Can General Growth Keep Gems It Bought With Debt?
Chicago Sun-Times reports: The bankruptcy may remake the nation's mall business and allow Simon to strengthen its position as the No. 1 mall owner, said Dan Fasulo, managing director at real estate research firm Real Capital Analytics.
General Growth's filing is the "beginning of the distress cycle," Fasulo said, and may lead other companies to fail.
The company in October put three Las Vegas properties up for sale: the Fashion Show Mall, the Grand Canal Shoppes and the Shoppes at the Palazzo. Simon's Forum Shops at Caesars is next to the Caesars Palace hotel and casino on the Las Vegas Strip.
The Rouse transaction sealed the company's fate, said Sullivan of Green Street.
General Growth bought Rouse after a bidding contest with Simon, Westfield and others in what was then the largest takeover of a real estate investment trust.
General Growth had chances to refinance since 2004 and didn't take advantage of them, said Sullivan. Now it faces the prospect of emerging from bankruptcy a smaller player in an industry that has consolidated to the point where an "oligopoly" of publicly traded REITs own about 80 percent of the country's malls, he said.
"Bigger is better in the mall business," said Sullivan. "The more malls you own, the stronger the relationship is with your tenants."
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Posted by: Mark Alferman