"General Growth files for Chapter 11 bankruptcy protection
General Growth Properties filed for bankruptcy Thursday morning, the largest real estate victim of the global credit crisis. Seized-up credit markets have prevented the company from refinancing its $25 billion in debt, much of which comes due next year. The bankruptcy follows months of negotiations with bond holders, who possess some $2.25 billion of its debt.
The filing will result in the sale of some assets, some analysts predict, but otherwise it will be business as usual at General Growth’s more than 200 malls in 44 states. Moreover, General Growth's third-party mall management division is not part of the bankruptcy filing.
"Our shopping centers and other properties will continue to offer the same great visitor experience for which our company is so well known," said Adam Metz, CEO, in a prepared statement. "We don't expect any of our visitors to notice any difference in our quality of service to customers. Our tenant retailers, restaurants, movie theaters and everyone at our malls stand ready to serve you just as we have in the past."
General Growth’s portfolio include some of the highest regarded malls in the U.S., including the Grand Canal Shoppes at the Venetian and the Fashion Show Mall, bothin Las Vegas, Ala Moana Center in Honolulu and Water Tower Place in Chicago.
The company began as a family-run grocery business in Iowa. Founders Matthew and the late Martin Bucksbaum got into the mall business almost by accident when in 1954 the landlord for one of their grocery stores found itself unable to complete a shopping center in Cedar Rapids, Iowa.
The company went public in 1993 and grew into the second-largest retail real estate firm in the U.S. under John Bucksbaum, Matthew’s son. Today its properties are host to 24,000 stores.
While the bulk of General Growth’s portfolio consists of conventional malls, it has been at the leading edge of innovation in the industry, adding residential units to malls as it did at the architecturally stunning Natick Mall, outside Boston, and building outdoor lifestyle extensions onto others. The Bucksbaum family has also been a strong supporter of the industry by, among other things, funding real estate educational programs through ICSC and through universities. They have also been avid supporters of the arts.
Some analysts predict that after selling some assets, General Growth will emerge from bankruptcy and continue to operate, albeit as a smaller company". (Commento di ICSC - International Council of Shopping Centers)
