Horizon Group Properties Announces Third Quarter 2001 Results

Nov 14, 2001, 00:00 ET from Horizon Group Properties

    CHICAGO, Ill., Nov. 14 /PRNewswire/ --
 Horizon Group Properties, Inc. (HGP) (NASDAQ:   HGPI), an owner, operator and
 developer of factory outlet and power centers, today announced third quarter
 2001 Funds From Operations (FFO) of ($276,000) or ($.08) per share.  This
 compares to $906,000 or $.27 per share in the same quarter in the prior year.
 Included in FFO for the third quarter of 2001 were penalties and additional
 interest of $291,000 related to the extension of HGP's loan with CDC Mortgage
 Capital, Inc.
     Third Quarter Statistics
           * Portfolio occupancy at the end of the third quarter of 2001
             decreased to 76.5% from 83.3% at the end of the third quarter of
             2000 and from 77.0% at the end of the second quarter of 2001.
             Sixty percent of the year to year decline resulted from tenant
             bankruptcies, including Bugle Boy, Warnaco and Paul Harris.
             Including leases executed by the end of the third quarter, but
             with tenants yet to take occupancy, current working occupancy is
           * Centers showing increases in occupancy included:  Lakeshore
             Marketplace in Norton Shores, Michigan up from 86.5% at the end of
             the third quarter of 2000 to 88.9% at the end of the third quarter
             2001, and, with the addition of Petco, which opened in early
             November 2001, occupancy increased to 94%; Medford, Minnesota, up
             1.3% to 84.2% at the end of the third quarter of 2001 from the end
             of the second quarter of 2001; Tulare, California, up 2.5% during
             the third quarter of 2001 to 96%; and Traverse City, Michigan, up
             to 84.2% from to 77.2 % at the end of the second quarter of 2001.
           * Renewed 132,894 square feet of expiring leases or 64% of lease
           * Executed 52,932 square feet of new leases.
           * New leases executed in the third quarter of 2001 included those
             for clearance centers for Spiegel in Monroe, Michigan and GAP in
             Somerset, Pennsylvania..
           * Same Space Sales for the entire portfolio increased 2.8% for the
             three months ended September 30, 2001 compared to the same quarter
             a year earlier.  For the twelve months ended September 30, 2001,
             Same Space Sales increased 3.6% compared to the same period a year
             earlier.  Same Store Sales for the entire portfolio decreased 7.7%
             for the quarter ended September 30, 2001 and 4.6% for the twelve
             months ended September 30, 2001 compared to the same period a year
             earlier.  Same Space Sales for the twelve months ended
             September 30, 2001 increased 16% at Laughlin, 7.8% at
             Norton Shores, Michigan, 6.4% at Traverse City, Michigan and 7.2%
             at Tulare, California compared to the same period a year earlier.
     Other significant accomplishments during the quarter included:
           * Refinancing Lakeshore Marketplace with a $16 million, 10 year
             fixed rate loan.  The proceeds were used to reduce the outstanding
             balance of the Nomura loan.
           * Completing an extension of the maturity of our Nomura loan, which
             is now held by CDC Mortgage Capital, Inc.  The extended maturity
             date is July 11, 2002 and is secured by our centers in Monroe,
             Michigan, Medford, Minnesota, Laughlin, Nevada and Warrenton,
           * Execution of a contract to sell a 1.4 acre outparcel located at
             Lakeshore Marketplace.  The consideration is $627,000 in cash and
             the assumption by the purchaser of $40,000 in special assessments.
             The sale was completed on November 8, 2001.
     Commenting on the Company's third quarter results, HGP's Chairman,
 President and Chief Executive Officer, Gary J. Skoien, said, "Our revenues
 have been affected by a number of large tenants which have recently filed for
 bankruptcy.  We are moving aggressively to fill the vacated spaces with
 replacement tenants.  A large portion of the decline in revenue is associated
 with the properties which secure the JP Morgan loans.  As was previously
 announced, we have commenced discussions with the goal of restructuring those
     Based in Chicago, Illinois, Horizon Group Properties, Inc. has 11 factory
 outlet centers and one power center in 9 states totaling more than 2.5 million
 square feet.
      Safe Harbor Statement:  The statements contained herein, which are not
 historical facts, are forward-looking statements based upon economic
 forecasts, budgets, and other factors which, by their nature, involve known
 risks, uncertainties and other factors which may cause the actual results,
 performance or achievements of Horizon Group Properties, Inc. to be materially
 different from any future results implied by such statements.  In particular,
 among the factors that could cause actual results to differ materially are the
 following: business conditions and the general economy, competitive factors,
 interest rates and other risks inherent in the real estate business.   For
 further information on factors which could impact the Company and the
 statements contained herein, reference is made to the Company's filings with
 the Securities and Exchange Commission.
                         HORIZON GROUP PROPERTIES, INC.
                            Selected Financial Data
                       (thousands, except per share data)
                                              For the three       For the three
                                               months ended        months ended
                                         September 30, 2001  September 30, 2000
     Total revenue                                    5,658              7,008
     Total expense                                   25,589              7,549
     Gain on sale of real estate                         42                  -
     Minority interests                               2,950                 79
     Net loss                                       (16,939)              (462)
     Net loss per share - basic and diluted           (5.90)             (0.16)
     Funds from operations - diluted                   (276)               906
     Funds from operations per share - diluted        (0.08)              0.27
                                                       As of             As of
                                                September 30,      December 31,
                                                        2001              2000
     Selected balance sheet data:
          Investment in real property                129,280           145,719
          Accumulated depreciation                   (15,517)          (11,916)
          Other assets                                11,283            14,165
          Total assets                               125,046           147,968
          Total mortgage debt                        104,167           104,401
          Other liabilities                            5,969             7,074
          Minority interests                           2,286             5,505
          Shareholders' equity                        12,624            30,988
          Total liabilities and shareholders'
           equity                                    125,046           147,968
     Weighted average shares and units outstanding
      - diluted                                        3,381             3,388
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SOURCE Horizon Group Properties