General Growth Properties, a nationwide owner and manager of shopping malls, said in a Securities and Exchange Commission filing that it might be forced to file for Chapter 11 bankruptcy if it could not refinance nearly $1 billion in debt coming due in December.
It owns four shopping malls in South Florida:
- Bayside Marketplace in Miami
- Village of Merrick Park in Coral Gables
- Pembroke Lakes Mall in Pembroke Pines
- Mizner Park in Boca Raton
General Growth (NYSE: GGP) shares fell 14 cents on Wednesday to close at a new low of 35 cents after Standard & Poor’s said it was dropping it from the S&P 500.
In addition to the nearly $1 billion due in December, it has more than $3 billion coming due in 2009, a legacy from General Growth’s 2004 purchase of the Rouse Co. for $7.2 billion plus $5.4 billion of assumed debt.
Bill Hemingway, managing director of Integra Realty resources’ Miami office, said General Growth’s local mall properties may not be performing poorly, even though retailing in general is down.
“I don’t think the properties will go dark, but there may be some rent adjustments in the near future because of the expected poor Christmas season,” he said. “It would have to be on an area-by-area and property-by-property basis.”
He added that General Growth’s over-leveraged debt strategy appears to be backfiring in the current retail and debt climate.
source: South Florida Business Journal
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