Developer GGP negotiating for an extension on $900 million in mortgage loans for 2 malls

The Baltimore Sun

Area mall owner and Columbia master developer General Growth Properties Inc. said yesterday that it is still negotiating for an extension of the maturity date on $900 million in mortgage loans for two Las Vegas malls.

The real estate investment trust, which is the second-largest U.S. mall owner, failed to reach unanimous agreement with lenders on extending the loans for the Fashion Show and Palazzo malls in Las Vegas. The loans were due Friday after the Chicago-based company received a two-week extension.

Asked whether the company was in default on the Las Vegas loans, General Growth spokesman Tim Goebel said yesterday that the lenders "haven't acted against us, and we're talking."

If the banks declare the company in default on the loans, it could force General Growth into bankruptcy. The company, which has suffered from the credit crunch after assuming billions of dollars in debt during the real estate boom, said in a Securities and Exchange Commission filing last month that it might file for bankruptcy if it could not refinance its loans.

It hired law firm Sidley Austin as an adviser.

Talks with the lenders are continuing, the company said yesterday in a statement. General Growth lost 96 percent of its value this year on investor concern that it is carrying too much debt amid a global credit crisis that has caused a drastic drop in consumer spending and real estate values. The company had $25 billion in mortgages, notes and loans as of Sept. 30.

The company said Friday that it refinanced $814 million of other mortgage loans to try to stave off bankruptcy. General Growth's woes stem from its $11.3 billion purchase of Columbia-based Rouse Co. in 2004, financed almost completely with debt.

The company's local malls include Harborplace, The Mall in Columbia, White Marsh Mall, Owings Mills Mall, Mondawmin Mall, the Galleria, Towson Town Center and the Village of Cross Keys. General Growth put Cross Keys up for sale this year.

Last month, the company posted disappointing third-quarter results and cut its year-end forecast, weeks after its board ousted its chief executive, president and chief financial officer.

General Growth has a stake in more than 200 shopping malls in 44 states.

After falling as much as 17 percent yesterday, shares of General Growth rebounded to close at $1.85, up 5 cents, or almost 3 percent.

Bloomberg News and the Associated Press contributed to this article.

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