RCA in the commercial property press:

Credit Crunch Hits The Malls

SF Gate reports: Though it came as no surprise to investors, the collapse of General Growth Properties, the nation's second-largest mall owner, has stirred new fears about a coming debacle in commercial real estate. The company, which owns 200 shopping centers encompassing 200 million square feet and 24,000 tenants, filed for bankruptcy protection last week.

With the credit markets virtually shut down, General Growth said it was unable to refinance the $3.3 billion in debt that had already matured or would be due this year. These included loans totaling $900 million on two malls in Las Vegas - Fashion Show and the Shoppes at the Palazzo - that were due to be repaid in November. An additional $6.4 billion in debt matures next year.

The global credit crisis, weakening retail demand and rising unemployment have taken a toll on commercial property around the world. At least $153 billion worth of property is already in distress, according to Real Capital Analytics, a New York research company. Of this, $87.1 billion represents defaulted mortgages, while the rest is outstanding debt from about 40 commercial-property and investment companies that have failed, most of them outside the United States.

In Japan, Australia and Spain, more companies than properties have faltered, said Robert M. White Jr., the president of Real Capital. "Here in the U.S., the majority of the issues are more at the property level than the company level right now," he said.