Southpoint's corporate owner GGP files for bankruptcy

General Growth Properties, the corporate owner of The Streets at Southpoint shopping mall, filed for bankruptcy this morning; the long-expected move comes as the massive real estate firm was unable to renegotiate or refinance debt coming due. With $27 billion in debt, it is the largest real-estate bankruptcy in American history.

On the bright side: The Herald-Sun notes that 158 of GGP's subsidiaries and shopping centers filled bankruptcy simultaneously -- but not Southpoint, which has a very low occupancy rate (reportedly usually less than 3%) and top-shelf tenants.

On the other hand: ABC 11 points out that Southpoint represents 1% of the county's property tax base, accounting for $2 million a year in revenue. No word as to whether GGP can get off the hook for those payments, or whether the lack of a specific Southpoint filing creates any different assumptions for tax liability.

Comments

[David N]

"...but not Southpoint, which has a very low occupancy rate (reportedly usually less than 3%) and top-shelf tenants."

I assume you mean the *vacancy* rate is usually less than 3%?

[Reyn Bowman]

TS@SP is a joint venture so I doubt it is impacted. Southpoint is extremely profitable anyway.

[Jason G.]

All their properties are profitable, just not profitable enough to carry the debt load. That's unfortunately why they're in trouble -- overly leveraged.

Hopefully the streets will find a new benevolent owner.