General Growth Properties Inc. (Chicago), the mall owner and developer saddled with a $27 billion debt load, has been given a reprieve by lenders, pushing back an overdue $900 million mortgage payment to February.
The agreement will keep the nation’s second-largest owner of mall properties out of bankruptcy court for the moment. According to the Wall Street Journal, the reprieve gives General Growth -- which owns more than 200 malls -- and its lenders time to try to resolve their differences and perhaps strike a longer extension. But the company has agreed not to take any significant actions without the consent of certain lenders.
The mall owner won't make major moves -- such as selling malls, refinancing properties or transferring assets between its subsidiaries -- during the term of the forbearance pact without the approval of the majority of lenders in its credit facility, according to people familiar with the talks.
The concession is significant because General Growth needs to sell several malls and refinance mortgages to cope not only with the $900 million loan but also another $2 billion in other debts coming due in 2009. Earlier, General Growth had said it was looking for buyers for New York’s South Street Seaport and mixed-use properties in Boston and Baltimore. Eastdil Secured LLC (New York), a realty firm, had been hired to sell the Canal Shoppes in Las Vegas, Westlake Center in Seattle, Pioneer Place in Portland, Ore., and Victoria Ward in Honolulu.