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GGP article in Vegas

Written by Reggie Middleton
Wednesday, 13 August 2008
General Growth faces financial shortfall Mall company delays developments as mounting debt comes due By BENJAMIN SPILLMAN REVIEW-JOURNAL They quoted some handsome fella here. Credit woes that disrupted General Growth Properties' participation in Boyd Gaming's $4.8 billion Echelon resort represent just a small portion of the financial challenges facing the mall company that owns some of the priciest real estate on the Strip. The Chicago-based company that owns Fashion Show and luxury malls in The Venetian and Palazzo resorts has more than $2.5 billion in debt maturing by the end of the year, $3.3 billion in 2009 and $17.6 billion by 2011. The debt is coming due at a time when credit markets are dry, real estate values are stagnant or in decline and low consumer confidence is squeezing retailers who rent space in General Growth malls and other shopping centers across the country. In addition to the delay at Echelon, General Growth officials announced they will delay development of the Shops at Summerlin Centre, a project with 1.4 million square feet of mixed-use space near Red Rock Resort. They also floated the possibility of selling bonds backed by Fashion Show and other malls and refinancing loans against the Shoppes at Palazzo and the Grand Canal Shoppes in The Venetian. "They have much too much debt for their cash flow. And quite a few of their properties are underwater," said Reggie Middleton, a Brooklyn, N.Y., investor who has published in-depth analyses of General Growth Properties on his Web site, Boombustblog.com. "If they do pay it off by some act of God, they still have 2009, 2010 and 2011." General Growth officials rejected multiple interview requests. Add this page to your favorite Social Bookmarking websites Set as favorite Bookmark Email This Hits: 978 Trackback(0) TrackBack URI for this entry Comments (4) Subscribe to this comment's feed ... written by George Schubert, August 13, 2008 nice Reggie +0 ... written by a b, August 13, 2008 Reggie I've been riding GGP down based on your analysis for several months. I've made big gains but have held on to my October puts for the most part. From what I recall though your worst case scenario back in January valued the stock in the mid 20's. Have you revised this at all? Much appreciated. By the way, in Fire Island myself this week (Ocean Bay Park) enjoying the cool breeze. +0 ... written by Reggie Middleton, August 13, 2008 I believe there situation may be worse, but I haven't had the chance to revisit the model imputs. I stayed in Watch Hill (mosquitos) and Seaview. Very nice place. +0 Score! written by Pontius, August 19, 2008 Reggie quoted in the news. Good going man!!! +0 Write comment Name Email Website Title Comment smaller \| bigger Subscribe via email (Registered users only) I have read and agree to the Terms of Usage. Write the displayed characters
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