General Growth Properties
Encyclopedia
General Growth Properties, Inc. is a publicly traded real estate investment trust
in the United States
. It is based in Chicago
, Illinois
at 110 North Wacker Drive, a historic building designed by architectural firm Graham, Anderson, Probst & White
. The company owns and manages shopping malls throughout the United States.
s in forty-three states. General Growth Properties has been in the shopping center business for more than 50 years, blending innovation, tradition and reputation to create some of the country’s unparalleled shopping locales, including such destinations as Ala Moana Center (Honolulu), Tysons Galleria (D.C.), Glendale Galleria (Los Angeles) and Water Tower Place (Chicago). The entire GGP portfolio totals roughly 200000000 square feet (18,580,608 m²) of retail space and includes more than 24,000 retail stores. These include international retailers and anchors, as well as popular regional stores covering a colorful range of categories. More than 1.8 billion consumers visit a GGP mall every year. Half of the GGP portfolio is located in the 50 most populated U.S. markets, with 37 malls in the top U.S. metro areas.
General Growth owns the largest open-air shopping mall in the world, Ala Moana Center
in Honolulu
, Hawaiʻi. Ala Moana Center is also a flagship of a General Growth Properties tourism program called "America's Premier Shopping Places." It lists fifty tourist destinations that include the historic Faneuil Hall Marketplace in Boston
, and Water Tower Place
in Chicago
.
The company was founded by two brothers, Martin and Matthew Bucksbaum, in 1954. That year, they opened their first shopping center, Town & Country Shopping Center in Cedar Rapids, Iowa
. In 1960, General Management opened its second center, Duck Creek Plaza in Bettendorf
, Iowa
; this was their first mall to have a department store
(Younkers
) as an anchor.
In 1970, General Management became General Growth Properties (GGP). Two years later GGP became a publicly traded company
on the New York Stock Exchange
. However, by 1984, management felt that the company's stock price did not fully reflect the value of its business. So management decided to sell the company's assets and take the company private. GGP sold 19 malls to Equitable Real Estate in an $800 million deal – considered the largest single real estate transaction in the United States at that time – but continued to manage the malls as part of the deal. Ultimately, shareholders realized a 22% internal rate of return on their investment from the original initial public offering
(IPO) through 1984. GGP issued another public offering in 1993 to raise money for future expansion plans. In 1995, GGP moved its headquarters from Des Moines, Iowa
, to Chicago.
Starting in 1993, GGP expanded its portfolio dramatically by acquiring existing properties and constructing new malls. In 1995, it acquired Homart Development Company
, the mall development subsidiary of Sears. On November 12, 2004, GGP acquired The Rouse Company
, including its Howard Hughes Corporation
land development subsidiary, in the largest retail real estate merger in American history. GGP grew to be the nation's second-largest mall operator.
Co-founder and CEO Martin Bucksbaum died in 1995. He was succeeded as CEO by Matthew Bucksbaum. Matthew retired in 1999, and was succeeded by his son John.
, which would make GGP seek protection from its creditors under Chapter 11 bankruptcy
.
In December 2008 the Wall Street Journal reported that GGP would seek bankruptcy protection if it could not renegotiate its loans. Its share price had fallen by 97% over the previous six months.
. On October 26, 2008, Bucksbaum resigned. Director Adam Metz became CEO. The value of the Bucksbaum family fortune shrank by 97 percent since December 2007.
According to its bankruptcy filing, GGP had about $29.6 billion in assets at the end of 2008, and $27.3 billion in debt. GGP suspended its dividend, halted or slowed nearly all development projects and cut its work force by more than 20%. GGP also sold some of its non-mall assets. Chief Executive Adam Metz said "While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11."
GGP obtained $375 million in debtor-in-possession financing
.
Mall gift cards remained usable.
On February 24, 2010, GGP finalized a deal with Canadian property company Brookfield Asset Management
that would involve up to a $2.625 billion equity investment.
The exit from bankruptcy included the creation of Howard Hughes Corp.
, as a spinoff, with each holder of a General Growth share was scheduled to receive one share of new General Growth stock and 0.0983 share of Hughes Corp. common stock. Hughes Corp.'s assets will include Summerlin, a 22500 acres (91.1 km²) master-planned community in Las Vegas, and South Street Seaport
, a shopping center in Manhattan. Unlike General Growth, Hughes Corp. will not be a real estate investment trust, according to a registration statement filed with the U.S. Securities and Exchange Commission.
Real estate investment trust
A real estate investment trust or REIT is a tax designation for a corporate entity investing in real estate. The purpose of this designation is to reduce or eliminate corporate tax. In return, REITs are required to distribute 90% of their taxable income into the hands of investors...
in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. It is based in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
, Illinois
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...
at 110 North Wacker Drive, a historic building designed by architectural firm Graham, Anderson, Probst & White
Graham, Anderson, Probst & White
Graham, Anderson, Probst & White is a Chicago architecture firm that was founded in 1912 originally as Graham, Burnham & Co. This firm was the successor to D. H. Burnham & Co. by Daniel Burnham's surviving partner Ernest Graham and Burnham's sons Hubert Burnham and Daniel Burnham Jr...
. The company owns and manages shopping malls throughout the United States.
Properties
General Growth Properties owns or has interest in 169 regional shopping mallShopping mall
A shopping mall, shopping centre, shopping arcade, shopping precinct or simply mall is one or more buildings forming a complex of shops representing merchandisers, with interconnecting walkways enabling visitors to easily walk from unit to unit, along with a parking area — a modern, indoor version...
s in forty-three states. General Growth Properties has been in the shopping center business for more than 50 years, blending innovation, tradition and reputation to create some of the country’s unparalleled shopping locales, including such destinations as Ala Moana Center (Honolulu), Tysons Galleria (D.C.), Glendale Galleria (Los Angeles) and Water Tower Place (Chicago). The entire GGP portfolio totals roughly 200000000 square feet (18,580,608 m²) of retail space and includes more than 24,000 retail stores. These include international retailers and anchors, as well as popular regional stores covering a colorful range of categories. More than 1.8 billion consumers visit a GGP mall every year. Half of the GGP portfolio is located in the 50 most populated U.S. markets, with 37 malls in the top U.S. metro areas.
General Growth owns the largest open-air shopping mall in the world, Ala Moana Center
Ala Moana Center
Ala Moana Center in Honolulu is the largest shopping mall in Hawaii, the fifteenth largest shopping mall in the United States, and the largest open-air shopping center in the world....
in Honolulu
Honolulu, Hawaii
Honolulu is the capital and the most populous city of the U.S. state of Hawaii. Honolulu is the southernmost major U.S. city. Although the name "Honolulu" refers to the urban area on the southeastern shore of the island of Oahu, the city and county government are consolidated as the City and...
, Hawaiʻi. Ala Moana Center is also a flagship of a General Growth Properties tourism program called "America's Premier Shopping Places." It lists fifty tourist destinations that include the historic Faneuil Hall Marketplace in Boston
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
, and Water Tower Place
Water Tower Place
Water Tower Place is a large urban, mixed-use development comprising a shopping mall and 74 story skyscraper in Chicago, Illinois, United States. The complex is located at 835 North Michigan Avenue, along the Magnificent Mile. It is named after the nearby Chicago Water Tower...
in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
.
History
Cedar Rapids, Iowa
Cedar Rapids is the second largest city in Iowa and is the county seat of Linn County. The city lies on both banks of the Cedar River, north of Iowa City and east of Des Moines, the state's capital and largest city...
. In 1960, General Management opened its second center, Duck Creek Plaza in Bettendorf
Bettendorf, Iowa
Bettendorf is a city in Scott County, Iowa, United States. Bettendorf is the fifteenth largest city in the U.S. state of Iowa and the fourth largest city in the "Quad Cities". As of the 2010 United States Census the population grew to 33,217. Bettendorf is one of the Quad Cities, along with...
, Iowa
Iowa
Iowa is a state located in the Midwestern United States, an area often referred to as the "American Heartland". It derives its name from the Ioway people, one of the many American Indian tribes that occupied the state at the time of European exploration. Iowa was a part of the French colony of New...
; this was their first mall to have a department store
Department store
A department store is a retail establishment which satisfies a wide range of the consumer's personal and residential durable goods product needs; and at the same time offering the consumer a choice of multiple merchandise lines, at variable price points, in all product categories...
(Younkers
Younkers
Younkers is an American department store chain founded as a family-run dry goods business in 1856 in Keokuk, Iowa. The retailer has since evolved over more than 150 years to include a presence in locations throughout Iowa and surrounding states in the Midwest region of the United States...
) as an anchor.
In 1970, General Management became General Growth Properties (GGP). Two years later GGP became a publicly traded company
Public company
This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...
on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
. However, by 1984, management felt that the company's stock price did not fully reflect the value of its business. So management decided to sell the company's assets and take the company private. GGP sold 19 malls to Equitable Real Estate in an $800 million deal – considered the largest single real estate transaction in the United States at that time – but continued to manage the malls as part of the deal. Ultimately, shareholders realized a 22% internal rate of return on their investment from the original initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
(IPO) through 1984. GGP issued another public offering in 1993 to raise money for future expansion plans. In 1995, GGP moved its headquarters from Des Moines, Iowa
Des Moines, Iowa
Des Moines is the capital and the most populous city in the US state of Iowa. It is also the county seat of Polk County. A small portion of the city extends into Warren County. It was incorporated on September 22, 1851, as Fort Des Moines which was shortened to "Des Moines" in 1857...
, to Chicago.
Starting in 1993, GGP expanded its portfolio dramatically by acquiring existing properties and constructing new malls. In 1995, it acquired Homart Development Company
Homart Development Company
Homart Development Company, a subsidiary of Sears, was one of the largest builders of shopping centers and malls in the United States from 1959 to 1995.-Company history:...
, the mall development subsidiary of Sears. On November 12, 2004, GGP acquired The Rouse Company
The Rouse Company
The Rouse Company, founded by James W. Rouse in 1939, was a publicly held shopping mall and community developer from 1956 until 2004, when General Growth Properties Inc...
, including its Howard Hughes Corporation
The Howard Hughes Corporation
The Howard Hughes Corporation is a major real estate development and management company based in Dallas, Texas, which was founded by Howard Hughes. Later sold to the Rouse Company, it became a separate company again in 2010, as a spinoff of General Growth Properties .Upon exiting bankruptcy, GGP...
land development subsidiary, in the largest retail real estate merger in American history. GGP grew to be the nation's second-largest mall operator.
Co-founder and CEO Martin Bucksbaum died in 1995. He was succeeded as CEO by Matthew Bucksbaum. Matthew retired in 1999, and was succeeded by his son John.
Company debt crisis
GGP reported in excess of $25 billion in debt (mostly mortgages) as of September 30, 2008. In late November 2008, GGP missed a deadline to repay $900 million in loans backed by two Las Vegas retail properties. This meant that GGP lenders could issue a notice of defaultNotice of default
A notice of default is a notification given to a borrower stating that he or she has not made their payments by the predetermined deadline. It dictates that if the money owed is not paid in a given time, the lender may choose to foreclose the borrower's property...
, which would make GGP seek protection from its creditors under Chapter 11 bankruptcy
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
.
In December 2008 the Wall Street Journal reported that GGP would seek bankruptcy protection if it could not renegotiate its loans. Its share price had fallen by 97% over the previous six months.
Exit of Bucksbaum family
The company's problems forced the ouster of CEO John Bucksbaum, though he remained chairman of the boardChairman of the Board
The Chairman of the Board is a seat of office in an organization, especially of corporations.Chairman of the Board may also refer to:*Chairman of the Board , a 1998 film*Chairmen of the Board , a 1970s American soul music group...
. On October 26, 2008, Bucksbaum resigned. Director Adam Metz became CEO. The value of the Bucksbaum family fortune shrank by 97 percent since December 2007.
Bankruptcy
GGP failed to reach a deal with its creditors; and on April 16, 2009, filed for Chapter 11 bankruptcy: the largest real estate bankruptcy since at least 1980, and the largest ever filing by a mall operator.According to its bankruptcy filing, GGP had about $29.6 billion in assets at the end of 2008, and $27.3 billion in debt. GGP suspended its dividend, halted or slowed nearly all development projects and cut its work force by more than 20%. GGP also sold some of its non-mall assets. Chief Executive Adam Metz said "While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11."
GGP obtained $375 million in debtor-in-possession financing
Debtor-in-possession financing
Debtor-in-possession financing or DIP financing is a special form of financing provided for companies in financial distress or under Chapter 11 bankruptcy process. Usually, this security is more senior than debt, equity, and any other securities issued by a company...
.
Mall gift cards remained usable.
On February 24, 2010, GGP finalized a deal with Canadian property company Brookfield Asset Management
Brookfield Asset Management
Brookfield Asset Management Inc. is a Toronto, Ontario-based asset management company that manages a global portfolio of assets valued at over $150 billion...
that would involve up to a $2.625 billion equity investment.
Departing bankruptcy
GGP hired Sandeep Mathrani as its new chief executive, and on November 8, 2010, it left bankruptcy, and offered new stock shares to the public.The exit from bankruptcy included the creation of Howard Hughes Corp.
The Howard Hughes Corporation
The Howard Hughes Corporation is a major real estate development and management company based in Dallas, Texas, which was founded by Howard Hughes. Later sold to the Rouse Company, it became a separate company again in 2010, as a spinoff of General Growth Properties .Upon exiting bankruptcy, GGP...
, as a spinoff, with each holder of a General Growth share was scheduled to receive one share of new General Growth stock and 0.0983 share of Hughes Corp. common stock. Hughes Corp.'s assets will include Summerlin, a 22500 acres (91.1 km²) master-planned community in Las Vegas, and South Street Seaport
South Street Seaport
The South Street Seaport is a historic area in the New York City borough of Manhattan, located where Fulton Street meets the East River, and adjacent to the Financial District. The Seaport is a designated historic district, distinct from the neighboring Financial District...
, a shopping center in Manhattan. Unlike General Growth, Hughes Corp. will not be a real estate investment trust, according to a registration statement filed with the U.S. Securities and Exchange Commission.
Spin-off
In 2011-2012, GGP will spin off 30 of its mall properties into a new division, Rouse Properties, Inc.See also
- Shopping property management firms