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Bridgewater Commons, Woodbridge Center, Paramus Park and Willowbrook are valuable assets, analyst saysAn early morning bankruptcy filing by General Growth Properties Inc., owner of four major New Jersey shopping malls — Bridgewater Commons, Woodbridge Center, Paramus Park and Willowbrook – was widely anticipated by the real estate industry, and its impact on the state’s retail landscape remains to be seen.

Chicago-based General Growth said it intends to reorganize with the aim of cutting its corporate debt and extending the terms of its mortgage maturities. It also said it will continue operating all of its shopping centers during the bankruptcy process.

Richard Brunelli, president of R.J. Brunelli, a retail real estate broker in Old Bridge, said, “General Growth is one of the premier mall owners in the country and their four New Jersey malls are all very well-located. Willowbrook, for example, is the only regional mall in one of the richest trade areas in New Jersey; Bridgewater is the only regional mall in another one of the richest trade areas of New Jersey. And New Jersey is the second-highest income and most densely populated state in the nation.”

The company, “has incredibly valuable assets here in New Jersey, and if they had to sell off assets to help them get out of bankruptcy there would be no shortage of institutional buyers and other malls operators that would be buyers for these properties.” He added that consumers should not see any direct negative impact from the bankruptcy.

“It is a shame that this premier company, because of the worldwide financial crisis, is going through this dilemma that they can’t get financing when they have mortgages that become due,” Brunelli said. “It is just a sad state of affairs. Maybe there ought to be some TARP money involved for shopping centers.”

Stuart Kessler, president of the Clear Thinking Group in Hillsborough, a consulting firm that advises retailers, also said New Jersey shoppers shouldn’t notice any impact from the bankruptcy filing.

New Jersey has long been considered a very desirable location for retailers, because of the state’s dense and affluent population, and that hasn’t changed, Kessler said.

“Regardless of the doom and gloom out there, the economy will recover and the New York area is still the center of the financial markets for the country, and we have a higher demographics than most markets in the country, and this area will continue to be a desirable place for retailers.”

During a telephone press conference, President Thomas Nolan said 150 of its 200 shopping centers are included in the bankruptcy filing. A center’s inclusion in the filing is not a reflection on its economic viability, but a function of the center’s debt-maturity timetable.

In New Jersey, Willowbrook and Woodbridge Center are included in the filing, while Paramus Park and Bridgewater Commons are not.

“The unprecedented disruption in the credit markets in the last quarter of 2008 shut off our ability to refinance our debt,” Nolan said. GGP’s trophy properties include Faneuil Hall in Boston and the Water Tower in Chicago. The company may sell one or two centers, but “we are not looking at wholesale sales of properties or land.” As the credit crunch hit last fall, GGP considered selling some of its centers but potential buyers were also unable to get credit, Nolan said.

“We have a credit crisis but it is not that the fundamental business model is a problem,” Nolan said. “Our business is very sound and our properties are performing very well. The problem is not the local malls and the communities. Closing shopping centers is not part of this equation.”

He said the bankruptcy filing “will be invisible to shoppers. We are open for business today and we will be open for business in the future.” The company is not planning layoffs as a result of the filing. GGP, the nation’s second-largest shopping mall company, has a stake in more than 200 malls across 44 states.