REIT Buys Rival Mall Operator

Global Finance, Oct 2004

THE AMERICAS

General Growth Properties, a Chicago-based real-estate investment trust that specializes in the acquisition of shopping malls, agreed to pay $12.6 billion in cash and assumed debt to acquire Maryland-based Rouse.

The latter has developed such well-known retail and tourist attractions as Baltimore's Inner Harbor, New York's South Street Seaport, Chicago's Water Tower Place and Boston's Faneuil Hall Marketplace.

General Growth says it expects to realize economies of scale from the Rouse acquisition and to gain stronger bargaining power with retailers.

Rouse's upscale properties have sales of $439 a square foot, compared with General Growth's average of about $345 a square foot.

General Growth plans to borrow about $7 billion to fund the purchase and will have a debt total of $23 billion once the deal closes. It also may sell land from Rouse's community development business.