Michael Steele didn't think the malls were getting hit by the recession. As he told a radio caller a few days ago: "The malls are just as packed on Saturday." Today, the malls responded, and they don't agree with Steele's assessment.
General Growth Properties, one of the largest mall operators in the nation, filed for bankruptcy early Thursday morning in one of the biggest commercial real estate collapses in United States history.
Despite bargaining for months with its creditors, General Growth faced dwindling options for handling its more than $25 billion in debt, largely in the form of short-term mortgages that will come due by next year. The company has been severely wounded by the recession, which has wreaked havoc upon the retailers who inhabit its more than 200 malls in 44 states. Many stores have shuttered, depriving mall operators like General Growth of revenue.
General Growth is the second biggest mall operator in the country, and its properties include the Water Tower Place in Chicago and the Grand Canal Shoppes at the Venetian in Las Vegas. For our friends in the Chicagoland and Vegas area, this filing doesn't mean the malls are shutting down. All malls will continue running in the meantime, as General Growth looks to shed some of its properties and lose some dead weight (in addition to some of the integrity of the company's currently unfortunate name).