Don't fret, bankruptcy won't shut your mall

Real estate experts say it will be business as usual at local malls despite General Growth Properties' Chapter 11 filing.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Parija B. Kavilanz, CNNMoney.com senior writer

What will you do with your income tax refund?
  • Spend it
  • Save it
  • Not getting a refund

NEW YORK (CNNMoney.com) -- Experts say consumers are unlikely to see their area mall disappear after General Growth Properties, the second-largest mall owner in the country, filed for bankruptcy Thursday.

"It will be business as usual for consumers and stores in these malls," said Ivan Friedman, president & CEO of RCS Retail Real Estate Advisors

He also said that it's very rare for a mall to be shut down.

Chicago-based General Growth Properties (GGP), which owns more than 200 malls nationwide, was forced to seek bankruptcy protection after failing to raise capital to service its debt. Among its malls are South Street Seaport in New York, Water Tower Place in Chicago, Cumberland Mall in Georgia and Glendale Galleria in California.

Although real estate experts characterized GGP's situation as probably the single biggest commercial real estate bankruptcy in history, they expect that event will likely have "no implications" for consumers.

Unlike retailers such as Circuit City and Linens 'N Things, which ultimately went out of business because their concept lost relevance with shoppers, Friedman and others said General Growth's problems are more finance-related rather than consumer-driven.

Also, at a time when mall vacancies are at record highs, "[GGPs] malls are still 90% occupied," said Victor Calanog, director of research with retail real estate firm Reis. "GGP operate fairly high-quality malls both in terms of locations and types of stores," he said.

Even if GGP puts some of its malls on the market as part of its restructuring efforts under Chapter 11, Calanog believes the company will ultimately find buyers because of their attractive locations.

Said Friedman, "GGP doesn't really have any weak malls in its portfolio. The malls will be around. The company isn't going out of business." To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
These 10 food trends could dominate 2015 So long, kale. Here's what's expected to shake up the food industry next year. More
Beyond Russia: Geopolitical hot spots in 2015 Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More
These 20 antique guns could fetch big bucks Morphy Auctions in Pennsylvania is putting nearly 1,000 old guns on the block. Here are just a few. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.