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GGP, Kimco Fall After Cutting Forecasts

General Growth Properties Inc., the second-largest U.S. mall owner, and Kimco Realty Corp., the largest owner of community shopping centers, plunged in New York trading after cutting their earnings forecasts for the year.

General Growth, based in Chicago, cut its forecast for 2008 funds from operations, excluding items, saying it now expects to earn $2.85 to $2.95 a share. It had expected FFO of $3.42 a share. Kimco today forecast 2008 FFO of $2.20 to $2.45 a share, citing ``substantial dislocation in the credit markets and recent turmoil in the equity markets,'' after earlier forecasting a range of $2.70 to $2.78 a share.

Owners of malls and community shopping centers are facing a drop in retail spending as unemployment rises, real estate values fall and the economy weakens. Consumer spending fell 0.3 percent, matching the biggest drop in four years, and the U.S. lost the most jobs in five years in September.

``The consumer is in pain and lacks confidence,'' Kimco Chief Executive Officer Milton Cooper said on a conference call today. ``I think retailers will have a pretty tough 2009 unless there's a new zoom in our economy and the housing market comes back.''

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