Mall builder GGP brings deep pockets to Norwalk opportunity

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GGP’s Norwalk property, comprising parcels 1, 2 and 4 of the Reed-Putnam Urban Renewal Plan, has a thin covering of snow Tuesday.

NORWALK, Conn. – The new owner of a long-vacant Norwalk “bombsite” has much deeper pockets than the developer who invested eight years in it without building anything, according to Norwalk Redevelopment Agency meeting minutes. Conversely, it won’t be as responsive to local interests, the minutes say.

General Growth Properties, a.k.a. GGP, bought the 12-acre property from 95/7 Enterprises, a Spinnaker Real Estate Partners spinoff, in mid-November for $35 million.

GGP is noted as the second largest mall operator in the world, with the third most productive mall portfolio in the United States, Norwalk Redevelopment Agency Executive Director Tim Sheehan is quoted as saying in the minutes for the Nov. 12 RDA meeting. That’s 123 regional American malls, 18 international malls, nine strip centers and seven office properties.

“It would be accurate to state that GGP, as a publicly traded REIT (Real Estate Investment Trust) with real estate assets of $23.91 billion, annual revenues of $2.5 billion and its operating income of $743 million, is a far more economically stable development entity with a much broader access to capital markets than 95/7 Enterprises as a Connecticut-based limited liability company. Additionally, being a REIT, the capital investment strategies between the two entities are vastly different, with GGP being able to sustain a higher degree of development risk,” the minutes quote  Sheehan as saying.

Wall Street investors think of GGP as one of the highest quality shopping center portfolios in the world, though the company filed for Chapter 11 bankruptcy in 2009, the minutes say. Recovery from that bankruptcy included a 2010 deal with the Canadian property company Brookfield Asset Management that involved the infusion of $2.625 billion of equity into GGP, the minutes say.

“The Agency is highly respectful of the accomplishments of Spinnaker as a development company and the product they have brought to the local and regional markets in multi-family housing, office redevelopment and entertainment,” Sheehan is quoted as saying in the minutes. “The GGP portfolio, however, simply dwarfs that of Spinnaker in terms of gross square footage, value and management thereof. It should be noted that Spinnaker’s resources are not fully available to 95/7 Enterprises as a limited liability company, and those are not even proportional to that of 95/7 Ventures, the previous redeveloper, which included Greenfield 95/7 LLC. Additionally, GGP has over 60 employees that staff its development and redevelopment projects, which is far more expansive than 95/7 Enterprises.”

GGP is divesting itself of properties not in line with its core business model – malls – but is strong financially, the minutes say. Spinnaker’s retention of its projects is determined in part by the needs and interests of investors, the minutes say.

“GGP’s ability to hold assets and invest in their subsequent redevelopment allows them to smooth out the market cycles over time, which is much more difficult for smaller developers and their investor pools,” the minutes say. “Conversely, GGP is a national development entity and as such they may not subscribe to local development policy that may be specific to Norwalk as readily as a regional developer would.”


One response to “Mall builder GGP brings deep pockets to Norwalk opportunity”

  1. Oldtimer

    The City has an interest in seeing construction on that property that will add to the grand list and bring in substantial business. Any business income generated on that property will be reflected in tax income for the City. We can only hope to see some results soon. Some recent zoning changes for Lowes will allow big box stores, if that is what the developer has in mind.

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