You know it’s a really bad sign when sales are so slow that the malls are closing up. Unless you hate malls. The company operates malls in 44 states, including Boston’s Faneuil Hall Marketplace. Seems likely that this is only the tip of the iceberg for commercial real estate.
From the Washington Post:
General Growth Properties, the giant shopping mall company whose holdings stretch from Tysons Corner to the planned community of Columbia and Baltimore’s Inner Harbor, announced today that it has sought protection from creditors in bankruptcy court.
The company had been struggling for months to win relief from billions of dollars of debt, much of which is past due.
“All day-to-day operations and business of all of the company’s shopping centers and other properties will continue as usual,” the company said in a news release.
General Growth, based in Chicago, had been trying to sell some of its landmark properties as it asked lenders to forgo debt payments, but amid recession and a credit crunch found little room to maneuver.
The bankruptcy filing could compound the woes of the banks and institutional investors that funded General Growth. By reducing the company’s expenses and potentially slashing the price of its real estate, it could enable General Growth to undercut other owners and operators of shopping malls, contributing to the economy’s downward spiral.