General Growth Properties, the struggling retail real estate investment trust and the US’ second largest mall owner, has failed to extend the loan maturity dates on $900 million of debt for two Las Vegas properties.
As private equity real estate investors eye distressed opportunities in the US, General Growth said in a statement it had failed to reach a “unanimous” agreement over its loans for the Fashion Show and Palazzo retail complexes.
The Fashion Show, located on Las Vegas Strip, is one of the world’s largest enclosed retail centres, with more than 1.8 million square foot of space, 200 stores, seven anchor tenants, a stage and fashion runway, with fashion shows occurring every Friday, Saturday, and Sunday. The Palazzo shopping centre, is part of the stand-alone resort, the Palazzo, being developed by listed developer Las Vegas Sands. In a statement, General Growth said it was “continuing discussions with lenders”.
Last week, General Growth renewed $896 million of mortgage loans coming due over the next five to seven years. The proceeds were used to pay off a $58 million bond issued by the shopping mall owner and developer, The Rouse Company, due at the end of last week. In 2004, General Growth bought Rouse in a deal valued at $12.6 billion.
Yesterday, Chicago-based LaSalle Investment Management said private equity real estate investors would find good opportunities in the US during 2009, particularly with discounted REIT shares.
Chicago-based private equity real estate firm Green Courte Partners recently acquired the Florida-based senior housing REIT American Land Lease in a deal valued at $438 million, after the REIT struggled to balance its declining market capitalisation against the value of its underlying portfolio. American Land owns, develops and manages more than 10,000 senior housing properties in 30 locations in Florida, Arizona and Alabama.