As it moves to rid itself of community centers and other property types in favor of regional malls, Columbus, Ohio-based Glimcher Realty Trust yesterday reported second quarter results, with per-share Funds From Operations higher than pre-announced guidance. The REIT’s FFO per-diluted-share was $0.60 for the second quarter of 2002 and $1.21 for the first six months of 2002, compared to $0.71 and $1.41 for the comparable quarter and six months of 2001. Total FFO increased 2.0% for the first six months to $41.1 million.

Comparable mall store occupancy increased 2.0% to 86.8% from 84.8% at June 30, 2001, and comparable mall store average rents increased 0.4% to $21.89 per sq. ft. Mall store average rents are $23.25 per sq. ft. Regional mall anchor occupancy was 94.7%, compared to 95.7% in 2001, while average anchor rents increased to $5.39 per sq. ft. from $5.35 in the second quarter of 2001. The mall anchor statistics reflect vacancies of approximately 242,000 sq. ft. related to three former Ames leases that had been rejected in March 2002.

Ames’ floundering, as well as other recent plagues among major retail tenants, have played themselves out more widely in Glimcher’s community center portfolio. Seven former Ames store vacancies amounted to approximately 524,000 sq. ft. in leases rejected through March 31, and 164,000 sq. ft. went vacant after the REIT rejected two Kmart leases as of June 30. These goings-on account for the decline in total community center occupancy to 87.0% at June 30, 2002, compared to 93.9% at June 30, 2001; moreover, same-store revenue and net operating income declined 2.9% and 1.0%, respectively. Glimcher estimates an 18-24 month period to re-tenant such spaces.

In the midst of such turmoil, Glimcher is shifting its attention toward malls: "With $65 million in asset sales completed in 2002 and an additional $200 million under contract, we have taken a major step in completing our strategic repositioning to focus on the regional mall portfolio," president Michael P. Glimcher says. " We believe that the quality of our regional mall portfolio, supported by a stronger balance sheet, has us well positioned to focus on FFO growth."

Indeed, during the first six months of 2002, the REIT sold five community centers and one single tenant asset for proceeds of $47.2 million, recognizing a gain of $2.4 million. Meanwhile, on June 11, Glimcher announced that it had terminated a previous contract with a group of private investors and entered into a new contract for the sale of 22 community center and single-tenant assets (approximately 4.2 million GLA) for a purchase price of approximately $200 million, the proceeds from which are expected to pay down debt and fund additional investments in the regional mall portfolio.

Glimcher has also sold two of its Kmart centers, one on June 28 and another on July 2, reducing its exposure from 14 stores in January (when Kmart filed for bankruptcy), to 10 stores that are currently in operation.

In July 2002, Glimcher completed a public offering of 3.45 million common shares resulting in net proceeds of $58.4 million. As of July 25, its mall portfolio GLA totaled 19.7 million sq. ft.; the community center portfolio totaled 10.3 million sq. ft. Glimcher owns or has a joint venture interest in a total of 98 properties in 24 states.