APM Marketplace reports: American consumers aren't buying much these days. That has been the retail through-line the past couple of years. But somehow there is shopping going on in the shopping mall business. Today, the country's largest mall operator, that's a company named Simon Property, announced a $10 billion offer for its biggest rival, General Growth. General Growth has been operating under the protection of a bankruptcy court since last spring. That tells you something about the overall business environment in retail real estate.But if the deal does go through, Simon would control a third of all the shopping malls in this country.Simon and General Growth are like the Coke and Pepsi of the mall business. They own lots of high-end malls that skew towards Nordstrom rather than Sears. That's why Simon has wanted to buy General Growth since it declared bankruptcy last spring says Ivan Friedman, who runs RCS Real Estate Advisors.Dr. Sam Chandan of Real Capital Analytics says both companies ran their malls well, but the financial crisis affected them differently. Simon Property played it safe. General Growth was caught overextended when the credit markets dried up. "This really is about how it is they made choices about taking on new debt" Chandan says.
Real Capital Analytics, Inc.+1 212-387-7103
2/6/2012 Bloomberg BusinessWeek:Bank of America Tower Selling At Auction February 7
2/1/2012 Retail Traffic:Capital Markets Continuing to Recover
2/1/2012 World Property Channel:Russia Seeks Foreign Investment
1/26/2012 Insurancenewsnet.com:Refinancing in an Interesting Market