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NEW YORK (Reuters) – General Growth Properties Inc, the second largest U.S. mall owner, filed for bankruptcy protection on Thursday in one of the biggest real estate failures in U.S. history.
Ending months of speculation, the Chicago-based mall owner, which listed total assets of $29.56 billion and total debts of $27.29 billion, sought Chapter 11 bankruptcy protection from creditors along with 158 of its more than 200 U.S. malls, while it seeks to restructure some of its debt.
The artilce goes on to say that this could cause up to 700 banks to fail. I see a lot of small regional banks failing due to overexposure in the commercial market. That is unless the government steps in. Which I am sure it will.
The Real Estate Roundtable, a trade group, estimates that commercial real estate in the U.S. is worth $6.5 trillion and financed by about $3.1 trillion in debt....U.S. banking sector could suffer as much as $250 billion in commercial real-estate losses in this downturn.