The Wall Street Journal looks at how a General Growth bankruptcy could unfold. This is something Retail Traffic explored on a more general level with our February cover story analyzing what large REIT bankruptcies could look like.
From the Journal article:
Now, deep-pocketed buyers are likely to be few and far between given a continuing credit crunch that is stretching the balance sheets and hurting returns for most real estate developers. This could make it more difficult for General Growth to sell its high-quality malls at attractive prices at a time when they'll need to raise a lot of liquidity.
General Growth, the second-largest public mall operator in the U.S., remains in talks with its lenders to extend four loans that are past due. The company has warned in Securities and Exchange Commission filings it might need to seek Chapter 11 bankruptcy protection if it fails to win deadline extensions on maturing loans. That worst-case scenario would rank among the largest real-estate collapses in history.
A Chapter 11 filing would have very little implications for the solvency of General Growth's competitors, but "has the potential to ... create some compelling acquisition opportunities for other retail" real-estate investment trusts, said Steven Marks, head of REITs at Fitch Ratings. He noted the company had about $30 billion in assets as of the end of September.
Past links and stories:
- Feb. 18, 2009, GGP Misses Payments
- Feb. 2, 2009, General Growth Gets Another Extension
- Jan. 5, 2009, GGP Switches Bankruptcy Advisors
- Dec. 30, 2008, GGP Signs Forebearance Agreement
- Dec. 19, 2008, GGP Puts Centers on the Block
- Dec. 18, 2008, General Growth Extension Comes Through
- Dec. 15, 2008, GGP "Continuing its Discussions with Lenders"
- Dec. 14, 2008, Breaking: GGP Refinances
- Dec. 5, 2008, Citi Plays Hardball With GGP
- Dec. 3, 2008, Centro, GGP Find Ways to Hang On
- Dec. 1, 2008, GGP Gets Two Week Extension
- Nov. 25, 2008, Ackman Builds Stake in GGP
- Nov. 20, 2008, General Growth Hires Bankruptcy Advisor
- Nov. 17, 2008, General Growth Downgraded; Feldman to Stop Filing Public Reports
- Nov. 12, 2008, General Growth Roundup
- Nov. 11, 2008, General Growth Warns of Default
- Nov. 5, 2008, GGP, Kimco Fall After Cutting Forecasts
- Nov. 2, 2008, General Growth "Almost Literally Worth Nothing"
- Oct. 17, 2008, Management Changes at GGP
- Oct. 15, 2008, Margin Calls Hit Two More Retail REITs
- Oct. 7, 2008, General Growth Near Bankruptcy?
- Oct. 3, 2008, General Growth CFO Steps Down; Company Suspends Dividend
- Oct. 2, 2008 GGP Under Fire for Inclusion on Short-Sell Ban List
- Oct. 1, 2008, Could General Growth Be Sold?
- Sept. 23, 2008, Short Selling Banned on General Growth
- Sept. 22, 2008, General Growth Strikes Back
- Sept. 16, 2008, General Growth Offers More Recourse
- Aug. 12, 2008, Another Look at GGP's Debt
- Aug. 6, 2008, Analysis of GGP's Debt
- July 25, 2008, Stories With Bigger Implications?
- July 14, 2008, GGP Lines Up New Financing
- April 16, 2008, GGP's Growing Debt Problem