Friday, April 03, 2009

Is GGP Too Big to Fail?

Rarely a day goes by anymore without someone in the business press claiming that a bankruptcy filing by General Growth Properties is imminent. Despite several missed deadlines for renegotiating the terms of the debt held by its bondholders however, it still hasn’t happened.

What gives?

Perhaps it is because GGP is just too big to fail. Yesterday I ran across this blurb in a post on a blog called Credit Equity Correlation (sounds exciting doesn’t it?) written by a Wall Street guy named Jim Delaney.

“General Growth Properties could stand as the poster child for the current commercial real estate environment as although they have stopped paying debt service on two of their key properties the lenders have not forced GGP into bankruptcy as they believe there is more to be gained by riding out the storm with a company whose tenants are happy with the way the Malls where they lease are maintained.”

I think that speaks well for the employees of the battered developer who are steering the ship through this storm. As long as they can retain good people they have a fighting chance to pull through this.


Jack said...

I don't wish bankruptcy on any company but the market functions on the same basic principles as nature. Adapt or die. Noted dodo birds never paid off loans.

In my interview with Cy Paumier, he told me GGP got too greedy with their buyout of the Rouse Company. Perhaps this is just the natural course of things.

Simply the fact that the 2008 shopping season was the worst in decades pleases me. I'm not religious & perhaps those that are have realized there is more to holidays than capitalism.

I didn't really answer your question though. Politicians do this a lot.

Anonymous said...


I thought Cy Paumier was a landscape architect. Is providing advice on past mergers and acquisitions a "hobby" of his? How is he qualified to provide such an assessment?

Jack said...

Everyone is qualified to have an opinion! Perhaps working directly for the Rouse Company gives him qualification but you'd have to ask him!