CHICAGO – General Growth Properties Inc. (NYSE: GGP), the Chicago-based real estate investment trust that has owned Providence Place mall since 2004, today confirmed it has placed the 1.25-million-square-foot property up for sale.
“We are marketing Providence Place for sale,” GGP Director of Public Affairs Nicole C. O’Connor said. O’Connor declined to comment further on details of the listing. The Wall Street Journal last month reported GGP had hired Savills Granite LLC, a New York brokerage, to market the property. That broker did not immediately return a phone call this afternoon.
GGP acquired Providence Place as part of a $14 billion, 37-mall deal with The Rouse Co. in 2004 – a transaction for which GGP reported taking out an $8 billion, four-year acquisition loan. Maryland-based Rouse had acquired Providence Place two years earlier, in a $522 million deal with developers The Providence Place Group.
But GGP, one of the largest REITs in the county, last fall announced that it might be forced to file for bankruptcy, citing about $27 billion in short-term debt, including $958 million due late last year. (READ MORE) The company refinanced part of that debt early last month, and in mid-December, announced it had entered into a Forbearance and Waiver Agreement on the $900 million mortgage loans on its Las Vegas properties, allowing it until Feb. 12 to pay back that expired debt. (READ MORE)
Several of GGP’s more than 200 properties already have been placed the market, in an attempt by the company to cover its debt. Among them are the Fashion Show Mall, Grand Canal Shoppes and The Palazzo in Las Vegas, which GGP put up for sale in October (READ MORE), and a “Festival Portfolio” of three Northeastern mixed-use properties – including Boston’s historic Faneuil Hall Market Place – that DTZ Rockwood began marketing last month.
Providence Place is valued by the City of Providence at $586.65 million, but Alan Doyle, principal with the real estate finance firm Larew, Doyle & Associates in Providence, told Providence Business News in November that if GGP sells the property, it is likely to do so at a steep discount. (READ MORE)
Also in November, Providence Place Senior General Manager Craig Gorris said the property’s vacancy rate is about 5 percent, which is low. Gorris added that the mall is largely “insulated” from market forces because it has entertainment, dining and retail components: “Retail is very cyclical and I think because of our diversity, we’re somewhat more immune.”
General Growth Properties Inc. (NYSE: GGP) – owner of Providence Place and the Silver City Galleria in Taunton and manager of the Swansea Mall – has a portfolio that includes about 200 million square feet of retail space and more than 24,000 stores, as well as stakes in various master-planned community developments and commercial office buildings. Additional information is available at www.ggp.com.
