At the Rouse Co.'s annual meeting yesterday, earnings charts shared the stage with slides of cascading fountains and leggy models vamping for the cameras.
The Columbia-based real estate company wanted to give shareholders a preview of its $250 million expansion and renovation of Fashion Show Mall in Las Vegas. When the expansion is complete in 2003, Fashion Show Mall will boast seven department stores, a Times Square-style marquee for advertising and 1.8 million square feet of retail space. On May 22, Fashion Show will play host to a party to kick off the project.
"We have a front-row seat on Las Vegas Boulevard, known around the world as `The Strip,'" said Rita Brandin, a Rouse vice president and development director. "We offer exposure to fashion and lifestyle before they become mainstream."
Rouse acquired Fashion Show Mall and several other Las Vegas properties when it bought the Howard Hughes Corp. for $520 million in 1996. The properties included Summerlin, a development six miles from The Strip that was once an airfield for Hughes' many planes. Summerlin was named for the eccentric billionaire's grandmother. It has 54,000 residents.
"It took Columbia 15 or 20 years to reach 50,000 residents," said Anthony W. Deering, Rouse's president, chief executive officer and chairman of its board. At Summerlin, according to Rouse statistics, a new family moves in every two hours.
Rouse spent "10 years knocking on doors" before opportunities opened in Las Vegas, Deering said.
Rouse had other good news to share. First-quarter earnings, released Tuesday, beat Wall Street's expectations by 4 cents a share. The company reported overall funds from operations of $63 million, or 82 cents per share, up from $58.4 million, or 72 cents per share, for the first quarter of 1999. Funds from operations measure earning performance for real estate companies.
Rouse's funds from operations for its retail sector in the first quarter of 2000 were $36.8 million, up from $35.8 million in the year-earlier quarter. Office properties saw a gain to $12.6 million, up from $11.2 million a year ago. Community development and land sales totaled $20.5 million, up from $18.9 million a year ago.
In 1999, funds from operations increased to $235.5 million, up from $204.8 million in 1998. The board increased the common stock dividend 10 percent, to 33 cents a share.
Rouse is continuing its efforts to sell off several of its office and industrial properties to raise cash for its $250 million stock buyback plan. So far, it has spent about $50 million to buy 2.2 million shares.
Rouse shares gained 12.5 cents yesterday to close at $24.50.