Commercial Real Estate and Las Vegas

The share price of General Growth Properties Inc., the Chicago real estate investment trust that owns two major East Bay shopping centers, dropped 42 percent Tuesday.
Investors are increasingly nervous that General Growth, the nation’s second-largest owner of retail centers with a portfolio that includes NewPark Mall in Newark and Southland Mall in Hayward, will not be able to pay off its loan debt of more than $3 billion that comes due in late 2009, especially now with the credit crisis.
Shares in the company closed at $4.50 on the New York Stock Exchange on Tuesday, a drop of $3.25. That’s the lowest closing price on General Growth stock since the company’s initial public offering 15 years ago.
The company also has several loans maturing in the next two months, including a $650 million loan to the Fashion Show mall in Las Vegas and a $250 million loan to the Shoppes at the Palazzo, also in Las Vegas. Both loans come due Nov. 28.
Since refinancing real estate debt has become almost impossible in the current financial climate, officials of General Growth have reportedly been considering a wide array of options to raise money, including selling off some of the more than 200 malls it currently owns.

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