General Growth Properties (GGP) is the 2nd largest mall owner in the United States. General Growth Properties owns over 200 malls and shopping centers throughout the country. I first noticed General Growth because they own a lot of malls that I frequently visit. Malls such as White Marsh Mall, Owings Mills Malls, Towson Town Center and the Mall in Columbia to name a few. General Growth has a portfolio of attractive real estate holdings that any company would love to own. So why is GGP in at risk of declaring bankruptcy? GGP borrowed too heavily to finance its property acquisitions which include its 12.6 billion dollar merger with the Rouse Company. The economic recession has hit the retail industry especially hard. GGP has seen decreased demand for properties that they lease.

Mall traffic has slowed substantially and this has hurt the earnings of existing tenants. General Growth Properties is now saddled with over 24 billion in long term debt and has only 100 million in cash. The major assets on General Growth’s balance sheet are the mall properties. GGP may soon default on 1.5 billion in debt that is due in the next 6 months. They are actively seeking financing. But General Growth may be forced to liquidate its real estate holdings to pay off its debtors. General Growth has seen its stock slide from 50 dollars per share to 50 cents. GGP has ceased paying its dividend and seen its credit ratings slashed to junk status. Unless emergency financing is secured General Growth may soon be having its own going out of business sale.