Will Your Favorite Mall Survive?

General Growth Properties (GGP), the nation’s second largest mall operator, warned of solvency issues yesterday. 

GGP is a real estate investment trust (REIT) which operates over 200 shopping centers from Hawaii to Maine.  The company has over $1.1 billion in debt coming due, the vast majority of it is payable within the next month.  Last month, GGP announced that it may sell assets in order to service its debt.

GGP operates one of my favorite malls, Tysons Galleria in northern Virginia.  Tysons is listed as one of General Growth’s Platinum Properties (the best of GGP) offering stores such as Tiffany, Neiman Marcus, Louis Vuitton, Versace, Saks Fifth Avenue, and Barneys New York…all of which I enjoy perusing through (looking, but not touching!) on my way to P.F. Chang’s or The Cheesecake Factory. :)

Does this mean our favorite malls will be no more?!?!  According to Ivan Friedman, president & CEO of RCS Retail Real Estate Advisors, store closings are much more likely than mall closings. 

It looks like we can relax, at least for now.  I wish I could say the same for GGP’s shareholders.

Last month, GGP did the boardroom shuffle and replaced its CFO.  In the same press release it announced the suspension of dividends on its common stock.  After yesterday’s debt warning, the company was promptly booted from the S&P 500 index (effective at the close of markets today). 

Shares opened today at $0.43 and before 10 AM trading volume is already over one-third of its daily average. 

Wouldn’t it be nice if the malls saw the same volume?