On the day that President Barack Obama was going to tell us “happy days are here again,” General Growth Properties, Inc. filed the biggest real estate bankruptcy in American history.
The company owes a whopping $27 billion – which in the private sector is still a pretty big number.
What’s amazing (and frankly a little reassuring) is that at no point in its downward spiral was General Growth dubbed “too big to fail” by federal interventionists and offered a $27 billion bailout.
General Growth collapsed after spending $11.3 billion to buy commercial-property developer Rouse Co. in 2004 only to get caught in the credit crunch and a U.S. recession that has cut spending and property values. Banks have reduced lending amid mortgage-related writedowns. Commercial real estate prices in the U.S. dropped 15 percent last year, according to Moody’s Investors Service. Retail sales in the U.S. fell in March as soaring job losses forced consumers to pull back.
You know, we’ve been to a few malls in recent days and there is hands-down no better place to get a front-row look at the American recession.
Seriously, go to Richland Mall in Columbia, S.C. and take a quick stroll around the mall’s second floor – there’s like one shop still in operation up there.
It’s great for unobstructed power walking, though.