Ala Moana Owner Bankruptcy?

[TuNnL]

KGMB9 broke the story last night on General Growth Properties. Apparently, they have 20 days to come up with $1 billion in capital to pay off loans, or face default. Tina Chau correctly asserts that GGP’s likely Chapter 11 bankruptcy filing could lead to raising the rent on Ala Moana Shopping Center tenants to pay off creditors!

[Ron Whitfield]

Re: Ala Moana Owner Bankruptcy?

Boo hoo. Since Long's, L&L, and the food court are the only places in AC that I've been able to afford in a long time, I'll cry not for Argentina if the whole joint becomes a used car lot again.

[Vanguard]

Re: Ala Moana Owner Bankruptcy?

Rents are raised, businesses move, and pretty soon, all you have left are these weird new places at the foot court like "IRS Burger".

[Menehune Man]

Re: Ala Moana Owner Bankruptcy?

The problem with all of the corporations and companies going under or needing help, even this situation in Ala Moana is...

Owners, stockholders and other responsible parties are supposed to re-invest in their enterprise or at least pay the bills!

Capitalism works when people are realistic as opposed to being short term over greedy.

Isn't Ala Moana Shopping Center one of the highest business rents in Hawai'i today?

Ho boy...

[Seeking Penance]

Re: Ala Moana Owner Bankruptcy?

bad enough the shops there are expensive

[Composite 2992]

Re: Ala Moana Owner Bankruptcy?

The only reason I go to Ala Moana is the Apple Store. And maybe Macaroni Grill.

They decided to cater to tourists. Now tourism is way down.

And architects made a mess of things by creating all these odd walkways and ramps. Not as bad as the Winchester Mansion but whoever designed the renovations seems to have been inspired by it.

[tutusue]

Re: Ala Moana Owner Bankruptcy?

[...] Isn't Ala Moana Shopping Center one of the highest business rents in Hawai'i today?[...]

I don't have an answer for that but I did hear on the news that AMC is one of GGPs top performing properties.

The only reason I go to Ala Moana is the Apple Store.[...]

Heh! Me, too! And always having my computer in tow prevents me from doing any window shopping...not that that's how I like to waste my time!

[sophielynette]

Re: Ala Moana Owner Bankruptcy?

Nevermind all the people who will lose their jobs if the mall goes under. Nope, we don't care, because we don't shop there anyway.

[anapuni808]

Re: Ala Moana Owner Bankruptcy?

For a business, filing for Chapter 11 Bankruptcy doesn't mean they are closing down & going out of business. It is a way for them to re-organize their finances & resources in order to survive - it gives them the time to find a solution to financial problems.

Look at it realistically - does anyone REALLY think AMC or Ward Center is going out of business? Since I'm not a "shopper", I don't often go either place but I'm not being all concerned that suddenly AMC will be an empty wasteland.

Of course, as often happens - I could be wrong.

[AlohaKine]

Re: Ala Moana Owner Bankruptcy?

Well the State messes with tourism so our economy is already weak as a result, so when the mainland market tanks now we really eat it. GGP is no exception.

[Composite 2992]

Re: Ala Moana Owner Bankruptcy?

I'm not much of an economist. But if GGP raises the rent, and the cost of operations go too high, the shops have to raise prices to cover the increase or shut down.

Then if this recession goes too deep, fewer people are out there with discretionary income. Because many of the stores at Ala Moana sell non-essentials (essentials being groceries and other basic needs), more shops lose their revenue stream and businesses shut down. Unemployment rises and further decreases the number of available consumers.

GGP could sell Ala Moana Center but the new owner would be stuck with the same problems. Somehow GGP needs to do whatever it can to keep the existing businesses afloat. Maybe reconsider the direction they're taking the shopping center. It originally catered to the middle-class local. But in the past couple of decades shifted toward upper-middle-class and upper-class visitors.

Just as companies like Circuit City and Best Buy are having to downsize, GGP has to work fast to survive.

[Honoruru]

Re: Ala Moana Owner Bankruptcy?

One possible scenario under bankruptcy is that GGP will be forced to sell off some of their assets, like Ala Moana Shopping Center, which is very profitable. Remember, the last owner of Ala Moana Shopping Center was Daiei, one of the largest retailer in Japan ... until the bubble burst.

[Adri]

Re: Ala Moana Owner Bankruptcy?

http://www.honoluluadvertiser.com/ar...811120369/1001

"/snip The company's problems stem from its $11.3 billion purchase of mall operator Rouse Co. in 2004. Financed almost entirely with debt, it left the company highly leveraged ever since. /snip"

I have less sympathy for GGP since reading this. It's not that GGP is the unsuspecting victim of a surprising down economy and circumstances beyond its control, it's that GGP got greedy and bought something that didn't really need and clearly couldn't afford. And for such a large business, GGP should have been keeping an eye on the economy.

[anapuni808]

Re: Ala Moana Owner Bankruptcy?

One possible scenario under bankruptcy is that GGP will be forced to sell off some of their assets, like Ala Moana Shopping Center, which is very profitable. Remember, the last owner of Ala Moana Shopping Center was Daiei, one of the largest retailer in Japan ... until the bubble burst.

Even if GGP decides to sell its assets here, the malls will not be shutting down. While they may be downgraded as far as quality of stores or some maintenance, they are not going to be vacated.

I personally don't care who owns the centers. As long as they only cater to rich tourists, I don't go there unless I absolutely have to. I haven't been a fan of Ala Moana Center since the late 70's when they started catering to tourists instead of us.

[MyopicJoe]

Re: Ala Moana Owner Bankruptcy?

I agree with Composite and Anapuni that AMC won't be shut down. It's sitting on prime real estate. Location, location, location and all that.

But as TuNnl mentioned, rents being raised by GGP (or a new owner) is a possibility. If that happens and tourism drops more, the poor stores will be getting it from both ends.

Maybe the rats will finally lose some weight!