General Growth Properties (shopping malls) 49 cents

[sandnsea]

I just heard it on the local news, they own the mall in Springfield Oregon, and a bunch more around the country. A year ago their stock was at $51. Today it closed at 49 cents.

:wow:

You can check and see if they own malls in your town.

http://www.ggp.com/Properties/MallDirectory.aspx

This is getting seriously

:scared:

[elleng]

1. Just returned north from Florida;

lots and lots of malls; formerly lots and lots of shoppers. Looked to me as if most of malls were quite underused, eventho some stores newly opening.

Definitely getting seriously.

[lapfog_1]

2. Hmmm...

Market Cap of $107 M.

Debt of $27 B.

That could be a problem.

I'm guessing that a lot of chain stores are not paying their rent, or they are very late with it.

Look at the history from the company web site and they went on an acquisition binge starting in the '90s and continued right up through 2007.

Not very smart.

I'm guessing that some of our bailout money went to the banks that hold this paper. Again, the bailout idiots should purchased this asset from the banks, tell the retail chains that they can stay RENT FREE for 6 months SO LONG AS THEY STAY IN BUSINESS and keep their employees. But after that, Uncle Sam wants his rent money for these malls (200 of them, that's a lot of modest wage employees). GGP can go to hell. And the banks lose at least 20 % on their bad loans to GGP. But we keep the retailers and their employees going.

[elleng]

8. I like your plan!

and I'd bet lots of others will, too.

Heard car dealership had to close its doors after 60 years when bank wouldn't continue business with them, of covering their 'floor,' that is, the regular amount needed for cars on the lot; the business has NEVER missed a payment!

[Systematic Chaos]

3. Oh, dayumn.

They own three out of the four major malls in Las Vegas, as well as two of the casino shopping areas. The only major mall they don't own is the Galleria which is in Henderson, and which is also the newest non-casino mall in town.

Yikes!

:scared:

[Subtropical]

4. For some time it's been hard to walk through a huge mall,

especially the newer "upscale" ones of recent years, and not sense the sheer unsustainable nature of it all:
Amenity-filled Palaces of Commerce on expensive land, extravagantly landscaped. Unseen meters spinning as year-round indoor shopping temperatures maintained. High-rent storefronts often occupied by bored clerks with little to do. I always wondered how few items those stores could sell and still be able to pay the rent needed to support all that mall infrastructure.

Looks as though we're about to start finding out.

Perhaps our Consumerist Culture will be forced to evolve into something more meaningful, and sustainable?

[girl gone mad]

5. They are in the process of hiring a bankruptcy firm. n/t

[Bravo Zulu]

6. THOMAS L. FRIEDMAN, No wonder he wants people to go shopping.

Friedman's personal fortune is based on his wife's inheritance of a shopping center owner and management company, General Growth Properties, whose share price has fallen from $40 to 40 cents. No wonder he wants people to go shopping.

November 16, 2008
Op-Ed Columnist
Gonna Need a Bigger Boat
By THOMAS L. FRIEDMAN
Barack Obama surely has one of the toughest leadership challenges any incoming president has ever faced. We’re in the midst of a terrible economic meltdown, the current administration has lost all credibility, the House of Representatives is full of knuckle-dragging Neanderthals, and the public is being whipsawed between free-market fundamentalists preaching the virtues of just letting the market rip and left-wingers who think we can punish Wall Street while protecting Main Street. It feels like a mess with no one in charge.
Now is when we need a president who has the skill, the vision and the courage to cut through this cacophony, pull us together as one nation and inspire and enable us to do the one thing we can and must do right now:
Go shopping.

http://www.nytimes.com/2008/11/16/opinion/16friedman.html?_r=1&hp=&pagewanted=prin
http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=11&year=2008&base_name=why_is_thomas_friedman_writing

[sandnsea]

7. Oh my god, I saw that yesterday

but I didn't make the connection.

[SoCalDem]

11. and just think.. he's on TV almost EVERY day, and "no one" has

told us one thing about it..hmmmmm:evilgrin:

[JDPriestly]

9. Glendale Galleria -- huge place

This is insane. This stock price bears no relation to the assets of that company. What has happened. It's like Armageddon on Wall Street. It's eerie.

[lapfog_1]

10. more like the $27 B in debt

and retail is taking it in the shorts right now.

If I owned a mall that I bought 5 years ago at $XXX dollars, and leveraged that purchase with a loan from a bank... I'd be plenty worried about the retailers paying me so I can pay on my note.

In fact, I would say that the situation is dire. However, if I declare bankruptcy, the banks might take my assets to pay off the note. But banks don't want to operate a mall, especially one where the retailers aren't paying rent. So they put the mall up for sale.

But there is a credit crunch right now. Who would buy this mall. Anyone? Bueller?

They might have to take a huge write down on this asset. Possibly selling it for 1% of the 5 year ago purchase price. Even then, who would want to pay just the operating costs (electricity, natural gas, water, security guards, managers, janitorial staff, etc, etc) if they can't get the retailers to pay anything for rent.

I think we are looking directly into the mouth of the Depression of 2009. It won't be the same as the 1930's. We will have something other than black and white (or sepia toned) photos. Probably no dust bowel. But soup kitchens and bread lines will return.

[JI7]

12. how much of this could be related to increase in internet shopping ?

i would be interested to know that.

it seems like restaurants and other food places are always popping up.

if i don't have to work on black friday i'm going to drive around to different places from shopping malls to places like target in different neighborhoods to get an idea what things are like in person.

[sandnsea]

13. Internet sales are down too

http://www.tampabay.com/news/business/retail/article879439.ece

My personal antecdote would be - waaaaay down. :cry: