CHICAGO – Shopping center giant General Growth Properties (NYSE: GGP) has until late tonight to reach a new agreement with lenders about a $95 million mortgage on a New Orleans-area mall called Oakwood Center.
The cash-hungry real estate investment trust (REIT) – owner of Providence Place and the Silver City Galleria in Taunton, and manager of the Swansea Mall – has a portfolio of more than 200 retail centers nationwide. It also owns or manages other properties.
General Growth’s deadline on the Gretna, La., loan was extended from last night to late tonight to give the company time to reach a longer-term agreement, people familiar with the talks told The Wall Street Journal.
The company recently won an extension to mid-March on $900 million in debt secured by two Las Vegas shopping centers, Fashion Show Mall and The Palazzo, both of which have been on the market since October. (READ MORE) It also is seeking buyers for a number of other properties, including Providence Place and the historic Faneuil Hall Market Place in Boston.
A buying spree in the late 1990s and early 2000s helped General Growth to build up what it described in October as “stable, high-quality portfolio of real estate assets in good locations with significant barriers to entry.” (READ MORE) But it also left the REIT with a large load of short-term debt, for which it has been struggling to find new financing since the onset of the global credit freeze.
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The company’s financial position has worsened in recent months as – like fellow mall owners owners Kite Realty Group Trust (NYSE: KRG) and Macerich Co. (NYSE: MAC) – General Growth has been forced to accept lower rents from its remaining retail tenants, according to Bloomberg News.
“A year ago, tenants in major shopping centers were rarely invoking co-tenancy clauses,” a kind of lease provision intended to guarantee a store is getting the foot-traffic it is paying for, said Charles Daroff, a partner in Cleveland-based real-estate law firm Hurtuk & Daroff Co. “Today, with the disappearance of major tenants and increasing vacancies, these clauses are being triggered.”
General Growth Properties Inc. (NYSE: GGP) – owner of Providence Place and the Silver City Galleria in Taunton and manager of the Swansea Mall – is a publicly traded real estate investment trust (REIT). GGP’s portfolio 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.
