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In the wake of General Growth Properties’ highly publicized bankruptcy, followed by problems with MGM Mirage’s CityCenter development in Las Vegas, last week’s Quick Poll asked GlobeSt.com readers what these events predict. A 63% majority indicated that “a storm of bankruptcies is beginning,” while 30% voted “partly cloudy with a chance of Chapter 11.” Only 7% said “sunny skies are ahead.” Justin Greider, associate director with Holliday Fenoglio Fowler in Orlando and an active Florida participant in the International Council of Shopping Centers, gives his assessment of what’s to come:

“The discussions at the ICSC conference in Las Vegas last year [were] that there was going to be a flood of foreclosures and bankruptcies in the second half of 2008. Instead, there were almost none. What we’re just now starting to see is a trickle of those foreclosures and bankruptcies.

“GGP is one that has been out there for a long time and was expected. A number of assets have gone into foreclosure from a local bank level that were seen happening as long as a year ago.

“What we’re seeing is that lenders and creditors are far more willing to work with people and do everything they can to prevent a foreclosure or bankruptcy situation because there is no positive outcome from that right now. There is such a large volume of properties, and to some extent companies, out there that could go bankrupt or could be foreclosed upon that no one knows how to deal with it. Only the worst of the worst are what we’re seeing happening now.

“The lenders are now saying if I can get 30% or 50% of my mortgage payment every month, that’s a lot better than getting none of it. The developers and owners are saying if I can stay alive and keep from getting foreclosed on, that’s better than burning the relationship I have with retailers and contractors. Nobody’s getting what they want, but at least nobody’s totally losing everything.

“There has been a real shift in the perception of how bad a bankruptcy is. There were no shock waves after GGP filed. Everybody realizes that, because of how dramatically the world has changed in the last 18 to 24 months, that was the best possible outcome and that’s the best way for them to survive.”

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