Pre-bankruptcy, General Growth Properties refused to sell properties at discounted prices. From an April 27, 2009 Bloomberg story:
Simon Property Group Inc., the largest U.S. shopping-mall owner by stock-market value, tried to buy real estate from rival General Growth Properties Inc. before it filed for bankruptcy, Chief Executive David E. Simon said.
“They didn’t realize they were a distressed seller,” Simon said in a panel discussion at the Milken Institute Global Conference today in Beverly Hills, California. Few commercial real estate sales are being completed because sellers aren’t willing to take losses on their investments, Simon said.
Is this likely to change now that GGP is in bankruptcy? It seems not. From a May 20, 2009 Bloomberg story:
General Growth Properties Inc., the mall owner that filed the biggest real-estate bankruptcy in U.S. history, may not have to sell any malls at discounted prices, said the head of rival Taubman Centers Inc.
“Even with a distressed owner of a good quality regional mall asset, you rarely, rarely see distressed pricing of those assets,” Chairman and Chief Executive Officer Robert S. Taubman said in a telephone interview. “If you’ve got a great one, no one’s going to want to sell an asset like that at a distressed price.”
…Taubman, whose Bloomfield Hills, Michigan-based company has 24 regional malls, said the court likely will support a plan by General Growth management to keep the company’s portfolio together and emerge from bankruptcy without selling off a large number of properties.
As I discussed in my post “Is General Growth Properties in Denial?”, the GGP bankruptcy was not about fundamentals, it was about maturing debt. That’s a problem that is relatively easy to solve in bankruptcy court without liquidating assets.
|