Simon Interested in Some GGP Malls

This article about the health of Simon Property Group in the recession, reveals that the mall owner might consider acquiring some General Growth Properties assets when the latter’s bankruptcy proceedings mature.

Said CEO David Simon: “I don’t think we would be interested in the whole company. They have some assets that clearly would fit nicely with ours.”

If it is interested in making major acquisitions again, Simon could have even more choices out there, as it seems that Glimcher Realty Trust is also interested in selling some if its prime assets.

Are there any malls that you know of that Simon could grab when its ready to buy?

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8 Responses to “Simon Interested in Some GGP Malls”


  1. 1 Retail Lou May 27, 2009 at 9:44 am

    of all the properties that GGP has, the most attractive I would think is the Fashion Show Mall in Las Vegas. With one of the best mall locations, and a steady stream of people, it seems like a great Simon fit.

  2. 2 Paul Fetscher CCIM, SCLS May 27, 2009 at 10:02 am

    In light of the current GGP debt, one certainly has to go back and question the wisdom of the price paid for the retail component of The Venetian. I may be many a year before that per square foot price is justified.

  3. 3 Bernie May 27, 2009 at 10:45 am

    GGP got greedy and made some very bad decisions; decisions that would have been questionable even in a robust economy. Most of their “gems” where deveoped by someone else. They deserve to lose these properties to much smarter developers like Simon.

  4. 4 kin powell May 27, 2009 at 11:51 am

    I am constantly amazed at peoples’ memories, from ’93-’06 GGP traded at above their peers on a FFOx basis. It is generally considered to be a superior operator long before some of its preers came to the fore on that front & still is today. I am a friend of & great admirer of Bernard Friebaum the former CFO. I have spent a considerable amount of time talking with him about his strategy & portfolio since GGP bought Price REIT of Salt Lake City thru ’08. We along with many other operators, developers, investors,lenders, analysts believed that the long term nature of the malls leases, comfortably allowed malls to be financed on an individual basis at a higher LTV than other income producing real estate. We also believe that when you utilize secured finance, it is incumbent to maximize rate & remission as you are tying the property up for 10 years generally. There were no competitive bidders for Rouse as GGP was the only buyer that had the capacity to finance the deal 100% debt with very low rates, it was as strategicly transformative as SPG’s aqusition of Corporate Property Investors. Spg did not build many of its best properties. The only one that di was Taubman. As to the idea that GGP overpaid for its deals with Las Vegas Sands — well show me any soothsayer, that takes credit for predicting the collapse od the securtized debt market begining in Aug.’07 coupled withthe largest economic cataclysim since ’29 furthur coupled with tha complete failure of the world’s financial system in Sept. ’08 & i show you a LIAR! Bernnie would have had to “see” all those things to avoid this morass. I sincerely hope that the Bankruptcy judge will be able to rehabilitate GGP, sans its low-productivity mall & other non retail assets to the operating company it can be without the distractions of its capital structure & extraneous assets. This for the good of the retail industry.

  5. 5 Bernie May 27, 2009 at 1:16 pm

    What is the status of Bernard Friebaum’s +/- $60M loan he got from the big boy’s to pay for stock options? Has it been paid back yet, either partially or in full. Unfortuatly, Mr. Friebaum will go down in history as the architect behind the largest REIT failure in ever.

  6. 6 Broker May 28, 2009 at 9:01 am

    Had another couple of years gone by DDR, GGP and others in their position might have not had these problems if they aggressively paid down the debt that they took on to buy up their competitors. Who would have predicted that a world that was a swamp with liquidity would turn into a desert due to a bunch of subprime residential loans.

  7. 7 tim May 28, 2009 at 9:32 am

    The St Louis Galleria, the premiere mall in the area would be a great acquisition for Simon. Ever since GGP acquired the mall from Hycel Properties, the care and management of the mall has gone downhill. Hopefully a new ownership group could spur the completion of the Nordstrom’s anchor store and the other projects that the Galleria currently has on hold.

  8. 8 Bernie May 28, 2009 at 12:19 pm

    Since nobody seemed to know the status of Freibaums debt to the family trust, I dug this excerpt out of the St. Louis Business Journal from late last year. Does anyone know if he has paid any of the $80M balance off yet…and if not, why? This loan caused quite a stir; and Bernnie has lost a bundle on the stock.

    General Growth (NYSE: GGP) had recently learned that an affiliate of a Bucksbaum family trust made unsecured loans to Michaels and Bernard Freibaum, former director and chief financial officer. The loan was made “for the purpose of repaying personal margin debt relating to company stock,” according to a company press release. Michaels’ loan, of $10 million, was repaid, while Freibaum still owes $80 million on his $90 million loan. Freibaum was terminated before General Growth became aware of the loan, it said.


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