**EXHIBIT 99.1**

 

**FACTORS AFFECTING FUTURE OPERATING RESULTS**

 

**RISKS RELATED TO REAL ESTATE INVESTMENTS**

 

##### ***We investprimarily in regional mall shopping centers and other retail properties, whichare subject to a number of significant risks which are beyond our control***

Realproperty investments are subject to varying degrees of risk that may affect theability of our retail properties to generate sufficient revenues to meetoperating and other expenses, including debt service, lease payments, capitalexpenditures and tenant improvements, and to make distributions to GGP. Anumber of factors may decrease the income generated by a retail property,including:

•                  the regional andlocal economy, which may be negatively impacted by plant closings, industryslowdowns, adverse weather conditions, natural disasters and other factors;

•                  local real estateconditions, such as an oversupply of, or a reduction in demand for, retailspace or retail goods, and the availability and creditworthiness of current andprospective tenants;

•                  perceptions byretailers or shoppers of the safety, convenience and attractiveness of theretail property; and

•                  the convenience andquality of competing retail properties and other retailing options such as theInternet.

Incomefrom retail properties and retail property values are also affected byapplicable laws and regulations, including tax and zoning laws, and by interestrate levels and the availability and cost of financing.

 

##### ***We depend onleasing space to tenants on economically favorable terms and collecting rentfrom these tenants, who may not be able to pay***

Ourresults of operations will depend on our ability to continue to lease space inour properties on economically favorable terms. If the sales of storesoperating in our centers decline sufficiently, tenants might be unable to paytheir existing minimum rents or expense recovery charges, since these rents andcharges would represent a higher percentage of their sales. If our tenants’sales decline, new tenants would be less likely to be willing to pay minimumrents as high as they would otherwise pay. In addition, as substantially all ofour income is derived from rentals of real property, our income and cashavailable for distribution to our stockholders would be adversely affected if asignificant number of lessees were unable to meet their obligations to us.During times of economic recession, these risks will increase.

 

##### ***Bankruptcy orstore closures of tenants may decrease our revenues and available cash***

Anumber of companies in the retail industry, including some of our tenants, havedeclared bankruptcy or voluntarily closed certain of their stores in recentyears. The bankruptcy or closure of a major tenant, particularly an anchortenant, may have a material adverse effect on the retail properties affectedand the income produced by these properties and may make it substantially moredifficult to lease the remainder of the affected retail properties. Our leasesgenerally do not contain provisions designed to ensure the creditworthiness of thetenant. As a result, the bankruptcy or closure of a major tenant could resultin a lower level of cash available for distribution.

 

##### ***We may benegatively impacted by department store consolidations***

Departmentstore consolidations, such as K-Mart’s pending acquisition of Sears andFederated’s pending acquisition of May Department Stores.  With respect to existing department stores,we may be unable to re-lease this area or to re-lease it on comparable or morefavorable terms.  Additionally,department store closures could result in decreased customer traffic whichcould lead to decreased sales at other stores. Rents obtained from other tenants may also be adversely impacted.  Consolidations may also negatively affectcurrent and future development and redevelopment projects.

 

##### ***It may bedifficult to buy and sell real estate quickly, and transfer restrictions applyto some of our mortgaged properties***

Equityreal estate investments are relatively illiquid, and this characteristic tendsto limit our ability to vary our portfolio promptly in response to changes ineconomic or other conditions. In addition, significant expenditures associatedwith each equity investment, such as mortgage payments, real estate taxes andmaintenance costs, are generally not reduced when circumstances cause areduction in income from the investment. If income from a property declineswhile the related expenses do not decline, our income and cash available fordistribution would be adversely affected. A significant portion of our propertiesare mortgaged to secure payment of indebtedness, and if we were unable to meetour mortgage payments, we could lose money as a result of foreclosure on theproperties by the various mortgagees. In addition, if it becomes necessary ordesirable for us to dispose of one or more of the mortgaged properties, wemight not be able to obtain a release of the lien on the mortgaged propertywithout payment of the associated debt. The foreclosure of a mortgage on aproperty or inability to sell a property could adversely affect the level ofcash available for distribution.

 

1

----

 

**RISKS RELATED TO OUR BUSINESS**

 

##### ***We may acquire ordevelop new properties, and this activity is subject to various risks***

Weintend to continue to pursue development and expansion activities asopportunities arise. In connection with any development or expansion, we willbe subject to various risks, including the following:

•                  we may abandondevelopment or expansion activities;

•                  construction costsof a project may exceed original estimates or available financing, possiblymaking the project unfeasible or unprofitable;

•                  we may not be ableto obtain financing or to refinance construction loans, which generally havefull recourse to us;

•                  we may not be ableto obtain zoning, occupancy or other required governmental permits andauthorizations;

•                  occupancy rates andrents at a completed project may not meet projections and, therefore, theproject may not be profitable; and

•                  we may need anchor,mortgage lender and property partner approvals, if applicable, for expansionactivities.

Ifa development project is unsuccessful, our loss could exceed our investment inthe project.

 

##### ***We may incur coststo comply with environmental laws***

Undervarious federal, state or local laws, ordinances and regulations, a current orprevious owner or operator of real estate may be required to investigate andclean up hazardous or toxic substances released at a property, and may be heldliable to a governmental entity or to third parties for property damage orpersonal injuries and for investigation and clean-up costs incurred by theparties in connection with the contamination. These laws often impose liabilitywithout regard to whether the owner or operator knew of, or was responsiblefor, the release of the hazardous or toxic substances. The presence ofcontamination or the failure to remediate contamination may adversely affectthe owner’s ability to sell or lease real estate or to borrow using the realestate as collateral. Other federal, state and local laws, ordinances andregulations require abatement or removal of asbestos-containing materials inthe event of demolition or some renovations or remodeling and also governemissions of and exposure to asbestos fibers in the air. Federal and state lawsalso regulate the operation and removal of underground storage tanks. Inconnection with the ownership, operation and management of our properties, wecould be held liable for the costs of remedial action with respect to these regulatedsubstances or tanks or related claims.

Eachof our properties has been subjected to varying degrees of environmentalassessment at various times.  However,the identification of new areas of contamination, a change in the extent orknown scope of contamination or changes in cleanup requirements could result insignificant costs to us.

 

##### ***Our Nevadaproperties are vulnerable to special local economic and environmentalconditions***

Weown significant properties in Nevada, including the following: approximately1.0 million rentable square feet of office and industrial space in the LasVegas area; Fashion Show, an approximately 1.8 million square foot regionalshopping center located on “the Strip” in Las Vegas and approximately 6,900saleable acres of development and investment land located primarily inSummerlin.

 

##### ***Lack of water andair quality issues could adversely affect our development activities***

The LasVegas metropolitan area is a desert environment where the ability to developreal estate is largely dependent on the continued availability of water.  The Las Vegas metropolitan area has a limitedsupply of water to service future development, and it may not be successful inobtaining new sources of water.  If newsources of water prove to be inadequate, our development activities could beadversely affected.

The Las Vegas Valley isclassified as a serious PM-10 and serious carbon monoxide nonattainment area bythe U.S. Environmental Protection Agency, or EPA.  Both PM-10 and carbon monoxide are pollutantsfor which the EPA has established National Ambient Air Quality Standards.  The EPA has approved State ImplementationPlans (“SIPs”) submitted by the Clark County Air Quality Management Board foreach pollutant, describing measures to be required to bring the region’s airinto attainment for these pollutants. The SIPs will affect the cost of development, but are not expected tohave a material impact on us.

 

***Location of a radioactive waste repository at Yucca Mountain could havean adverse effect on our properties in the Las Vegas area***

In 2002,the President and Congress approved the Yucca Mountain site in Nevada fordevelopment of a repository site for highly radioactive materials.  Yucca Mountain is located approximately 100miles from Las Vegas.  For the project toproceed, other approvals are necessary, including a license from the U.S.Nuclear Regulatory Commission or NRC. The Department of Energy’s 2003 Strategic Plan, dated September 30,2003, listed the licensing, construction and operation of the repository siteat Yucca Mountain by 2010 as a major goal. In July 2004, the United States Court of Appeals for the D.C. Circuitrejected a number of challenges brought by the State of Nevada, localgovernmental units, environmental groups and trade associations with respect tothe proposed Yucca Mountain repository and invalidated a portion of the EPA’sand NRC’s regulations governing the proposed

 

2

----

 

repository.  The location of a repository site at Yucca Mountaincould have an adverse effect on the Las Vegas economy and on our properties inthe Las Vegas area.

 

***If necessary infrastructure is not developed or maintained in the LasVegas area, our development efforts may be materially delayed or our developmentcosts may materially increase***

Therate of growth in the Las Vegas metropolitan area has been straining thecapacity of the existing infrastructure, particularly schools, water deliverysystems, transportation systems, flood control programs and sewage treatmentfacilities. Federal, state and local government agencies finance theconstruction of infrastructure improvements through various means, includinggeneral obligation bond issues, some of which require voter approval. Thefailure of these agencies to obtain financing for, or to complete,infrastructure improvements could materially delay our development efforts inthe area or materially increase our developments costs through the impositionof impact fees and other fees and taxes, or by requiring us to construct orfund portions of the infrastructure.

Nevada Power Company is theelectric utility provider in Southern Nevada. On September 26, 2003, the U. S.Bankruptcy Court for the Southern District of New York, the court withjurisdiction over Enron Corp.’s Chapter 11 proceedings, entered a judgment infavor of Enron against Nevada Power, its parent company and an affiliate(collectively, the “Utilities”) for damages in an amount of $338 million in adispute involving early termination of electricity supply contracts. OnNovember 6, 2003, the court stayed execution of this judgment pending appeal bythe Utilities. The court required the Utilities to deposit in escrow during thestay $338 million of bonds secured by its assets plus cash to secure payment ofthe judgment. On October 10, 2004, the U.S. District Court for the SouthernDistrict of New York rendered a decision in the Utilities’ appeal and vacatedthe prior judgment entered by the Bankruptcy Court against the Utilities infavor of Enron and remanded the case to the Bankruptcy Court for fact-findingon several issues.

Nevada Power’s parent hasstated that an adverse development with respect to a combination ofuncertainties, including the Enron dispute mentioned above and various othermatters, could adversely affect Nevada Power’s financial position, results ofoperations and liquidity, and could make it difficult for Nevada Power tocontinue to operate outside of bankruptcy. In addition to providingelectricity, Nevada Power constructs infrastructure, such as transformersubstations and distribution lines that serve development and investment landlocated in Summerlin. Any delay or failure of Nevada Power to constructinfrastructure improvements or provide other utility services could materiallydelay our development efforts in the area and materially increase ourdevelopment costs.

 

***Increased availability of gambling outside of Las Vegas could adverselyaffect our properties in the Las Vegas area***

A number ofother states have legalized casino gaming and other forms of gambling.  A number of states have also negotiatedcontracts with Indian tribes under the U.S. Indian Gaming Regulatory Act of1988 that permits gaming on Indian lands. These additional gaming venues create alternative destinations forgamblers and tourists who might otherwise visit Las Vegas.  These gaming venues could have an adverseeffect on the Las Vegas economy and on our properties in the Las Vegas area.

 

##### ***We are in acompetitive business***

Thereare numerous shopping facilities that compete with our properties in attractingretailers to lease space. In addition, retailers at our properties facecontinued competition from discount shopping centers, lifestyle centers, outletmalls, wholesale and discount shopping clubs, direct mail, telemarketing,television shopping networks and shopping via the Internet. Competition of thistype could adversely affect our revenues and cash available for distribution tostockholders.

Wecompete with other major real estate investors with significant capital forattractive investment opportunities. These competitors include REITs,investment banking firms and private institutional investors. This competitionhas increased prices for commercial properties and may impair our ability tomake suitable property acquisitions on favorable terms in the future.

 

##### ***Some of ourpotential losses may not be covered by insurance***

Wecarry comprehensive liability, fire, flood, earthquake, terrorism, extendedcoverage and rental loss insurance on all of our properties. We believe thepolicy specifications and insured limits of these policies are adequate andappropriate. There are, however, some types of losses, including lease andother contract claims, that generally are not insured. If an uninsured loss ora loss in excess of insured limits occurs, we could lose all or a portion ofthe capital we have invested in a property, as well as the anticipated futurerevenue from the property. If this happens, we might nevertheless remainobligated for any mortgage debt or other financial obligations related to theproperty.

Ifthe Terrorism Risk Insurance Act is not extended beyond 2005, we may incurhigher insurance costs and greater difficulty in obtaining insurance whichcovers terrorist-related damages.  Ourtenants may also experience similar difficulties.

 

3

----

 

##### ***We are subject torisks that affect the general retail environment***

Ourconcentration in the regional mall market means that we are subject to factorsthat affect the retail environment generally, including the level of consumerspending, the willingness of retailers to lease space in our shopping centersand tenant bankruptcies. In addition, we are exposed to the risk that terroristactivities, or the threat of such activities, may discourage consumers fromvisiting our malls and impact consumer confidence.

 

##### ***Inflation mayadversely affect our financial condition and results of operations***

Shouldinflation rates increase in the future, we may experience any or all of thefollowing:

•                  Tenant sales maydecrease as a result of decreased consumer spending which could result in lowerpercentage rents;

•                  We may be unable toreplace or renew expiring leases with new leases at higher base and/orpercentage rents; and

•                  We may be unable toreceive reimbursement from our tenants for their share of certain operatingexpenses, including common area maintenance, real estate taxes and insurance.

Inflationalso poses a potential threat to us due to the probability of future increasesin interest rates.  Such increases wouldadversely impact us due to our outstanding variable-rate debt as well as resultin higher interest rates on new fixed-rate debt.

 

**RISKS RELATED TO OUR ORGANIZATIONAL AND FINANCIAL STRUCTURE THAT GIVERISE TOOPERATIONAL AND FINANCIAL RISKS, INCLUDING THOSE DESCRIBED BELOW**

 

##### ***We share controlof some of our properties with other investors and may have conflicts ofinterest with those investors***

Asof December 31, 2004, we owned partial interests in various retail andcommercial properties (referred to in our Annual Report as the UnconsolidatedProperties). We generally make all operating decisions for these properties,but we are required to make other decisions with the other investors who haveinterests in the relevant property or properties. For example, the consent ofcertain of the other relevant investors is required with respect to approvingoperating budgets, refinancing, encumbering, expanding or selling any of theseproperties. We might not have the same interests as the other investors inrelation to these transactions. Accordingly, we might not be able to favorablyresolve any of these issues, or we might have to provide financial or otherinducement to the other investors to obtain a favorable resolution.

Inaddition, various restrictive provisions and rights apply to sales or transfersof interests in our jointly owned properties. These may work to ourdisadvantage because, among other things, we might be required to makedecisions about buying or selling interests in a property or properties at atime that is disadvantageous to us or we might be required to purchase theinterests of our partners in our jointly owned properties.

 

##### ***Bankruptcy ofjoint venture partners could impose delays and costs on us with respect to thejointly owned retail properties***

Thebankruptcy of one of the other investors in any of our jointly owned shoppingcenters could materially and adversely affect the relevant property orproperties. Under the bankruptcy laws, we would be precluded by the automaticstay from taking some actions affecting the estate of the other investorwithout prior approval of the bankruptcy court, which would, in most cases,entail prior notice to other parties and a hearing in the bankruptcy court. Ata minimum, the requirement to obtain court approval may delay the actions wewould or might want to take. If the relevant joint venture through which wehave invested in a property has incurred recourse obligations, the discharge inbankruptcy of one of the other investors might result in our ultimate liabilityfor a greater portion of those obligations than we would otherwise bear.

 

##### ***Our substantialindebtedness could adversely affect our financial health and operatingflexibility***

Wehave a substantial amount of indebtedness. As a result, we are required to usea portion of our cash flow to service principal and interest on our debt, whichwill limit the free cash flow available for other desirable businessopportunities.  Our substantialindebtedness could have important consequences to us including:

•                  limiting ourability to borrow additional amounts for working capital, capital expenditures,debt service requirements, execution of our growth strategy or other purposes;

•                  limiting ourability to use operating cash flow in other areas of our business because wemust dedicate a substantial portion of these funds to service the debt;

•                  increasing ourvulnerability to general adverse economic and industry conditions;

•                  limiting ourability to capitalize on business opportunities, including the acquisition ofadditional properties, and to react to competitive pressures and adversechanges in government regulation;

•                  placing us at acompetitive disadvantage as compared to our competitors that have lessleverage;

•                  limiting our abilityor increasing the costs to refinance indebtedness; and

•                  limiting ourability to enter into marketing and hedging transactions by reducing the numberof counterparties with whom we can enter into such transactions as well as thevolume of those transactions.

 

4

----

 

##### ***We have partnerswho have tax protection arrangements and other tax-related obligations tocertain partners***

Weown properties through partnerships which have arrangements in place thatprotect the deferred tax situation of our existing third party limitedpartners.  Violation of thesearrangements could impose costs on us. As a result, we may****be restrictedwith respect to decisions such as financing, encumbering, expanding or sellingthese properties.

Severalof our joint venture partners are tax-exempt. As such, they are taxable to the extent of their share of unrelatedbusiness taxable income generated from these properties.  As the managing partner in these jointventures, we have obligations to avoid the creation of unrelated businesstaxable income at these properties. Breach of these obligations could impose costs on us.  As a result, we may be restricted withrespect to decisions such as financing and revenue generation with respect tothese properties.

 

***Representatives of the holders of interestsof a contingent stock agreement have asserted that the TRC merger is aprohibited transaction.***

In connection with the acquisition of The Hughes Corporation in 1996, TheRouse Company ("TRC") entered into a Contingent Stock Agreement("CSA") under which TRC agreed to issue a formula-based number ofadditional shares of TRC common stock to holders of interests under the CSA fora period running through December 31, 2009. Under the CSA, TRC cannot enter intoa "prohibited transaction" without consent of a majority of theinterests under the CSA. A "prohibited transaction" includes a mergerthat (1) would render TRC or a successor incapable of, or restricted from,delivering (on a timely basis) freely tradable and readily marketablesecurities comparable to TRC common stock or (2) could reasonably beexpected to have a prejudicial effect on the holders of interests under the CSAwith respect to their non-taxable receipt of securities pursuant to the CSA.

OnOctober 15, 2004, the representatives of the holders of interests under the CSAadvised GGP that they believed that the merger constitutes a "prohibitedtransaction" because, among other reasons, it could reasonably be expectedto have a prejudicial effect on the holders with respect to their non-taxablereceipt of securities pursuant to the CSA.

OnOctober 19, 2004, GGP delivered to the representatives an executed assumptionagreement whereby they agreed, for the benefit of the holders of interestsunder the CSA and the representatives, to perform the CSA as successor to TRC,in the same manner and to the same extent that TRC would be required to performthe CSA if no succession had taken place. Under the assumption agreement, GGPassumed TRC's obligation under the CSA to issue shares of common stock twice ayear to holders of interests under the CSA and the representatives. The amountof shares is based upon a formula set forth under the CSA and upon GGP's stockprice. Such issuances could be dilutive to GGP's existing stockholders. Inaddition, under the assumption agreement, GGP agreed that following theeffective time of the TRC Merger there will not be a prejudicial effect on theholders of interests under the CSA and the representatives with respect to theirnon-taxable receipt of securities pursuant to the CSA as a result of the TRCMerger and that securities delivered pursuant to the CSA will be freelytradable and readily marketable. GGP further agreed to indemnify and holdharmless the holders against losses arising out of any breach by GGP of theforegoing covenants.

GGPbelieves that all applicable requirements of the CSA have been satisfied inconnection with the TRC Merger and that the TRC Merger does not constitute a"prohibited transaction". In order to minimize any uncertainty andany risk of delay in consummation of the merger, on October 19, 2004, GGPfiled an action in Delaware Chancery Court against the representatives and theclass of all holders of interests under the CSA seeking a declaratory judgmentthat the Merger is not a "prohibited transaction".

 

5

----