Nov 12, 2008 7:21 pm US/Eastern
Faneuil Hall, Natick Collection Owner In Trouble
BOSTON (WBZ) ―
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The Natick Collection
WBZ
The company that owns several popular malls in New England says it may have to file for bankruptcy - just before the holidays.
General Growth Properties Inc. of Chicago owns the
Faneuil Hall Marketplace, the
Natick Collection,
Providence Place in Rhode Island and other local malls such as the
Silver City Galleria in Taunton, the
Swansea Mall, and the
Steeplegate Mall in Concord, New Hampshire.
It is the second largest owner of malls in the country.
The real estate investment trust said it may be forced to file for bankruptcy if it can't refinance or extend nearly $1 billion in debt due next month.
The company also disclosed in a regulatory filing late Monday that it may default on certain debt obligations. General Growth has been trying to sell off properties and cut costs to weather the rocky economic climate.
But its shares have been falling since September. They dropped another 64 percent Tuesday, reaching an all-time low of 33 cents per share before recovering to close at 49 cents per share.
How Would Bankruptcy Affect The Malls?
Not much, according to Bentley College marketing professor Mike Tesler. He told WBZ if General Growth goes bankrupt, customers would see little change because the store leases will still be valid and remain in place through the process.
Boston Mayor Tom Menino said Wednesday that Faneuil Hall is in good shape despite the poor economy and that vacany rates there are low.
What About Other Area Malls?
The area's largest mall operator,
Simon Property Group, meanwhile does not anticipate the same debt trouble. Company CEO David Simon said earlier this month that "we've been anticipating for a year now that the world was about to change. We are well positioned to handle that."
The company's stock, however, has plummeted in recent months. Back on August 11 Simon stock closed at 100.74 a share. Three months later, on November 11, the stock closed at 58.54 a share – a 42 percent drop.
Simon Property Group operates
dozens of malls in Massachusetts and New Hampshire including Cape Cod Mall, Emerald Square Mall, South Shore Plaza, The Atrium, Mall at Chestnut Hill, Copley Place, Square One Mall, Burlington Mall, Liberty Tree Mall, North Shore Mall, Mall at Rockingham Park, Pheasant Lane Mall, Auburn Mall, Solomon Pond Mall, and Greendale Mall as well as outlets centers in Wrentham and Kittery.
As for speculation in business trades that Simon Property may buy up the troubled owners of Faneuil Hall Marketplace, David Simon said "in the current environment I can not envision a set of circumstances that would result in such a transaction."
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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