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April 17, 2009
General Growth files for bankruptcy protection
The nation's second-largest mall operator filed for Chapter 11 bankruptcy protection after it failed to persuade debt holders to give it more time to refinance.
AP via Crain's NY Business
The nation's second-largest shopping mall owner, General Growth Properties, filed for Chapter 11 bankruptcy protection Thursday in a tough bargaining move to restructure its $27 billion in debt.
...The Chicago-based company is paying the price for its aggressive expansion at the height of the real estate boom. General Growth, like many homeowners during the frenzy, bought several properties at top dollar and now is finding lenders unwilling to refinance.
The real estate crisis has been slow to affect the market for retail, hotels and office buildings. But the delinquency rate for commercial loans, while still relatively low, is creeping up and could deepen the economic recession.
...The company has suspended its dividend, halted or slowed nearly all development projects and cut its work force by more than 20%. It also has sold some of its non-mall assets.
NoLandGrab: "Suspended its dividend, halted or slowed nearly all development projects and cut its work force?" Where have we heard that before?
Crain's Chicago Business, General Growth blames credit crisis, not shopping slowdown
The meltdown in financial markets, not the deep slump in the retail industry, brought General Growth Properties Inc. to its knees Thursday.
...“The reasons for this are unrelated to the performance of the shopping center industry generally,” General Growth CEO Adam Metz wrote in an affidavit filed in U.S. Bankruptcy Court in New York. “Instead, the problem is that virtually every source of commercial real estate financing has dried up, leaving a vastly inadequate supply of credit to meet the demand created by current and upcoming maturities.”
Posted by eric at April 17, 2009 3:54 PM