Chief Administrative Officer from June 2003 to August 2004, and Chief Change and Administrative Officer from May 2002 to June 2003.

Joel Bayer has served as Senior Vice President and Chief Investment Officer of the Company since 2001, and Senior Vice President—Acquisitions of the Company from 1998 to 2001. Mr. Bayer previously served as an officer of various of our subsidiaries and joint ventures. Mr. Bayer is a director of Hillcrest Bank Florida.

Alexander Berman has served as Senior Vice President, GGP International of the Company since 2005, Senior Vice President, GGP Ventures of the Company from 2002 to 2005, and Senior Vice President, Capital Markets and Finance from 1999 to 2002.

Thomas D’Alesandro has served as Senior Vice President of Master Planned Communities from the time he joined the Company in April 2005 through December 2005, and has served as Senior Vice President, Development since January 1, 2006. From 2003 to April 2005, Mr. D’Alesandro was President and Chief Executive Officer of The Woodlands Development Company, a privately-held developer of a master planned community in Texas in which we have an ownership interest. Mr. D’Alesandro was Vice President of Terrabrook and General Manager of its Eastern Region from 1997 to 2003 where he was responsible for developing Reston, Virginia, a 7,400 acre master planned community.

Ronald Gern has served as Senior Vice President and Assistant Secretary of the Company, and as our general counsel, since December 1997. In addition, Mr. Gern has served and continues to serve as an officer of various of our subsidiaries and joint ventures. Mr. Gern is a member and former Chairman of the ICSC Law Conference Program Committee and a member of the American College of Real Estate Lawyers.

Melinda Holland has served as Senior Vice President, Business Development of the Company since 2000. Ms. Holland has been with the Company since 1995 and has held several positions in various areas of the Company, including Specialty Leasing, Strategic Partnerships and Asset Management.

Edmund J. Hoyt has served as Senior Vice President and Chief Accounting Officer of the Company since 2000. Mr. Hoyt has been with the Company since 1986 and has held a variety of positions in financial planning, accounting and controllership roles.

Sharon Polonia has served as Senior Vice President, Asset Management of the Company since 2000. Ms. Polonia has been with the Company since May 1998 and has held several positions in a variety of asset management and leasing roles.

Warren Wilson has served as Senior Vice President, Development of the Company, since January 2006 and Vice President and Director, New Business from January 2002 to January 2006.

Robert Wyant has served as Senior Vice President, Asset Management of the Company since 2000. Mr. Wyant has been with the Company since January 1997 and has held several positions in a variety of asset management and leasing roles.

SHARE OWNERSHIP

(1) B ased on the holder’s amendment to Schedule 13G dated February 9, 2007 which discloses that these shares are held by the reporting person solely in its capacity as trustee of trusts. The beneficiaries of the trusts are members of the Bucksbaum family which, for purposes hereof, include the spouses and descendents of Martin, Matthew and Maurice Bucksbaum, including John Bucksbaum, Chief Executive Officer and a director of the Company. Included in the number of shares beneficially owned are 45,356,493 shares of common stock issuable upon conversion of limited partnership units in the Operating Partnership, as described under “Certain Relationships and Related Party Transactions.” These units are owned by a partnership whose general partners include various trusts for which General Trust Company serves as trustee , the beneficiaries of which are the same as described above in this footnote.

(2) Based on the holder’s amendment to Schedule 13G dated February 14, 2007 which reports the beneficial ownership of 27,816,111 shares by it and certain affiliated entities and individuals, with sole voting power with respect to 1,625,347 of those shares and sole investment power with respect to all 27,816,111 shares.

MANAGEMENT DISCUSSION FROM LATEST 10K

Overview — Retail and Other Segment

Our primary business is acquiring, owning, managing, leasing and developing retail rental property, primarily shopping centers. The majority of our properties are located in the United States, but we also have retail rental property operations and property management activities (through unconsolidated joint ventures) in Brazil and Turkey.

We provide on-site management and other services to substantially all of our properties, including properties which we own through joint venture arrangements and which are unconsolidated for GAAP purposes. Our management operating philosophies and strategies are generally the same whether the properties are consolidated or unconsolidated. As a result, we believe that financial information and operating statistics with respect to all properties, both consolidated and unconsolidated, provide important insights into our operating results. Collectively, we refer to our Consolidated and Unconsolidated Properties as our “Company Portfolio” and the retail portion of the Company Portfolio as the “Retail Company Portfolio.”

We seek to increase cash flow and real estate net operating income of our retail and office rental properties through proactive property management and leasing (including tenant remerchandising), operating cost reductions, physical expansions, redevelopments and capital reinvestment. Some of the actions that we take to increase productivity include changing the tenant mix, adding vendor carts or kiosks and full expansions or renovations of centers.

We believe that the most significant operating factor affecting incremental cash flow and real estate net operating income is increased rents earned from tenants at our properties. These rental revenue increases are primarily achieved by:


• Renewing expiring leases and re-leasing existing space at rates higher than expiring or existing rates

• Increasing occupancy at the properties so that more space is generating rent

• Increased tenant sales in which we participate through overage rents

The expansion and renovation of a property may also result in increased cash flows and operating income as a result of increased customer traffic, trade area penetration and improved competitive position of the property. As of December 31, 2007, we had nine major approved redevelopment projects underway.

We also develop retail centers from the ground-up. In October 2007 we opened The Shops at Fallen Timbers in Maumee, Ohio. This open-air center includes approximately one million square feet of retail, dining and entertainment space. Anchors include Dillard’s, JC Penney, Barnes and Noble and a multi-screen theater. In November 2007, we opened Park West in Peoria, Arizona. This open-air shopping, dining and entertainment center is anchored by a 16-screen Harkins Theatre. Also, during 2007 we opened Gateway Overlook in Columbia, Maryland; Espark in Eskisehir, Turkey; Bangu Shopping in Rio de Janeiro, Brazil and Santana Parque Shopping in Sao Paulo, Brazil.

Eight significant new retail development projects are currently under construction, and are expected to open in 2008 through 2010:

Consolidated Properties:


• Elk Grove Promenade in Elk Grove, California

• The Shops at La Cantera in San Antonio, Texas

• Vista Commons in Las Vegas, Nevada

Unconsolidated Properties:


• Boulevard in Belo Horizonte, Brazil

• Caxias in Rio de Janeiro, Brazil

• Echelon in Las Vegas, Nevada

• Pinnacle Hills South in Rogers, Arkansas

• RiverCrossing in Macon, Georgia

Total expenditures (including our share of the Unconsolidated Real Estate Affiliates) for these redevelopment and development projects were approximately $790 million as of December 31, 2007.

We also have six other planned new retail or mixed-use developments and seven planned expansion and redevelopment projects.

Overview — Master Planned Communities Segment

Our Master Planned Communities business consists of the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada. Residential sales include standard, custom and high density (i.e. condominium, town homes and apartments) parcels. Standard residential lots are designated for detached and attached single- and multi-family homes, ranging from entry-level to luxury homes. At our Summerlin project, we have further designated certain residential parcels as custom lots as their premium price reflects their larger size and other distinguishing features including gated communities, golf course access and higher elevations. Commercial sales include parcels designated for retail, office, services and other for-profit activities, as well as those parcels designated for use by government, schools and other not-for-profit entities.

Revenues are derived primarily from the sale of finished lots, including infrastructure and amenities, and undeveloped property to both residential and commercial developers. Additional revenues are earned through participations with builders in their sales of finished homes to homebuyers. Revenues and net operating income are affected by such factors as the availability to purchasers of construction and permanent mortgage financing at acceptable interest rates, consumer and business confidences, regional economic conditions in the areas surrounding the projects, levels of homebuilder inventory, other factors affecting the homebuilder business and sales of residential properties generally, availability of saleable land for particular uses and our decisions to sell, develop or retain land.

Our primary strategy in this segment is to develop and sell land in a manner that increases the value of the remaining land to be developed and sold and to provide current cash flows. Our Master Planned Communities projects are owned by taxable REIT subsidiaries and, as a result, are subject to income taxes. Cash requirements to meet federal income tax requirements will increase in future years as we exhaust certain net loss carry forwards and as certain master planned community developments are completed for tax purposes and, as a result, previously deferred taxes must be paid. Such cash requirements could be significant. Additionally, revenues from the sale of land at Summerlin are subject to the Contingent Stock Agreement as more fully described in Note 14.

The pace of land sales for standard residential lots has declined in recent periods. We expect diminished demand for residential land to continue into 2008. Based on the results of our evaluations for impairment (Note 2), we recognized a non-cash impairment charge of $127.6 million in 2007 related to our Columbia and Fairwood properties in our Master Planned Communities segment.

MANAGEMENT DISCUSSION FOR LATEST QUARTER

Overview
Our primary business is acquiring, owning, managing, leasing and developing retail rental property, primarily shopping centers. The majority of our properties are located in the United States, but we also have retail operations and property management activities, through unconsolidated joint ventures, in Brazil and Turkey. Our Master Planned Communities segment includes the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada.
Real estate property net operating income for the three months ended September 30, 2007 increased $75.1 million, which was attributable to a $69.0 million increase in our NOI from our Retail and Other segment and a $6.1 million increase in our NOI in our Master Planned Communities segment.
Retail operating metrics continued to improve during the quarter. Sales per square foot (on a trailing twelve month basis) increased 2.4% over the third quarter of 2006 to $461. Occupancy in our Retail Company Portfolio increased to 93.2% at September 30, 2007, compared to 92.4% at September 30, 2006.
In our Master Planned Community segment, the sales pace of land for standard residential lots has declined in recent months. We expect an absence of demand for residential land to continue for the balance of 2007.
Effective January 1, 2007, Rouse Property Management, Inc., a taxable REIT subsidiary of TRCLP, was merged into GGMI, a taxable REIT subsidiary of GGPLP. The transfer combines substantially all of our domestic management activities into a single TRS, but is not expected to have a significant impact on our results of operations.
We also restructured an additional TRS effective March 31, 2007. Through a series of transactions, a private REIT owned by GGPLP was contributed to TRCLP and that additional TRS became a qualified REIT subsidiary of that private REIT. This transaction resulted in approximately a $330 million decrease in our net deferred tax liabilities, an approximate $30 million increase in our current taxes payable and an approximate $300 million income tax benefit related to the properties now owned by that private REIT.
During the three months ended September 30, 2007, we completed the Homart I acquisition (Note 1). This acquisition is expected to have a neutral impact on future earnings as the increased net income from the additional ownership in the properties is expected to be offset by a reduction of fees for development, asset management and leasing in addition to an increase in interest expense related to the additional debt obtained to finance the acquisition. This acquisition changes a number of consolidated revenue and expense items below, as the acquisition resulted in the consolidation of the operations of the properties acquired. Historically, the Company’s share of such operations was reflected as equity in income of Unconsolidated Real Estate Affiliates. Segment operations also were impacted by the Homart I acquisition as an additional 50% share of the operations of the properties are included in the segment results after the purchase date. Accordingly, discussion of the operational results below has been limited to only those elements of the operating trends that are not a function of the Homart I acquisition.
In addition, during the nine months ended September 30, 2007 we acquired the minority ownership interest in two operating properties for a purchase price of approximately $13 million, four former Mervyn’s department stores for an aggregate purchase price of approximately $18 million, and contributed approximately $91.4 million to our Brazilian joint venture for additional construction and acquisition purposes.

GENERAL GROWTH PROPERTIES, INC.
Development activity remained strong in the quarter. As of September 30, 2007, we had eight redevelopment projects under construction each with budgeted projected expenditures in excess of $25 million, 16 new development projects under construction each with forecasted costs in excess of $15 million and 11 additional major planned developments. Developments in progress as reflected on our Consolidated Balance Sheets, plus our share of Unconsolidated Properties, were approximately $1.4 billion at September 30, 2007. Future approved development spending is approximately $2.0 billion and is expected to be expended between 2007 and 2012.
Seasonality
Although we have a year-long temporary leasing program, occupancies for short-term tenants and, therefore, rental income recognized, are higher during the second half of the year. In addition, the majority of our tenants have December or January lease years for purposes of calculating annual overage rent amounts. Accordingly, overage rent thresholds are most commonly achieved in the fourth quarter. As a result, revenue production is generally highest in the fourth quarter of each year.
Critical Accounting Policies
Critical accounting policies are those that are both significant to the overall presentation of our financial condition and results of operations and require management to make difficult, complex or subjective judgments. Our critical accounting policies as discussed in our Annual Report have not changed during 2007 and such policies are incorporated herein by reference.
Results of Operations
Three Months Ended September 30, 2007 and 2006
We have presented the following discussion of our results of operations on a segment basis under the proportionate share method. Under the proportionate share method, our share of the revenues and expenses of the Unconsolidated Properties are combined with the revenues and expenses of the Consolidated Properties. In addition, other revenues are increased by the real estate net operating income of discontinued operations, if applicable, and are reduced by our consolidated minority interest venturers’ share of real estate net operating income. See Note 10 for additional information including reconciliations of our segment basis results to GAAP basis results. In addition, as disclosed in the overview section above, as the Homart I acquisition changes all of segment-based revenue and expense items for the three months ended September 30, 2007 as compared to the three months ended September 30, 2006, the discussion of operations has been limited to only those items impacting revenue and expense in addition to the Homart I acquisition effects.

Higher effective rents, retail center occupancy and leased area across the portfolio contributed to the increase in minimum rents for the three months ended September 30, 2007. Retail center occupancy, excluding international properties and properties in redevelopment, was 93.2% at September 30, 2007 as compared to 92.4% at September 30, 2006. Mall and freestanding GLA for the retail properties, excluding international properties and properties in redevelopment, increased to 62,683,640 square feet at September 30, 2007 compared to 60,513,962 square feet at September 30, 2006.
Historically, our leases have included both a base rent component and a component which requires tenants to pay amounts related to all, or substantially all, of their share of real estate taxes and certain property operating expenses, including common area maintenance and insurance. The portion of these leases attributable to real estate tax and operating expense recoveries are recorded as “Tenant recoveries”. Recently, however, we have been structuring our new tenant leases such that, although these leases still contain a minimum rent and a tenant recovery component, a higher proportion of our rental revenues represent operating expense recoveries. This change has resulted in a shift between minimum rents and tenant recoveries.
The Grand Canal Shoppes and Fashion Show had increased overage rents as a result of increased sales in the third quarter 2007 compared to the third quarter 2006.
Other revenues include all other property revenues including vending, parking, sponsorship and advertising revenues, less NOI of minority interests in consolidated joint ventures. Other revenue is comparable to the prior period.
Real estate taxes increased for the three months ended September 30, 2007 as compared to the three months ended September 30, 2006 partially due to a $1.6 million increase at Glenbrook Square resulting from a higher tax assessment and a $1.2 million increase Stonestown Galleria as the result of revised prior period assessments.
Other property operating costs increased primarily due to a $3.0 million increase in our Brazil joint venture primarily related to acquisitions. In addition, $1.2 million of additional operating expenses were incurred at Riverwalk Marketplace due to additional ground rent participation expense which is based on increased cash receipts. Such increases were partially offset by decreased property operating expenses across the remainder of the portfolio.
The provision for doubtful accounts increased primarily due to increased provisions at Riverwalk Marketplace, North Star Mall and Ala Moana Center. Such increases were partially offset by a decrease in the provision at Oakwood Center, which re-opened in October 2007 after being redeveloped (Note 8).

Although land sales and real estate property net operating income increased for the three months ended September 30, 2007 as compared to September 30, 2006, the national housing market continues to be weak with an absence of demand for residential land expected for the remainder of 2007.
The increase in land sales is primarily attributed to the timing of land sales at our Woodlands community, which resulted in an increase in NOI of $6.4 million. The number of residential and commercial acres sold at our Woodlands community increased to 151.4 acres for the three months ended September 30, 2007 from 98.8 acres for the three months ended September 30, 2006. In addition, the Summerlin community increased NOI by $2.9 million for the three months ended September 30, 2007 as compared to the three months ended September 30, 2006. Such increases were partially offset by decreases in NOI at our Columbia and Fairwood communities of approximately $3.5 million.

Changes in consolidated tenant rents (which includes minimum rents, tenant recoveries and overage rents), land sales, property operating expenses and land sales operations were attributable to the same items discussed above in our segment basis results.
Management and other fees, property management and other costs and general and administrative in the aggregate represent our costs of doing business and are generally not directly property-related costs. Management and other fees were relatively consistent compared to the third quarter of 2006. Property management and other costs increased slightly primarily as a result of higher personnel and personnel-related costs in 2007. The increase was attributable to higher incentive compensation costs and an increase in the number of employees. The decrease in general and administrative is due to a reduction of professional fees in the third quarter 2007.
The increase in interest expense is primarily due to an increase in both fixed and variable rate debt in the third quarter of 2007, which was primarily a result of the funding of acquisition debt ($750 million) and the assumption of debt ($1.04 billion) related to the Homart I acquisition.
The increase in provision for income taxes was primarily the result of the recognition of potential interest expense and penalties related to unrecognized tax benefits recorded as the result of the adoption of FIN 48 (Note 5).
The decrease in equity in income (loss) of Unconsolidated Real Estate Affiliates is primarily the result of an accrual of the Company’s 50% share of the verdict that was recorded by GGP/Homart II (Note 3) during the third quarter 2007.

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