Glimcher Reports Third Quarter 2008 Results

today announced financial results for the third quarter ended September 30, 2008.  A description and reconciliation of non-GAAP financial metrics is contained in a later section of this press release and references to per share amounts are based on diluted common shares.

"We are pleased with the property operating metrics for the quarter especially during these uncertain economic times," stated Michael P. Glimcher, Chairman of the Board and CEO. "Furthermore, we made tangible progress towards addressing our debt maturities in this challenging credit environment." 

Net loss to common shareholders in the third quarter of 2008 was $(3.4) million, or $(0.09) per share, as compared to a net income available to common shareholders of $46.4 million, or $1.23 per share, in the third quarter of 2007. Included in the third quarter 2007 income was a $48.8 million gain related primarily to two malls sold in the third quarter of 2007.  Funds From Operations ("FFO") in the third quarter of 2008 was $18.8 million compared to $20.2 million in the third quarter of 2007.  On a per share basis, FFO for the third quarter of 2008 was $0.46 per share compared to $0.50 per share in the third quarter of 2007.

For the first nine months of 2008, net loss to common shareholders was $(2.4) million, or $(0.06) per share, compared to a net income of $42.2 million, or $1.14 per share, in the first nine months of 2007.  FFO was $59.2 million, or $1.45 per share, in the first nine months of 2008 compared to $56.3 million, or $1.39 per share, in the first nine months of 2007.

Summary of Financial Results
(unaudited, dollars in thousands except per share amounts) 

• Total revenues of $81.4 million in the third quarter of 2008 were 10.8% greater than total revenues for the third quarter of 2007.  Revenues from Merritt Square Mall, which was acquired in October 2007, drove approximately $2.5 million of increased rental revenue.  Other significant increases in revenue resulted from a $4.7 million increase in outparcel sales and $1.2 million in tenant reimbursement income primarily related to $800,000 from the addition of Merritt Square Mall and higher recoverable expenses.  These increases were partially offset by approximately $800,000 in non-cash write-offs of lease inducements, straight-line receivables and other intangibles related to the Company's Steve & Barry's leases.

• Net loss to common shareholders for the third quarter of 2008 was $3.4 million.  Net income to common shareholders for the third quarter of 2007 was $46.4 million, which included a $48.8 million gain related primarily to the sale of University Mall in Tampa, Florida and Almeda Mall in Houston, Texas.  Other factors contributing to the change in net income were $2.0 million in write-offs of the non-cash revenue items noted above as well as tenant improvements and leasing commissions related to the Company's Steve & Barry's leases and $463,000 decrease in contribution from joint ventures.  These decreases were partially offset by lower interest expense of approximately $900,000.

• Net operating income (“NOI”) for comparable held-for-investment mall properties, including joint venture malls (“Core Malls”), was nearly flat when excluding approximately $200,000 of Steve & Barry's rent reductions in the third quarter of 2008 over the third quarter of 2007.  When including mall properties classified as held-for-sale, NOI decreased approximately 1% for the quarter.

• Core Malls store average rents were $27.07 per square foot at September 30, 2008, an increase of 1% from the $26.78 per square foot at September 30, 2007.  Re-leasing spreads for the leases signed during the third quarter of 2008 were favorable by 19% with base rents averaging over $29 per square foot.  Re-leasing spreads represent the percentage change in base rent for leases signed, both new leases and renewals, to the base rent for comparative tenants for those leases where the space was occupied in the previous twenty-four months.

• Mall store occupancy for our Core Malls at September 30, 2008 was 92.6% compared to 93.5% at September 30, 2007, a decrease of 90 basis points.

• Aggregate sales for Core Malls stores decreased 1.1% to $363 per square foot for the twelve months ending September 30, 2008 compared to $367 per square foot for the twelve months ending September 30, 2007 but did increase by 0.3% compared to the sales for the twelve months ending June 30, 2008.  Aggregate sales represent retail sales for all mall stores of 10,000 square feet or less that reported sales in each respective twelve month period.

• Debt-to-total-market capitalization at September 30, 2008 (including the Company's pro-rata share of unconsolidated real estate entities' debt) was 72.7% based on the common share closing price of $10.44, compared to 67.1% at December 31, 2007 based on the common share closing price of $14.29.  Fixed rate debt represented approximately 83% of the Company's total outstanding borrowings at September 30, 2008.

Status of Debt Maturities and Property Dispositions

Outlook 

The Company now estimates diluted net income per share to be in the range of $0.01 to $0.09 for 2008 and reaffirms FFO per share to be in the range of $2.02 to $2.10 for the year.  For the fourth quarter of 2008, we are now forecasting an average LIBOR rate of approximately 4%, net fee income of $1.0 million and lease termination and outparcel sales income of $500 thousand to $1 million.  Exclusive of the Steve & Barry's lost rent, we are anticipating core mall NOI growth to be negative approximately 1% for the fourth quarter.  Other key assumptions from previous guidance remained unchanged. 

A reconciliation of estimated diluted net income per share to the range of estimated FFO per share for 2008 follows:

* Wholly-owned properties and pro rata share of joint ventures

Funds from Operations and Net Operating Income

This press release contains certain non-Generally Accepted Accounting Principles (GAAP) financial measures and other terms.  The Company's definition and calculation of these non-GAAP financial measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable.  The non-GAAP financial measures referred to above should not be considered as alternatives to net income or other GAAP measures as indicators of our performance.

Funds From Operations is used by industry analysts and investors as a supplemental operating performance measure of an equity real estate investment trust ("REIT").  The Company uses FFO in addition to net income to report operating results.  FFO is an industry standard for evaluating operating performance defined as net income (computed in accordance with GAAP) excluding gains or losses from sales of depreciable property, plus real estate depreciation and amortization after adjustments for unconsolidated partnerships and joint ventures.  FFO does include impairment losses for properties held for use and held for sale. Reconciliations of non-GAAP financial measures to earnings used in this press release are included in the above Outlook section and attached financial tables of the press release.

Net Operating Income (NOI) is used by industry analysts, investors and Company management to measure operating performance of the Company's properties.  NOI represents total property revenues less property operating and maintenance expenses.  Accordingly, NOI excludes certain expenses included in the determination of net income such as property management and other indirect operating expenses, interest expense and depreciation and amortization expense.  These items are excluded from NOI in order to provide results that are more closely related to a property's results of operations. In addition the Company's computation of same mall NOI excludes property bad debt expense, straight-line adjustments of minimum rents, termination income, amortization of market-rent adjustments and income from outparcel sales. We also adjust for other miscellaneous items in order to enhance the comparability of results from one period to another.  Certain items, such as interest expense, while included in FFO and net income, do not affect the operating performance of a real estate asset and are often incurred at the corporate level as opposed to the property level.  As a result, management uses only those income and expense items that are incurred at the property level to evaluate a property's performance.  Real estate asset related depreciation and amortization is excluded from NOI for the same reasons that it is excluded from FFO pursuant to the National Association of Real Estate Investment Trust's definition.

Third Quarter Conference Call

Glimcher's third quarter investor conference call is scheduled for 11 a.m. ET on Thursday, October 23, 2008.  Those wishing to join this call may do so by calling (800) 435.1261   Passcode:  89325903.  This call also will be simulcast and available over the Internet via the web site www.glimcher.com on October 23, 2008 and continue through November 6, 2008.  Supplemental information about the third quarter operating results is available on the Company's web site or at www.sec.gov or by calling (614) 887-5844.

Forward Looking Statements

This news release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, may differ from the results discussed in the forward-looking statements. Risks and other factors that might cause differences, some of which could be material, include, but are not limited to, to changes in political, economic or market conditions generally and the real estate and capital markets specifically; impact of increased competition; availability of capital and financing;  tenant or joint venture partner(s) bankruptcies;  failure to increase mall store occupancy and same-mall operating income;  rejection of leases by tenants in bankruptcy; financing and development risks; construction and lease-up delay; cost overruns; the level and volatility of interest rate; the rate of revenue increases as compared to expense increases; the financial stability of tenants within the retail industry; the failure of the Company to make additional investments in regional mall properties and to redevelop properties; failure to complete proposed or anticipated acquisitions; the failure to sell properties as anticipated and to obtain estimated sale prices;  the failure to upgrade our tenant mix; restrictions in current financing arrangements;  the failure to fully recover tenant obligations for common area maintenance; insurance, taxes and other property expense; the impact of changes to tax legislation and, generally, our tax position; the failure of the Company to qualify as a real estate investment trust; the failure to refinance debt at favorable terms and conditions; an increase in impairment charges with respect to other properties as well as impairment charges with respect to properties for which there has been a prior impairment charge; loss of key personnel; material changes in the Company's dividend rates on its securities or the ability to pay its dividend on its common shares or other securities; possible restrictions on our ability to operate or dispose of any partially-owned properties; failure to achieve earnings/funds from operations targets or estimates; conflicts of interest with existing joint venture partners; changes in generally accepted accounting principles or interpretations thereof; terrorist activities and international hostilities, which may adversely affect the general economy, domestic and global financial and capital markets, specific industries and us; the unfavorable resolution of legal proceedings; the impact of future acquisitions and divestitures; significant costs related to environmental issues, bankruptcies of lending institutions within the Company's construction loans and corporate credit facility as well as other risks listed from time to time in this news release and in the Company's other reports and statements filed with the Securities and Exchange Commission.