After months of trying to get extensions on its loans, the #2 mall owner in the country, General Growth Properties, has filed for bankruptcy.
You can hear our story explaining GGP's troubles here. GGP really was a victim of the credit crisis. It owned plenty of profitable malls. But it had borrowed billions to buy some of those malls, and the way these things work is that these big real-estate loans come due in say five years with a huge balloon payment. In normal times the company simply refinances before that happens. But with the credit crisis, GGP couldn't do that.
Some of the banks that had lent GGP money were on shaky ground. So I wonder what this means for them.
Two mall analysts I talked to for that story both said they didn't think GGP would be forced into bankruptcy, since that would just be messier for everyone. I'll try to check in with them today.
You can read GGP's statement here though the company's website is a little slow right now.