With Malls In Full Meltdown Mode, GGP Goes All-In With $525MM Connecticut Mega-Mall

zerohedge.com / by Tyler Durden / Oct 25, 2017 11:06 AM

So what do you do when your business has entered a period of secular decline due to changing consumer trends which has created an environment of massive oversupply and no pricing power?  Well, if you’re the once-bankrupt commercial REIT, General Growth Properties (GGP), then you build a brand new $525 million mega-mall and make the problem even worse.  Per The Wall Street Journal:

On a bright August morning, GGP Inc., one of the country’s largest mall operators, broke ground on a new shopping mall.

“We’re not building any more,” said GGP Chief Executive Sandeep Mathrani. “This could be it for a long period of time.”

The seemingly risky bet on a new mall comes as retailers close hundreds of stores and malls across the country try to reinvent themselves. While GGP saw an opening to fill what it deemed an underserved area in Norwalk, Conn., about 50 miles north of New York City, it could be one of the last malls of its kind ever built in the U.S.

The $525 million SoNo Collection, as the new mall will be called when it opens in 2019, will be anchored by Nordstrom and Bloomingdale’s and house 80 to 100 smaller stores, including as many as 10 restaurants and potentially a health club. One change from malls of the past: There will be far fewer apparel retailers. GGP has pre-leased about 60% of the available space.

All of which has given GGP shorts a brand new reason to celebrate…

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