GGP Inc.

Properties

GGP owns or has interest in 120 regional shopping malls in forty states. GGP has been in the shopping center business for more than 60 years, including such locations as Ala Moana Center (Honolulu), Tysons Galleria (D.C.), Glendale Galleria (Los Angeles) and Water Tower Place (Chicago). The entire GGP portfolio totals roughly 125,000,000 square feet (11,600,000 m²) of retail space and includes more than 24,000 retail stores. These include international retailers and anchors, as well as regional stores covering a range of categories. More than 1.8 billion consumers visit a GGP mall every year. GGP has centers in 37 of the top 50 metro areas in the U.S. More than half of GGP's portfolio is located in these markets including 32 properties in the top 10 U.S. markets.

GGP owns the largest open-air shopping mall in the world, Ala Moana Center in Honolulu, Hawaiʻi. Ala Moana Center is also a flagship of a GGP tourism program called "America's Premier Shopping Places." It lists a number of tourist destinations that include Water Tower Place in Chicago.

History

The company was founded by two brothers, Martin and Matthew Bucksbaum, in 1954. That year, they opened their first shopping center, Town & Country Shopping Center in Cedar Rapids, Iowa. In 1960, General Management opened its second center, Duck Creek Plaza in Bettendorf, Iowa; this was their first mall to have a department store (Younkers) as an anchor.

In 1970, General Management became General Growth Properties (GGP). Two years later GGP became a publicly traded company on the New York Stock Exchange. However, by 1984, management felt that the company's stock price did not fully reflect the value of its business. So management decided to sell the company's assets and take the company private. GGP sold 19 malls to Equitable Real Estate Investment Management in an $800 million deal – considered the largest single real estate transaction in the United States at that time – but continued to manage the malls as part of the deal. Ultimately, shareholders realized a 22% internal rate of return on their investment from the original initial public offering (IPO) through 1984. GGP issued another public offering in 1993 to raise money for future expansion plans. In 1995, GGP moved its headquarters from Des Moines, Iowa, to Chicago.

Starting in 1993, GGP expanded its portfolio dramatically by acquiring existing properties and constructing new malls. In 1995, it acquired Homart Development Company, the mall development subsidiary of Sears. On November 13, 2004, GGP acquired The Rouse Company, including its Howard Hughes Corporation land development subsidiary, in the largest retail real estate merger in American history. GGP grew to be the nation's second-largest mall operator.

Co-founder and CEO Martin Bucksbaum died in 1995. He was succeeded as CEO by Matthew Bucksbaum. Matthew retired in 1999, and was succeeded by his son John.

Company debt crisis

GGP reported in excess of $25 billion in debt (mostly mortgages) as of September 30, 2008. In late November 2008, GGP missed a deadline to repay $900 million in loans backed by two Las Vegas retail properties. This meant that GGP lenders could issue a notice of default, which would make GGP seek protection from its creditors under Chapter 11 bankruptcy.

In December 2008 the Wall Street Journal reported that GGP would seek bankruptcy protection if it could not renegotiate its loans. Its share price had fallen by 97% over the previous six months.

Exit of Bucksbaum family

The company's problems forced the ouster of CEO John Bucksbaum, though he remained chairman of the board. On October 26, 2008, Bucksbaum resigned. Director Adam Metz became CEO. The value of the Bucksbaum family fortune shrank by 97 percent since December 2007.

Bankruptcy

GGP failed to reach a deal with its creditors; and on April 16, 2009, filed for Chapter 11 bankruptcy: the largest real estate bankruptcy since at least 1980, and the largest ever filing by a mall operator.

According to its bankruptcy filing, GGP had about $29.6 billion in assets at the end of 2008, and $27.3 billion in debt. GGP suspended its dividend, halted or slowed nearly all development projects and cut its work force by more than 20%. GGP also sold some of its non-mall assets. Chief Executive Adam Metz said "While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11." GGP obtained $375 million in debtor-in-possession financing. Mall gift cards remained usable.

On February 24, 2010, GGP finalized a deal with Canadian property company Brookfield Asset Management that would involve up to a $2.625 billion equity investment.

Departing bankruptcy

GGP hired Sandeep Mathrani as its new chief executive, and on November 8, 2010, it left bankruptcy, and offered new stock shares to the public. Unlike most Chapter 11 bankruptcies, existing General Growth stockholders were not wiped out upon the company's exit from bankruptcy.

The exit from bankruptcy included the creation of Howard Hughes Corp., as a spinoff, with each holder of a General Growth share was scheduled to receive one share of new General Growth stock and 0.0983 share of Hughes Corp. common stock. Hughes Corp.'s assets will include Summerlin, a 22,500-acre (91 km²) master-planned community in Las Vegas, and South Street Seaport, a shopping center in downtown Manhattan. Unlike General Growth, Hughes Corp. will not be a real estate investment trust, according to a registration statement filed with the U.S. Securities and Exchange Commission.

Spin-off

In 2011-2012, General Growth spun off 30 mall properties into a public company, Rouse Properties, Inc. The Howard Hughes Corporation is another public company that spun off in November 2010.