The owner of several Bay Area retail centers, including Southland Mall in Hayward and Newpark Mall in Newark, is reeling beneath a mountain of debt and is battling to avoid mortgage failures, loan defaults, and outright bankruptcy.
Chicago-based General Growth Properties Inc., owner of more than 200 malls in 44 states, is attempting to convince bondholders to give its subsidiary, Rouse Co., more time to pay its debts. The Rouse woes come at a time when General Growth has become saddled with billions in debt it accumulated during an aggressive expansion in recent years.
And Southland Mall could be facing its own specific financing problems. A loan on that property matured and came due on March 2, according to General Growth. But the lender for the Hayward mall has not seized the shopping center, said David Keating, a General Growth spokesman.
"It's a tougher environment for retailers and for shopping centers," said Reesa Tansey, a sales associate for Colliers International, a commercial realty brokerage.
Besides the malls in Hayward and Newark, General Growth also owns West Valley Mall in Tracy, Stonestown Galleria in San Francisco, and Eastridge Mall in San Jose.
The five malls are leveraged with a combined $652 million in debt, according to a General Growth regulatory filing. Southland has an $81.8 million loan, Newpark has a $70 million loan and West Valley has a $57 million loan
"Eastridge, Newpark and Southland are al older properties and they are serving the customers that have been most buffeted by the recession," said Dan Wald, managing director with Terranomics, a commercial brokerage specializing in retail. "And the San Joaquin area has been a disaster," referring to West Valley Mall's trade area.
"We are still in possession of Southland Mall," Keating said. "It has not been seized. We continue to lease it. We're continuing to sign deals. It's business as usual."
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