Commercial Real Estate Takes a Hit
Note: Register for this month’s CLE, “Real Estate Law: No Commercial Break,” from 1-2 p.m. ET on Wednesday, Jan. 20.
Not so long ago, General Growth Properties Inc. was a classic success story. The company had morphed in 55 years from a family-owned grocery business in Iowa to the second-largest owner of shopping malls in the United States.
The Chicago-based company’s roster of more than 200 malls included such marquee establishments as Water Tower Place on the city’s Magnificent Mile, Faneuil Hall Marketplace in Boston, South Street Seaport in Manhattan and Honolulu’s Ala Moana Center, the largest open-air shopping center in the world. GGP’s annual earnings exceeded $3.3 billion, and its assets were nearly $29.6 billion as of Dec. 31, 2008.
Less than four months later—on April 16, 2009—General Growth Properties filed for bankruptcy.
General Growth Properties owns more than 200 shopping malls in 44 states.
The company had borrowed heavily to finance its expansion, and it was hit hard by the collapse of the real estate market and the freeze in the credit markets that followed.
“The collapse of the credit markets has made it impossible for GGP to refinance our maturing debt outside of Chapter 11,” the company acknowledged in a press release.
Continue reading “The Pain Spreads” at this link in the January ABA Journal.
