By Ilaina Jonas

NEW YORK, Nov 5 (Reuters) - Mall owner General Growth Properties Inc posted lower quarterly results, slashed its full-year forecast and does not expect to pay a dividend in the near term, sending its share down more than 40 percent.
In order to generate much-needed cash, the No. 2 U.S. mall owner has put a number of its prime properties up for sale. It has also cut costs, is selling preferred shares, refinancing properties and eliminated its dividend to help it meet looming debt obligations this year and next.
But it faces high hurdles in the current lending environment, which has hurt property values and made loans to buy property more expensive or impossible to get.
"I don't think we're going to necessarily have one monster transaction that is going to solve all the company's leverage issues," said Adam Metz, General Growth's interim chief executive, in a conference call with analysts.
Chicago-based General Growth also said on Wednesday it made inroads into looming debt obligations, but still faces more than $900 million coming due this month and next.
The company reported third-quarter funds from operations (FFO) of $185.4 million, or 58 cents per share, compared with the 76 cents per share analysts on average had forecast, according to Reuters Estimates.
Focusing only on its retail property business, General Growth reported core FFO of $205.7 million, or 64 cents per share, compared with $200.7 million, or 68 cents a share, when the company recognized a litigation award.
For properties the company has operated for at least a year and consolidated on its balance sheet, net operating income fell 1.8 percent.
Comparable tenant sales on a trailing 12-month basis inched up 0.3 percent, yet sales per square foot fell 0.7 percent. Occupancy at its centers also fell, to 92.7 percent from 93.2 a year earlier.
"Plain and simple, not good," UBS analyst Jeffrey Spector wrote in a research note, adding the bank was placing the company's price target and stock rating under review.
General Growth shares were down $1.89, at $2.60 and were the top percentage loser on the New York Stock Exchange in Wednesday afternoon trading. Year-to-date, the shares are down 94 percent.
General Growth said it recently got a $225 million short- term secured loan, adding to a $1.51 billion secured portfolio facility it arranged in July. That leaves about $900 million of property secured debt, most of which is on its Las Vegas properties -- Fashion Show, Palazzo and Grand Canal Shoppes -- coming due at the end of the month.
"Obviously, we would prefer to sell non-core over core, but we have a significant amount of loan maturities in the next year," Metz said. "It is a big maturity. It is coming up very soon and we think the best thing to do there is do the sale."
The company also has $58 million of corporate debt due around the same time and about $3 billion coming due in 2009.
General Growth lowered its 2008 forecast to core FFO per share in the range of $2.85 to $2.95, down from $3.42, citing lower mall and shopping center operation income, impairments and higher refinancing costs.
Earlier this week, David Simon, chief executive of No. 1 U.S. mall owner Simon Property Group shot down speculation his company would acquire General Growth. But he would not comment as to whether Simon may buy any of the Las Vegas shopping centers.

(Editing by Dave Zimmerman and Andre Grenon) Keywords: GENERALGROWTH/ (ilaina.jonas@thomsonreuters.com; +1 646 223 6193; Reuters Messaging: ilaina.jonas.reuters.com@reuters.net)

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