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WILL GENERAL GROWTH PROPERTIES FIND A BUYER FOR ITS MALLS?

Last week’s GlobeSt.com Quick Poll asked readers if Chicago-based General Growth Properties would find a buyer for its malls in an effort to pay down $4 billion in outstanding debt through next year. The publicly traded REIT owns, develops, operates and/or manages malls in Florida and 43 other states. A total of 43% of voters responded that the attractive properties would sell, while 39% said they would not sell in this economy, and 18% of respondents said the REIT would end up not having to sell. According to its website, General Growth owns 14 malls throughout the Sunshine State. Mark Gilbert, executive vice president of Cushman & Wakefield’s capital markets group, is familiar with the sale of regional malls and retail centers statewide and shares his opinion about the sale with GlobeSt.com:

“I think they’ll be able to work things out with their current lenders and extend loans until there is more stability in the capital markets. They need to deal with near-term loan expirations in a prudent fashion.

“I do think there will be potential bidders for the malls and some of the vacant land that they’re selling. Florida is one of the hotter markets to own retail in, and it’s probably an easier market to complete a transaction in a tough market.

“[With that in mind], I think some of the properties will sell, but we won’t see a massive liquidation. Only one Florida asset is on the market right now, and that’s a large tract of vacant land in southwest Miami-Dade County.

“General Growth has some of the best-in-class malls that are better located, better tenanted, with higher sales per sf than many of its peers in the mall industry. In terms of weathering a down economy/recession, I think their malls probably do better than many others in the state. The better a mall is doing as the economy turns soft, the better chance it has to come out of the recession well, losing fewer tenants and sustaining its rent.”

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