Mall operator remains upbeat

Steve Marcus

Location, location: The General Growth Properties booth is shown during the International Council of Shopping Centers RECON 2009 show on May 18.

By Mark Hansel (contact), In Business reporter

Fri, May 29, 2009 (3 a.m.)

General Growth Properties, the troubled Chicago-based real estate investment trust with significant interests in Las Vegas, was a major exhibitor at RECON, the International Council of Shopping Centers global retail real estate convention.

General Growth filed for Chapter 11 bankruptcy protection in April after failing to reach terms with creditors to restructure its massive debt. The company is voluntarily seeking relief to reduce and restructure the debt, which was estimated at $27 billion at the time of the filing.

Although some other major players in the retail real estate business chose not to attend this year, General Growth had a customary showcase spot in the central hall at the Las Vegas Convention Center.

James Graham, senior director of public affairs for General Growth, said it was important to send a message to the retail community that despite the setbacks, the company hopes to continue as a major player in the industry.

“We are still very much open for business throughout the country with 200 malls,” Graham said. “We continue to talk to retailers about opening stores in our malls, and this is an opportunity to say to the retail world that (General Growth) is very much open for business.”

Graham said General Growth continues its efforts to market its Las Vegas properties either through a sale or possibly by bringing in a partner.

“We’re still exploring opportunities to have joint venture partners or perhaps sell properties in Las Vegas such as the Fashion Show mall. As for Summerlin Center, there is no change there. That project is delayed pending the improvement of market conditions.”

Other General Growth properties include the Grand Canal Shoppes at the Venetian and the Shoppes at the Palazzo on the Strip, and Boulevard and Meadows malls.

Graham said reports this month that Barneys New York was interested in leaving its prime location in the Shoppes at the Palazzo were quickly dismissed by the retailer.

“Barneys set the record straight and made it clear that it is not going anywhere,” Graham said.

In its first quarter of 2009, despite its internal struggles and a sluggish economy, General Growth reported an occupancy rate of more than 90 percent across its portfolio,

“Our malls are as good as they always have been as places to do business and reach customers,” Graham said.

General Growth also owns the Howard Hughes Corp., the developer of Summerlin.

Graham said the company is striving to ensure the reorganization efforts do not affect any Summerlin residents.

“We continue to honor our commitment to maintain and improve that master-planned community,” Graham said. “We’re hopeful that the Chapter 11 process will be invisible to those who work in the Summerlin community.”

Indiana-based Simon Property Group, owner of the Forum Shops at Caesars, is considered a likely source to strike a deal with General Growth, but it was among the companies that chose not to exhibit at RECON this year.

Although Simon did have representatives in town, Graham was unsure if any meetings between it and General Growth, the two largest real estate investment trusts in the country, took place.

“I don’t know that any meetings happened, it’s certainly possible and it would not surprise me to learn that there were some discussions about our assets that we are interested in selling,” Graham said. “Although the sale of our assets is something we continue to explore, the meetings at (the convention) are primarily to lease space in our shopping centers.”

Graham said the Chapter 11 process

is continuing in New York and there are hearings in the coming weeks. There is no timetable for the restructuring to be completed.

Mark Hansel covers retail and real estate for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at 259-4069 or at hansel@lasvegassun.com.