One of the nation’s oldest real-estate dynasties, and once one of its richest, has seen its wealth implode from $3.2 billion in June 2008 to about $116 million today. And a possible bankruptcy looms.
The Bucksbaum family, founders and major shareholders of Chicago-based General Growth Properties, are the subject of a gloomy front page report in today’s The Wall Street Journal.
“The family could lose General Growth altogether, along with three generations of hard work that began with a grocery store in Iowa,” reporters Robert Frank and Kris Hudson write. Already, John Bucksbaum, the son of one of two founding brothers, has been forced to resign as Chief Executive Officer by the company’s board.
General Growth Properties (GGP), which is a publicly traded Real Estate Investment Trust, has financial interests in shopping malls in 44 states, including nearly two dozen in California. Among GGP’s in-state properties (managed or owned) are Burbank Town Center, Glendale Galleria, Montclair Plaza, Northridge Fashion Center and Chico Mall.
John Bucksbaum’s father Matthew, and his uncle, Martin launched the company in 1954 when they built a shopping center in Cedar Rapids, Iowa and operated their family’s grocery business from it.
The brothers went on to successfully develop and manage shopping centers and malls and amass a personal fortune.
Matthew, now 82 and listed as chairman emeritus of the GGP board, is a past president of Temple B’nai Jeshurun in Des Moines and a 1999 recipient of the Human Rights Medallion Award from the Chicago Chapter of The American Jewish Committee. In November 2006, Matthew made a $1 million pledge to Hillel at the University of Iowa. Matthew’s brother, Martin, died in his sleep from a heart attack in 1995.
Today’s financial crisis can trace is roots to 2004 when the Bucksbaum’s GGP paid $12 billion in cash and debt to acquire Rouse Co., which owned 37 upscale malls, including Las Vegas’s Fashion Show Mall. Other showcase properties in the newly combined portfolio include Water Tower Place (Chicago), South Street Seaport (Manhattan) and Faneuil Hall (Boston).
The Journal says that GGP has $900 million in loans due this Friday, December 12, 2008, and an additional $3.1 billion due in 2009. In total, the company is carrying more than $27 billion in debt and facing a severe cash flow squeeze. The company’s stock price has fallen more than 97% in the past year, the Journal notes.
John Bucksbaum, whose sister Ann is married to New York Times columnist and bestselling author Thomas L. Friedman, is on the Advisory Board of the Chicago Chapter of the American Jewish Committee. John’s other board memberships include the University of Chicago Hospitals and The Field Museum. His two children, Max and Eli, attend The Latin School in Chicago.