"Improving what we already own produces the greatest return that's available to us," says CEO John Bucksbaum.

While comparable store sales increased just 0.2% in the second quarter over 2000, General Growth Properties managed to post a 9% increase in funds from operations, continuing a string of more than eight years of consecutive quarterly FFO growth.

General Growth Properties is completing a 110,000-sf, $25-million expansion that is adding a second level, and more than 30 storefronts, to the retail center anchored by Boston Store and Marshall Field's. A grand opening the addition is expected later this month.

"Mayfair is one of the Midwest's most successful shopping centers, and we're making it better," says Bucksbaum, whose REIT's portfolio includes the upscale Northbrook Court mall in Chicago's north suburbs. "Did we have to do this? No. We probably could've left it alone and continued to do $400 per sf in sales, and probably see sales rise year after year."

The expansion space is 91% leased, Bucksbaum reports, and the REIT expects half of the remaining space to be spoken for by year's end.

Mayfair Mall is not the only place General Growth Properties is on a fix-up campaign. Not only is the REIT adding 100,000 sf at Eden Prairie Center in the Minneapolis suburbs, it is renovating the entire existing 900,000-sf center. Bucksbaum says General Growth Properties should achieve an 11% return on its costs of that project, which also is about to see a grand re-opening.

In Tucson, AZ, General Growth is turning the 850,000-sf Park Mall into the 1.3-million-sf Park Place, which is expected to see sales of $440 per sf this year. Bucksbaum says the return on the renovation investment should exceed 12%.