Would YOU Buy These GGP Malls?

We’ve been a little slow to report that General Growth is marketing three trophy properties in its portfolio that were originally acquired from the Rouse Co. The assets, being marketed by DTZ Rockwood, are Faneuil Hall in Boston; South Street Seaport in Manhattan and Harborplace and the Gallery in Baltimore.

We’ve been intrigued by the prospects of these three centers going to market because of their civic significance in each locale.

These things aren’t just malls, they’re neighborhoods that their respective cities place a high value on because of their prime locations and tourism appeal. Sure, they all have their faults, but no one can argue that these things aren’t unique.

So who do you see buying them? We’ve talked to quite a few people about potential candidates and seem to get the same response: “A local, private buyer.” Disagree?

5 Responses to “Would YOU Buy These GGP Malls?”

  1. 1 ss December 23, 2008 at 9:58 am

    These properties are not malls in the typical sense. The festival shopping design was supposed to be a retail incumbator for small mom and pop retailers. The tenant rent roll was supposed to be a large percentage of small retail users, some national retailers and a few restaurants. The mom and pop component is now obsolete, the national retailers are only moderately successfull and the restaurant component has typically become larger and larger.

    These projects are generally very management intensive, have very high operating costs and do not fit in a typical retail portfolio. Buyers have typically been local investors and there has not been a history of these types of buyers really turning around troubled assets. It is a tough retail category.

  2. 2 ak December 23, 2008 at 11:04 am

    Yes these assets will command top dollars as the trend for life style center continues in the retail world. The typical malls are not interesting anymore. People love to shop in a place where there are entertainment, food and local culture. These three assets are meaniful from a historical point of view. Faneuil Hall in particular, was the leader in festival malls concept and have been very successful as a cultural icon. Although the price would not be as high as one year ago, nonetheless, it should command a premium even in today’s market and it is a perfect time to buy if someone are really eyeing these types of asset.

  3. 3 Matt December 23, 2008 at 2:25 pm

    SS – your analysis of the ‘Festival Shopping Design’ may have some truth to it. However, if you are familiar with the Baltimore and Boston properties mentioned above, these would not be considered ‘troubled assets’, both maintaining an annual NOI well into the 7 figures and relatively high occupancy in a terrible retail market.

  4. 4 frumhere December 24, 2008 at 12:11 pm

    I am not too familiar with the properties themselves, but I would say that any retail space that is over saturated with food establishments is a sign of a slow death. Restaurant failure rate is very high, but for some reason everyone wants to get into the business. The capitalistic society has a way of ferreting out weak performers and I think this is just the tip of the ice berg for the decline of the retail malls. Heck, down here in Florida, we have Sawgrass hat charges INSANE fees to just have a kiosk. Well no one cares if they are making some money, but death is imminent.

  5. 5 Bob Little December 26, 2008 at 1:59 pm

    Jim Rouse did not envision these city marketplaces and Harborfront civic settings as “things” much as I am sure Venice does not envision St Marks Square as that “thing” in Venice.
    America needs to value it’s civic places. After all what is to enjoy in our cities other than our magnificent public and civic settings and the cultural components they breed?

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