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Dan Fasulo on last week's poll

'Recapitalizing is a really tall order for them right now.'

By Paul Bubny | Updated on October 20, 2008

Will General Growth Find a Buyer for its Malls?

As GlobeSt.com has reported, General Growth Properties, owner of the South Street Seaport and 192 other shopping mall properties across the US, is facing major challenges. These stem from the double whammy of a weakening retail environment and the impending due date for $1 billion in short-term debt. The company has said it’s considering the sale of mall assets to refinance the debt; whether that scenario would prove successful is another matter. Forty-two percent of respondents said GGP will find ready buyers for these properties, while 40% expressed doubt this would happen, given the current outlook both for retail and for obtaining financing. Eighteen percent opined that GGP will manage to avoid selling any of its properties—a contention that Dan Fasulo, managing director of Real Capital Analytics, would dispute.

“The question is a little tricky. There’s no doubt in my mind that many of their assets are very attractive to institutional investors, but the way the question is phrased, it’s almost asking whether GGP will find a buyer for the entire company. In this type of environment, I would say that’s very unlikely. But would a company like Vornado Realty Trust love to pick up GGP’s stuff in the Northeast, specifically New Jersey? They would jump on that in a second if they had the opportunity. Would they want the other properties spread around the country in some pretty challenging markets? I don’t think so.

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