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BCR's Daily Fishwrap Report for April 17, 2009

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.


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.

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