General Growth Properties (GGP)

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GENERAL GROWTH PROPERTIES, INC. (Debtor-in-Possession)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

COMMISSION FILE NUMBER 1-11656

GENERAL GROWTH PROPERTIES, INC.
(Exact name of registrant as specified in its charter)

(312) 960-5000
(Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:
None

Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
Preferred Stock Purchase Rights

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES o    NO ý

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES o    NO ý

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ý    NO o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ý    NO o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ý

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "accelerated filer" and "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES o    NO ý

         On June 30, 2009, the last business day of the registrant's most recently completed second quarter, the aggregate market value of the shares of common stock held by non-affiliates of the registrant was $522.6 million based upon the closing price of the common stock on such date.

         As of February 24, 2010, there were 317,304,152 shares of the registrant's common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

         Part III is to be filed by amendment no later than April 30, 2010.

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GENERAL GROWTH PROPERTIES, INC.
Annual Report on Form 10-K
December 31, 2009

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PART I

ITEM 1.    BUSINESS

        All references to numbered Notes are to specific footnotes to the Consolidated Financial Statements of General Growth Properties, Inc. ("GGP" or the "Company") as included in this Annual Report on Form 10-K ("Annual Report"). The descriptions (and definitions, if not otherwise defined) included in such Notes are incorporated into the applicable Item response by reference. The following discussion should be read in conjunction with such Consolidated Financial Statements and related Notes. The terms "we," "us" and "our" may also be used to refer to GGP and its subsidiaries.

INTRODUCTION

        GGP is a Delaware corporation, organized in 1986, which operates as a self-administered and self-managed real estate investment trust, referred to as a "REIT." We have ownership interest in, or management responsibility for, over 200 regional shopping malls in 43 states, as well as ownership in master planned communities and commercial office buildings.

        Our business is focused in two main areas:

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Retail and Other—includes the operation, development and management of retail and other rental property, primarily shopping centers



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Master Planned Communities—includes the development and sale of land, primarily in large-scale, long-term community development projects in and around Columbia, Maryland; Summerlin, Nevada; and Houston, Texas and our one residential condominium project located in Natick (Boston), Massachusetts

        Substantially all of our business is conducted through GGP Limited Partnership ("the Operating Partnership" or "GGPLP"). We own one hundred percent of many of our properties and a majority or controlling interest of certain others. As a result, these properties are consolidated under generally accepted accounting principles in the United States of America ("GAAP") and we refer to them as the "Consolidated Properties." Some properties are held through joint venture entities in which we own a non-controlling interest ("Unconsolidated Real Estate Affiliates") and we refer to those properties as the "Unconsolidated Properties." Collectively, we refer to the Consolidated Properties and Unconsolidated Properties as our "Company Portfolio."

        We generally make all key strategic decisions for our Consolidated Properties. However, in connection with the Unconsolidated Properties, such strategic decisions are made with the respective stockholders, members or joint venture partners. We are also the asset manager for most of the Company Portfolio, executing the strategic decisions and overseeing the day-to-day property management functions, including operations, leasing, construction management, maintenance, accounting, marketing and promotional services. With respect to jointly owned properties, we generally conduct the management activities through General Growth Management, Inc. ("GGMI"), one of our taxable REIT subsidiaries ("TRS") which manages, leases, and performs various services for the majority of the properties owned by our Unconsolidated Real Estate Affiliates and 19 properties owned by unaffiliated third parties, all located in the United States, and also performs marketing and strategic partnership services at five of the operating retail properties owned by our Unconsolidated Real Estate Affiliates. All of the 15 operating retail properties owned either through our Brazil or Turkey joint ventures are unconsolidated and are managed by our joint venture partners.

BANKRUPTCY

        On April 16, 2009, the Company, the Operating Partnership and certain of the Company's domestic subsidiaries filed voluntary petitions for relief under Chapter 11 of Title 11 of the United

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States Code ("Chapter 11"). On April 22, 2009 (collectively with April 16, 2009, the "Petition Date"), certain additional domestic subsidiaries (collectively with the Company and the subsidiaries that sought Chapter 11 protection on April 16, 2009, the "Debtors") of the Company also filed voluntary petitions for relief (collectively, the "Chapter 11 Cases"). However, neither GGMI, certain of our wholly-owned subsidiaries, nor any of our joint ventures, (collectively, the "Non-Debtors") either consolidated or unconsolidated, have sought such protection. The Chapter 11 Cases were filed in the Bankruptcy Court of the Southern District of New York (the "Bankruptcy Court") and are currently being jointly administered. A total of 388 Debtors with approximately $21.83 billion of debt filed for Chapter 11 protection.

        The Company and certain of the Debtors are currently operating as "debtors in possession" under the jurisdiction of the Bankruptcy Court and the applicable provisions of the Chapter 11 (Note 1—Debtors in Posession). In general, as debtors in possession, we are authorized under Chapter 11 to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. The Bankruptcy Court has granted a variety of Debtor motions that allow the Company to continue to operate its business in the ordinary course without interruption, and covering, among other things, employee obligations, critical service providers, tax matters, insurance matters, tenant and contractor obligations, claim settlements, ordinary course property sales, cash management, cash collateral, alternative dispute resolution, settlement of the pre-petition mechanics liens and department store transactions.

        The Bankruptcy Court also authorized the Senior Secured Debtor in Possession Credit, Security and Guaranty Agreement (the "DIP Facility") (Note 6) which provides for a $400.0 million term loan. The proceeds of the DIP Facility were used to refinance certain pre-petition secured indebtedness and to fund the Debtors' working capital requirements during Chapter 11.

        On April 16, 2009, and May 21, 2009, respectively, the Company's common stock was suspended from trading, and then de-listed, from the New York Stock Exchange (the "Exchange"). On April 17, 2009, the Company's common stock began trading on the over the counter market referred to as the Pink Sheet Electronic Quotation Service (the "Pink Sheets") under the symbol GGWPQ.

        The bankruptcy petitions triggered defaults on substantially all debt obligations of the Debtors. However, under section 362 of Chapter 11, the filing of a bankruptcy petition automatically stays most actions against the debtor's estate. The Chapter 11 Cases created the protections necessary for the Debtors to be able to develop and begin execution of a restructuring of the Debtors to extend mortgage maturities, reduce corporate debt and overall leverage and establish a sustainable long-term capital structure.

        We are pursuing a deliberate two-stage strategy to accomplish our reorganization, the first step of which is to restructure our property-level secured mortgage debt. As a result, during December 2009, January and February 2010, 231 Debtors (the "Track 1 Debtors") owning 119 properties with $12.33 billion of secured mortgage debt filed consensual plans of reorganization (the "Track 1 Plans") with the Bankruptcy Court. As of December 31, 2009, 113 Debtors owning 50 properties with approximately $4.65 billion of secured mortgage debt restructured such debt and emerged from bankruptcy (the "Track 1A Debtors"). Through March 1, 2010, an additional 92 Debtors owning 57 properties with approximately $5.98 billion of secured mortgage debt restructured such debt and emerged from bankruptcy. Effectiveness of the plans of reorganization and/or restructuring of the $1.70 billion of secured mortgage debt of the remaining Track 1 Debtors (together with the Track 1 Debtors that have already emerged from bankruptcy in 2010, the "Track 1B Debtors") is expected to occur in the first quarter of 2010.

        GGP is continuing to pursue consensual restructurings for 31 Debtors (the "Remaining Secured Debtors") with secured loans aggregating $2.50 billion. The Chapter 11 Cases for the Remaining Secured Debtors and the other remaining Debtors (generally GGP, GGPLP and other holding company

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subsidiaries, the "TopCo Debtors" and together with the Remaining Secured Debtors, the "2010 Track Debtors") will continue until their respective plans of reorganization are filed, approved by the respective creditors, confirmed by the Bankruptcy Court and are effective.

        Although we have successfully restructured $10.65 billion of secured mortgage debt, no agreements have been reached with respect to $2.50 billion of secured debt and $6.51 billion of unsecured debt and we do not yet have a filed or confirmed plan of reorganization for the 2010 Track Debtors. In addition, our share of the secured mortgage debt of our Unconsolidated Real Estate Affiliates maturing in 2010 (excluding the Woodlands MPC and Brazil loans) is $513.8 million (of which $78.3 million has been extended to 2014) and we have not yet restructured or refinanced this secured debt. Therefore, there continues to be the potential for substantially adverse outcomes to these unresolved contingencies which raises substantial doubt about our ability to continue as a going concern (see also Note 1).

GENERAL DEVELOPMENT OF BUSINESS

        In the first quarter of 2009, liquidity was our primary issue. As of March 31, 2009, we had $2.01 billion in past due debt and an additional $4.09 billion of debt that could have been accelerated. We did not have sufficient liquidity to make principal payments on maturing or accelerating debt or pay our past due payables. We reviewed all of our strategic and financial alternatives during the first quarter of 2009 and tried to develop an out of court restructuring plan with our lenders. To forestall certain foreclosure proceedings and to facilitate further negotiations with our secured and unsecured lenders, we filed for bankruptcy in April 2009.

        Prior to and immediately following the bankruptcy filing, we were focused on preservation of capital and maintenance of occupancy levels at our retail and other rental properties. As a result, the typical length of new and renewal leases entered into in 2009 was shorter than historical averages as a result of economic conditions and our financial condition.. Following the filing of the bankruptcy cases through the end of the second quarter of 2009, we focused on stabilizing our business during the Chapter 11 Cases and maintaining the profitability of our operating properties. In the second half of 2009, we recommitted to our strategic repairs and maintenance programs deferred as a result of liquidity issues to ensure that our retail properties continue to provide the right physical environment for our tenants and shoppers. We strategically reduced operational costs, without reducing service levels, and used these savings to further our repairs and maintenance related to property preservation and upkeep.

        During the fourth quarter of 2009, and into 2010, we developed a long term business plan. The business plan is the culmination of a strategic and financial analysis of the Company and all of its assets. The business plan contemplates the continued ownership and operation of most of our retail shopping centers, divestiture of non-core assets and suspension of development projects. It also contemplates the transfer of certain non-performing retail assets to applicable lenders in satisfaction of secured mortgage debt. The business plan provides the framework for the two key strategic initiatives we have undertaken. The first initiative was the design and restructuring of the balance sheet to create the sustainable long-term capital structure we desire upon emergence from bankruptcy. We developed and commenced a deliberate two stage strategy for our balance sheet restructuring and emergence. We have made substantial progress on the first stage of the strategy, which includes the extension of the maturity dates of our secured mortgage debt and the emergence from bankruptcy of the Debtors associated with such debt. We are working on the second stage of the strategy, restructuring of the TopCo Debtors and have undertaken a process to explore all possible alternatives for emergence of the TopCo Debtors.

        The second key strategic initiative arising from the business plan is the development of a long term operational strategy. We developed and launched the two necessary processes we identified for creation of a strategy designed to increase long-term net operating income ("NOI"). These two processes include a reengineering program and a strategic planning process for each of our retail shopping centers.

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        Our business plan is subject to change and would be changed if the agreement in principal with Brookfield Asset Management Inc. is consummated. See "Item 7. Management's Discussion and Analysis of Financial condition and Results of Operations; Overview—Introduction" for a discussion of the agreement in principle.

        In the fourth quarter of 2008, we halted or deferred substantially all of our development and redevelopment projects, other than projects which were substantially complete, projects at properties owned by our Unconsolidated Real Estate Affiliates, and projects with commitments we were obligated to fulfill. Costs to complete, or that we are obligated to pay (subject to any confirmed plan of reorganization of the TopCo Debtors) related to our remaining active domestic projects are expected to be approximately $248.0 million in 2010 and beyond. Our current business plan contemplates that we will not have sufficient capital to complete the substantial majority of our deferred development and redevelopment projects nor to continue to hold certain non-performing retail assets. Accordingly, we recorded approximately $1.22 billion in property, goodwill and project impairments in 2009.

        From 2005 to the third quarter of 2008, our focus was on development projects, including new development and redevelopment and expansion of existing properties. In such regard, we opened in September 2007 The Natick Collection in Natick, Massachusetts, which, anchored by Nordstrom, Neiman Marcus, JC Penney, Lord & Taylor, Macy's and Sears, is the largest mall in New England. Additionally, we opened The Shops at Fallen Timbers in Maumee, Ohio in October 2007. In March 2008, we opened The Shoppes at River Crossing in Macon, Georgia, an approximately 659,000 square foot open-air center anchored by Dillard's and Belk. Two significant projects in progress in 2008 which were completed in 2009 were the 138,000 square foot expansion of the Fashion Place Mall in Murray Utah (consisting of a Nordstrom and certain national restaurant tenants) in the spring of 2009 and a 165,000 square foot expansion and food court renovation at the Christiana Mall in Newark, Delaware which opened in November 2009. Internationally, in Brazil, our joint venture opened Caxias Shopping (an approximately 275,500 square foot center in Rio de Janeiro) in November 2008 and, in 2009, Boulevard Brasilia (an approximately 182,000 square foot project in Brasilia) and Boulevard Shopping Belem (approximately 366,000 square feet of retail space in Belem) in June and November, respectively.

        Prior to and through the acquisition of The Rouse Company in November 2004 (the "TRC Merger"), acquisitions have been a key contributor to our growth. Since 2005, our only major acquisition has been the July 6, 2007 acquisition of the fifty percent interest owned by New York State Common Retirement Fund ("NYSCRF") in the GGP/Homart I portfolio of 19 regional shopping malls, one community center and three regional shopping malls owned with NYSCRF pursuant to an election by NYSCRF to exercise its exchange right with respect to its ownership in GGP/Homart I and the February 29, 2008 acquisition of the Shoppes at the Palazzo in Las Vegas Nevada (Note 3).

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

        Reference is made to Note 16 for information regarding our segments.

NARRATIVE DESCRIPTION OF BUSINESS

Retail and Other Segment

        Our Retail and Other segment consists of retail centers, office and industrial buildings and mixed-use and other properties.

Retail Portfolio

        The retail properties in our retail and other segment ("Retail Portfolio") is comprised primarily of regional shopping centers, but also includes festival market places, urban mixed-use centers and strip/community centers. Most of our shopping centers are strategically located in major and middle markets

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throughout the United States where they have strong competitive positions. Most of these properties contain at least one major department store or other large retail store with Gross Leaseable Area ("GLA") greater than 30,000 square feet (an "Anchor"). We also own non-controlling interests in various international joint ventures in Brazil, Turkey and Costa Rica and we believe the Retail Portfolio's geographic diversification mitigates the effects of regional economic conditions and local factors. We entered into an agreement to sell our investment in Costa Rica for $7.5 million, yielding a nominal gain that we expect will be recognized in the first quarter of 2010.

        A detailed listing of the principal properties in our Retail Portfolio is included in Item 2 of this Annual Report.

        The majority of the income from the properties in the Retail Portfolio is derived from rents received through long-term leases with retail tenants. These long-term leases generally require the tenants to pay base rent which is a fixed amount specified in the lease. The base rent is often subject to scheduled increases during the term of the lease. Another component of income is Overage Rent ("Overage Rent"). Overage Rent is paid by a tenant when its sales exceed an agreed upon minimum amount. Overage Rent is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease, the majority of which is typically earned in the fourth quarter. Our leases include both a base rent component and a component which requires tenants to pay amounts related to all, or substantially all, of their share of real estate taxes and certain property operating expenses, including common area maintenance and insurance. The revenue earned attributable to real estate tax and operating expense recoveries are recorded as "Tenant recoveries."

        The following table reflects retail tenant representation by category for the domestic Consolidated Properties as of December 31, 2009. In general, similar percentages existed for the Unconsolidated Properties.

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        For the year ended December 31, 2009, our largest tenant (based on common parent ownership) accounted for approximately 3% of consolidated rents.

Other Office, Industrial and Mixed-Use Buildings

        Office and other properties are primarily components of large-scale mixed-use properties (which include retail, parking and other uses) located in urban markets. In addition, we own certain free-standing office or industrial properties in office parks in the Baltimore/Washington, D.C. and Las Vegas markets. We own approximately seven million square feet of leaseable office and industrial space, including properties adjacent to our retail centers.

Master Planned Communities Segment

        The Master Planned Communities segment is comprised primarily of the following large-scale, long-term community development projects:

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        We develop and sell land in these communities to builders and other developers for residential, commercial and other uses. Additionally, certain saleable land within these properties may be transferred to our Retail and Other segment to be developed as commercial properties for either our own use or to be operated as investment rental property. Finally, our 215 unit residential condominium project (Nouvelle at Natick in Natick (Boston), Massachusetts) has been reflected within this segment.

OTHER BUSINESS INFORMATION

Competition

        The nature and extent of the competition we face varies from property to property within each segment of our business. In our Retail and Other segment, our direct competitors include other publicly-traded retail mall development and operating companies, retail real estate companies, commercial property developers and other owners of retail real estate that engage in similar businesses.

        Within our Retail Portfolio, we compete for retail tenants. We believe the principal factors that retailers consider in making their leasing decision include:

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Consumer demographics



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Quality, design and location of properties



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Total number and geographic distribution of properties



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Diversity of retailers and anchor tenants at shopping center locations



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Management and operational expertise



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Rental rates

        Based on these criteria, we believe that the size and scope of our property portfolio, as well as the overall quality and attractiveness of our individual properties, enable us to compete effectively for retail tenants in our local markets. Because our revenue potential is linked to the success of our retailers, we indirectly share exposure to the same competitive factors that our retail tenants experience in their respective markets when trying to attract individual shoppers. These dynamics include general competition from other regional shopping centers, including outlet malls and other discount shopping centers, as well as competition with discount shopping clubs, catalog companies, internet sales and telemarketing. We believe that we have a competitive advantage with respect to operational retail property management as our expertise allows us to evaluate existing retail properties for their increased profit potential through expansion, remodeling, re-merchandising and more efficient management of the property.

        With respect to our office and other properties, we experience competition in the development and management of our properties similar to that of our Retail Portfolio. Prospective tenants generally consider quality and appearance, amenities, location relative to other commercial activity and price in determining the attractiveness of our properties. Based on the quality and location of our properties, which are generally in urban markets or are concentrated in the commercial centers of our master planned communities, we believe that our properties are viewed favorably among prospective tenants.

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        In our Master Planned Communities segment, we compete with other landholders and residential and commercial property developers in the development of properties within the Baltimore/Washington, D.C., Las Vegas and Houston markets. Significant factors which we believe allow us to compete effectively in this business include:

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The size and scope of our master planned communities



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The recreational and cultural amenities available within the communities



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The commercial centers in the communities, including those retail properties that we own and/or operate



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Our relationships with homebuilders



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The proximity to major metropolitan areas

Environmental Matters

        Under various Federal, state and local laws and regulations, an owner of real estate is liable for the costs of removal or remediation of certain hazardous or toxic substances on such real estate. These laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous or toxic substances. The costs of remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to promptly remediate such substances, may adversely affect the owner's ability to sell such real estate or to borrow using such real estate as collateral. In connection with our ownership and operation of our properties, we, or the relevant joint venture through which the property is owned, may be potentially liable for such costs.

        Substantially all of our properties have been subject to Phase I environmental assessments, which are intended to evaluate the environmental condition of the surveyed and surrounding properties. The Phase I environmental assessments included a historical review, a public records review, a preliminary investigation of the site and surrounding properties, screening for the presence of asbestos, polychlorinated biphenyls ("PCBs") and underground storage tanks and the preparation and issuance of a written report, but do not include soil sampling or subsurface investigations. A Phase II assessment, when necessary, was conducted to further investigate any issues raised by the Phase I assessment. In each case where Phase I and/or Phase II assessments resulted in specific recommendations for remedial actions required by law, management has either taken or scheduled the recommended action.

        Neither the Phase I nor the Phase II assessments have revealed any environmental liability that we believe would have a material adverse effect on our overall business, financial condition or results of operations. Nevertheless, it is possible that these assessments do not reveal all environmental liabilities or that there are material environmental liabilities of which we are unaware. Moreover, no assurances can be given that future laws, ordinances or regulations will not impose any material environmental liability or the current environmental condition of our properties will not be adversely affected by tenants and occupants of the properties, by the condition of properties in the vicinity of our properties (such as the presence on such properties of underground storage tanks) or by third parties unrelated to us.

        Future development opportunities may require additional capital and other expenditures in order to comply with federal, state and local statutes and regulations relating to the protection of the environment. However, we may not have sufficient liquidity to comply with such statutes and regulations and may be required to halt or defer such development projects. We cannot predict with any certainty the magnitude of any such expenditures or the long-range effect, if any, on our operations. Compliance with such laws has not had a material adverse effect on our operating results or competitive position in the past but could have such an effect in the future.

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Employees

        As of December 31, 2009, we had approximately 3,200 employees.

Qualification as a Real Estate Investment Trust and Taxability of Distributions

        GGP currently qualifies as a real estate investment trust pursuant to the requirements contained in Sections 856-858 of the Internal Revenue Code of 1986, as amended (the "Code"). If, as we contemplate, such qualification continues, GGP will not be subject to Federal tax on its real estate investment trust taxable income. During 2009, GGP met its distribution requirements to its common stockholders as provided for in Section 857 of the Code (Notes 1 and 7).

Available Information

        Our Internet website address is www.ggp.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Interactive Data Files, Current Reports on Form 8-K and amendments to those reports are available and may be accessed free of charge through the Investment section of our Internet website under the Shareholder Info subsection, as soon as reasonably practicable after those documents are filed with, or furnished to, the SEC. Our Internet website and included or linked information on the website are not intended to be incorporated into this Annual Report.

        As a result of our Chapter 11 filing, we are now required to periodically file various documents with, and provide certain information to, the Bankruptcy Court, including statements of financial affairs, schedules of assets and liabilities, and monthly operating reports in forms prescribed by Chapter 11 or the U. S. Trustee, as well as certain financial information on an unconsolidated basis. Such materials will be prepared according to requirements of Chapter 11. While we believe that these documents and reports provide then-current information required under Chapter 11, they are prepared only for the Debtors and, hence, certain operational entities are excluded. In addition, they are prepared in a format different from that used in this Annual Report and other reports we file with the SEC and there has not been and there will not be any association of our independent registered public accounting firm with such information. Accordingly, we believe that the substance and format of our bankruptcy related filed reports do not allow meaningful comparison with our regular publicly-disclosed consolidated financial statements. Moreover, the materials filed with the Bankruptcy Court are not prepared for the purpose of providing a basis for an investment decision relating to our securities, or for comparison with other financial information filed with the SEC.

ITEM 1A.    RISK FACTORS

BANKRUPTCY RISKS

We filed for protection under Chapter 11 of the Bankruptcy Code

        As more fully described in Item 1 Business, the Debtors filed voluntary petitions to reorganize under Chapter 11 on April 16 and April 22, 2009. As of December 31, 2009, the Track 1A Debtors have emerged from bankruptcy protection pursuant to confirmed plans of reorganization. The Chapter 11 Cases relating to certain Track 1 Debtors and the 2010 Track Debtors, however, are still pending. During the remaining Chapter 11 Cases, we plan to continue to operate our business as it relates to these Debtors as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of Chapter 11. Our operations, including our ability to execute our business plan, are subject to the risks and uncertainties associated with the continuing bankruptcy proceedings of certain Debtors, including, but not limited to, the following:

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Actions and decisions of our creditors and other third parties with interests in our remaining Chapter 11 Cases may be inconsistent with our plans

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We may be unable to obtain Bankruptcy Court approval with respect to motions in the remaining Chapter 11 Cases that we believe are in the best interests of the Company



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We may be unable to successfully develop, prosecute, confirm and consummate a plan or plans of reorganization with respect to the Chapter 11 Cases for the Remaining Secured Debtors or TopCo Debtors (the "TopCo Plan of Reorganization")



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We may encounter third parties seeking and obtaining Bankruptcy Court approval to terminate or shorten the exclusive periods for us to propose and confirm a plan of reorganization for the 2010 Track Debtors, to appoint a Chapter 11 trustee or to convert the remaining Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code



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We may not be able to satisfy the REIT distribution requirements and therefore be unable to remain qualified as a REIT



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Our access to capital to fund ongoing business operations, fund emergence costs or initiate or continue development or redevelopment at our properties may be limited

        The ultimate impact that events that occur during the bankruptcy proceedings will have on our business, financial condition and results of operations cannot be predicted or quantified.

Our DIP Credit Agreement may not provide sufficient liquidity during the remaining Chapter 11 Cases

        In the event that cash flows and borrowings under the DIP Credit Agreement are not sufficient to meet our liquidity requirements, including the emergence costs for the Track 1 Debtors, we may be required to seek additional financing. There can be no assurance that such additional financing would be available or, if available, would be offered on acceptable terms. Failure to secure any necessary additional financing would have a material adverse impact on our operations and ongoing viability.

Operating under Chapter 11 may restrict our ability to pursue our business strategies

        Under Chapter 11, transactions outside the ordinary course of business will be subject to the prior approval of the Bankruptcy Court, which may limit our ability to respond in a timely manner to certain events or take advantage of certain opportunities. We must obtain Bankruptcy Court approval to, among other things:

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Engage in certain transactions with our tenants



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Sell assets outside the ordinary course of business



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Consolidate, merge, sell or otherwise dispose of all or substantially all of our assets



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Grant liens



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Finance our operations, investments or other capital needs or to engage in other business activities that would be in our interest

The pursuit of the Chapter 11 Cases has consumed and will consume a substantial portion of the time and attention of our corporate management and will impact how our business is conducted, which may have an adverse effect on our business and results of operations

        The requirements of the Chapter 11 Cases has consumed and will continue to consume a substantial portion of our corporate management's time and attention and leave them with less time to devote to the operations of our business. Our management has spent considerable time developing the emergence plans for the Track 1 Debtors and the 2010 Track Debtors and the business plan for the Company. This diversion of corporate management's attention may have a material adverse effect on the conduct of our business, and, as a result, on our financial condition and results of operations, particularly if the Chapter 11 Cases are protracted.

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Our employees are facing considerable distractions and uncertainty due to the Chapter 11 Cases

        As a result of the Chapter 11 Cases, our employees are facing considerable distractions and uncertainty. A material erosion of employee morale could have a material adverse effect on our business, particularly if the Chapter 11 Cases are protracted.

The Company's business could suffer from the Chapter 11 Cases

        The Chapter 11 Cases may negatively impact the operations of the Company. While the potential negative impact cannot be predicted or quantified, risks include:

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Our ability to retain and/or renew existing tenants and/or to obtain favorable lease terms may be hampered



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We may be unable to build new tenant relationships and desirable new tenants may have concerns about entering into leases at our properties



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Our ability to obtain and maintain commercially reasonable terms with vendors, strategic partners and service providers may be hampered



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Our ability to obtain and maintain contracts necessary to continue our operations at affordable rates with competitive terms may be impaired

The Company's businesses could suffer from a long and protracted restructuring

        The Company's future results are dependent upon the successful filing, confirmation and implementation of plans of reorganization for the 2010 Track Debtors. Failure to complete the reorganization process in a timely manner could adversely affect the Company's operating results, including its relationships with tenants and suppliers. If a liquidation or protracted reorganization were to occur, there is a significant risk that the value of the Company's enterprise would be substantially eroded to the detriment of all stakeholders.

        Furthermore, the Company cannot predict the ultimate amount of all settlement terms for the Debtors' liabilities that will be subject to a plan of reorganization. Even once a plan of reorganization is implemented, the Company's operating results may be adversely affected by the possible reluctance of prospective lenders, tenants, and suppliers to do business with a company that recently emerged from bankruptcy proceedings.

Our ability to emerge from the Chapter 11 Cases will depend on obtaining sufficient exit financing or capital or the pursuit of a change of control transaction

        For the TopCo Plan of Reorganization to be effective, we will need to obtain and demonstrate the sufficiency of exit financing or capital to fund the remaining emergence costs of the Track 1 Debtors and the emergence costs of the 2010 Track Debtors. In addition to funding ongoing operational needs, exit financing or capital must be sufficient to fund certain emergence costs of the Track 1 Debtors as well as the TopCo Debtors to the extent existing cash reserves or operating cash flows are not sufficient. We cannot presently determine the final terms of such financing, nor can there be any assurances of our success in obtaining it. In addition to pursuing traditional and non-traditional forms of exit financing or capital, we also intend to explore potential merger and acquisition or other change of control transactions with financial and strategic investors. Failure to obtain exit financing or capital or conclude a change of control transaction may further delay the emergence of the 2010 Track Debtors from bankruptcy protection.

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LIQUIDITY RISKS

We may not have sufficient cash to maintain our operations and fund our emergence costs

        As discussed above under "Bankruptcy Risks," our DIP Credit Facility may not provide sufficient liquidity during the remaining Chapter 11 Cases and exit financing or capital may not be sufficient to support our operations post-emergence. Our operating cash flows and exit financing or capital may not be sufficient to pay our debt as it comes due, interest on our debt, emergence costs and other operating expenses. We face significantly higher operating expenses due in part to payments to our financial and legal advisors, as well as fees and other amounts payable to our lenders in connection with loan restructurings. Because we have limited short-term sources of cash, in the event such sources are insufficient to fund our needs, we may be unable to successfully emerge from bankruptcy or implement our plan of reorganization.

We may be subject to claims that will not be discharged in the Chapter 11 Cases

        The Bankruptcy Code provides that the confirmation of a plan of reorganization discharges a debtor from substantially all debts arising prior to confirmation and specified debts arising afterwards. With few exceptions, all claims that arose prior to the Petition Date and before confirmation of the plan of reorganization (i) would be subject to compromise and/or treatment under the plan of reorganization or (ii) would be discharged in accordance with the Bankruptcy Code and the terms of the plan of reorganization. We currently do not believe that the aggregate amount of claims that will not be subject to treatment under the plan of reorganization or not discharged, will be material, although such aggregate amount are not expected to have a material adverse effect on our liquidity position.

We may not be able to raise capital through the sale of properties

        Our ability to sell our properties to raise capital is limited. The retail economic climate negatively affects the value of our properties and therefore reduces our ability to sell these properties on acceptable terms. Our ability to sell our properties is also negatively affected by the weakness of the credit markets, which increases the cost and difficulty for potential purchasers to acquire financing, as well as by the illiquid nature of real estate. Finally, our Chapter 11 Cases may encourage potential purchasers to offer less attractive terms for our properties and may delay any potential sale transaction and any such transaction contemplated by a Debtor must be approved by the Bankruptcy Court. See "Business Risks" for a further discussion of the effects of the retail economic climate on our properties, as well as the illiquid nature of our investments in our properties.

        We have a low tax basis in many of our properties relative to the fair market value of such properties. As a result of this low tax basis, we could recognize a substantial taxable gain upon the sale of such properties, which would impact the amount of net proceeds we would retain from any such sales as a result of the REIT distribution requirements.

We may not be able to refinance, extend or repay our portion of substantial indebtedness at our Unconsolidated Properties, which could have a material adverse affect on our business, financial condition, results of operations and common stock price

        Our Unconsolidated Properties have a substantial amount of debt which they not be able to extend, refinance or repay. As of December 31, 2009, our share of indebtedness secured by our Unconsolidated Properties was $3.12 billion (Note 5). There can be no assurance that our Unconsolidated Properties will be able to refinance or extend their debt on acceptable terms or otherwise. The ability to refinance this debt is negatively affected by the current condition of the credit markets, which have significantly reduced the levels of capacity of commercial lending. The ability to successfully refinance or extend this debt may also be negatively affected by our bankruptcy

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proceedings as well as the real or perceived decline in the value of our Unconsolidated Properties based on general and retail economic conditions, as discussed further below.

Our substantial indebtedness adversely affects our financial health and operating flexibility

        Our indebtedness could have important consequences to us and the value of our common stock, including:

•

Limiting our ability to borrow additional amounts for working capital, capital expenditures, debt service requirements, execution of our business strategy or other purposes



•

Limiting our ability to use operating cash flow in other areas of our business or to pay dividends because we must dedicate a substantial portion of these funds to service debt



•

Increasing our vulnerability to general adverse economic and industry conditions, including increases in interest rates, particularly given our substantial indebtedness which bears interest at variable rates



•

Limiting our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in government regulation



•

Limiting our ability or increasing the costs to refinance indebtedness



•

Limiting our ability to enter into marketing and hedging transactions by reducing the number of counterparties with whom we can enter into such transactions as well as the volume of those transactions

Refinanced debt contains restrictions and less attractive covenants

        We have refinanced $10.65 billion of secured mortgage debt since the Petition Date. The terms of certain debt require us to satisfy certain customary affirmative and negative covenants and to meet financial ratios and tests, including ratios and tests based on leverage, interest coverage and net worth. The covenants and other restrictions under our debt agreements affect, among other things, our ability to:

•

Incur indebtedness



•

Create liens on assets



•

Sell assets



•

Manage our cash flows



•

Transfer assets to other subsidiaries



•

Make capital expenditures



•

Engage in mergers and acquisitions



•

Make distributions to equity holders, including holders of our common stock

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        Due to the current lending environment, our bankruptcy proceedings, our financial condition and general economic factors, this refinanced debt contains certain terms which are less attractive than the terms contained in the debt being refinanced. Such terms include more restrictive operational and financial covenants, restrictions on the distribution of cash flows from properties serving as collateral for the debt and higher fees and, in certain instances, higher interest rates. These fees and cash flow restrictions may affect our ability to fund our on-going operations from our operating cash flows and we may be significantly limited in our operating and financial flexibility and thus may be limited in our ability to respond to changes in our business or competitive activities.

COMMON STOCK RISKS

Trading in our securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. It is possible our common stock will be cancelled and that holders of such common stock will not receive any distribution with respect to, or be able to recover any portion of, their investments

        It is not possible to determine if the TopCo Plan of Reorganization will allow for distributions with respect to our common stock and other outstanding equity interests. It is possible that these equity interests will be cancelled and extinguished upon the approval of the Bankruptcy Court and the holders thereof would not be entitled to receive, and would not receive or retain, any property or interest in property on account of such equity interests. In the event of a cancellation of these equity interests, amounts invested by such holders in our outstanding equity securities will not be recoverable. Consequently, our currently outstanding common stock would have no value. Trading prices for our common stock are very volatile and may bear little or no relationship to the actual recovery, if any, by the holders of such securities in the Chapter 11 Cases. Accordingly, we urge that extreme caution be exercised with respect to existing and future investments in our equity securities and any of our other securities.

Our common stock was delisted from the Exchange and is not listed on any other national securities exchange

        On April 17, 2009, the Company's common stock began trading in the over the counter market in the Pink Sheets under the symbol GGWPQ. The last day that the Company's common stock traded on the Exchange was April 16, 2009.

        We can provide no assurance that we will be able to re-list our common stock on a national securities exchange or that the stock will continue being traded on the Pink Sheets. The trading of our common stock on the Pink Sheets rather than the Exchange may negatively impact the trading price of our common stock and the levels of liquidity available to our stockholders. In addition, securities that trade on the Pink Sheets are not eligible for margin loans and make our common stock subject to the provisions of Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly referred to as the "penny stock rule."

Risks of trading in an over the counter market

        Securities traded in the over-the-counter market generally have significantly less liquidity than securities traded on a national securities exchange, through factors such as a reduction in the number of investors that will consider investing in the securities, the number of market makers in the securities, reduction in securities analyst and news media coverage and lower market prices than might otherwise be obtained. As a result, holders of shares of our common stock may find it difficult to resell their shares at prices quoted in the market or at all. Furthermore, because of the limited market and generally low volume of trading in our common stock that could occur, the share price of our common stock could be more likely to be affected by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in the markets perception of our business, and announcements made by us, our competitors or parties with whom we have business relationships. With

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respect to the Company, in some cases, we may be subject to additional compliance requirements under applicable state laws in the issuance of our securities. The lack of liquidity in our common stock may also make it difficult for us to issue additional securities for financing or other purposes, or to otherwise arrange for any financing we may need in the future.

If holders of common stock recover any portion of their investment they may be subject to substantial dilution as a result of future issuances of our common stock

        We may issue common stock to satisfy creditors of the TopCo Debtors and the TopCo Plan of Reorganization may include an equity-based incentive compensation plan. The amount and dilutive effect of any such issuance can not be determined at this time.

        We may also issue shares of our common stock to meet our obligations under the Contingent Stock Agreement under which we assumed the obligations of TRC to the beneficiaries thereunder (the "CSA"). In addition, we have reserved a number of shares of common stock for issuance under our restricted stock and option plans for employees and directors and in connection with certain other obligations, including convertible debt and these shares will be available for sale from time to time. Finally, we issued approximately 4.9 million shares of common stock as a taxable stock dividend in order to satisfy the requirements for qualification of a REIT and we currently expect to continue to issue taxable stock dividends to satisfy the requirements for REIT qualification.

BUSINESS RISKS

Economic conditions, especially in the retail sector, may have an adverse affect on our revenues and available cash

        General and retail economic conditions continue to be weak, and we do not expect a near term return to the economic conditions that prevailed in 2007. High unemployment, weak income growth, tight credit and the need to pay down existing debt are expected to continue to negatively impact consumer spending. Given these economic conditions, we believe there is a significant risk that the sales of stores operating in our centers will either not improve, or will improve slowly which will have the following negative effect on our operations:

        Ability to lease and collect rent.    Our results of operations depend on our ability to continue to lease space in our properties on economically favorable terms. If the sales of certain stores operating in our centers do not improve sufficiently, tenants might be unable to pay their existing minimum rents or expense recovery charges, since these rents and charges would represent a higher percentage of their sales. If our tenants' sales do not improve, new tenants would be less likely to be willing to pay minimum rents as high as they would otherwise pay. In addition, as substantially all of our income is derived from rentals of real property, our income and cash available for debt service, operations or distribution to our stockholders would be adversely affected if a significant number of tenants were unable to meet their obligations to us.

        Bankruptcy or store closures of tenants.    Our leases generally do not contain provisions designed to ensure the creditworthiness of the tenant, and a number of companies in the retail industry, including some of our tenants, have declared bankruptcy or voluntarily closed certain of their stores in recent years. The bankruptcy or closure of a major tenant, particularly an Anchor, may have a material adverse effect on the retail properties affected and the income produced by these properties and may make it substantially more difficult to lease the remainder of the affected retail properties. As a result, the bankruptcy or closure of a major tenant and potential additional closures as a result of co-tenancy requirements could result in a lower level of revenues and cash available.

        Department store productivity.    Department store consolidations, as well as declining sales productivity in certain instances, are resulting in the closure of existing department stores and we may

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be unable to re-lease this area or to re-lease it on comparable or more favorable terms. Other tenants may be entitled to modify the terms of their existing leases, including those pertaining to rent payment, in the event of such closures. Additionally, department store closures could result in decreased customer traffic which could lead to decreased sales at other stores.

        Ability to attract new tenants.    The factors described above not only affect our current tenants and operations, but also affect our ability to attract new tenants.

It may be difficult to buy and sell real estate quickly, and transfer restrictions apply to some of our properties

        Equity real estate investments are relatively illiquid, and this characteristic tends to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions. In addition, significant expenditures associated with each equity investment, such as mortgage payments, real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investment. If income from a property declines while the related expenses do not decline, our income and cash available to us would be adversely affected. If it becomes necessary or desirable for us to dispose of one or more of the mortgaged properties, we might not be able to obtain a release of the lien on the mortgaged property without payment of the associated debt. The foreclosure of a mortgage on a property or inability to sell a property could adversely affect the level of cash available to us.

        If we have a change in control, as defined in section 382 of the Code, our ability to use our net operating loss and interest expense carryforwards to offset future cash taxes may be reduced or eliminated. The significant stock activity we have recently experienced and the possibility of issuing additional equity to address our liquidity needs increases the risk of this provision impacting us in the future.

We invest primarily in regional shopping centers and other properties, which are subject to a number of significant risks which are beyond our control

        Real property investments are subject to varying degrees of risk that may affect the ability of our properties to generate sufficient revenues. A number of factors may decrease the income generated by a retail property, including:

•

The regional and local economy, which may be negatively impacted by plant closings, industry slowdowns, adverse weather conditions, natural disasters and other factors



•

Local real estate conditions, such as an oversupply of, or a reduction in demand for, retail space or retail goods, and the availability and creditworthiness of current and prospective tenants



•

Perceptions by retailers or shoppers of the safety, convenience and attractiveness of the retail property



•

The convenience and quality of competing retail properties and other retailing options such as the internet



•

Changes in laws and regulations applicable to real property, including tax and zoning laws

        Our Master Planned Communities are also affected by some of the above factors, as well as the significant weakening of the housing market which began in 2007 and is expected to continue.

        If we are unable to generate sufficient revenue from our properties, including those held by joint ventures, we will be unable to meet operating and other expenses, including debt service, lease payments, capital expenditures and tenant improvements, and to make distributions from our joint ventures and then, in turn, to our stockholders.

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We develop and expand properties, and this activity is subject to various risks

        Although we have significantly reduced our development and expansion activities, certain development and expansion projects will be undertaken. In connection with any development or expansion, we will be subject to various risks, including the following:

•

We may abandon development or expansion activities already under way, which may result in additional cost recognition



•

Construction costs of a project may exceed original estimates or available financing, possibly making the project unfeasible or unprofitable



•

We may not be able to obtain zoning, occupancy or other required governmental permits and authorizations



•

Occupancy rates and rents at a completed project may not meet projections and, therefore, the project may not be profitable



•

We may not be able to obtain Anchor, mortgage lender and property partner approvals, if applicable, for expansion or redevelopment activities

        If a development project is unsuccessful, our investment in the project may not be fully recoverable from future operations or sale.

We may incur costs to comply with environmental laws

        Under various federal, state or local laws, ordinances and regulations, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property, and may be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by the parties in connection with the contamination. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous or toxic substances. The presence of contamination or the failure to remediate contamination may adversely affect the owner's ability to sell or lease real estate or to borrow using the real estate as collateral. Other federal, state and local laws, ordinances and regulations require abatement or removal of asbestos-containing materials in the event of demolition or certain renovations or remodeling, the cost of which may be substantial for some of our redevelopments, and also govern emissions of and exposure to asbestos fibers in the air. Federal and state laws also regulate the operation and removal of underground storage tanks. In connection with the ownership, operation and management of our properties, we could be held liable for the costs of remedial action with respect to these regulated substances or tanks or related claims.

        Our properties have been subjected to varying degrees of environmental assessment at various times. However, the identification of new areas of contamination, a change in the extent or known scope of contamination or changes in cleanup requirements could result in significant costs to us.

We are in a competitive business

        There are numerous shopping facilities that compete with our properties in attracting retailers to lease space. Our Chapter 11 Cases may impair the desirability and competitiveness of our shopping facilities. In addition, retailers at our properties face continued competition from retailers at other regional shopping centers, including outlet malls and other discount shopping centers, discount shopping clubs, catalog companies, internet sales and telemarketing. Competition of this type could adversely affect our revenues and cash available for repayment of our debt and distribution to our stockholders.

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        We compete with other major real estate investors with significant capital for attractive investment opportunities. These competitors include other REITs, investment banking firms and private institutional investors.

Some of our properties are subject to potential natural or other disasters

        A number of our properties are located in areas which are subject to natural disasters. For example, two of our properties, located in the New Orleans area, suffered major hurricane and/or vandalism damage in 2005. It is uncertain as to whether the New Orleans area will recover to its prior economic strength. Certain of our properties are located in California or in other areas with higher risk of earthquakes. In addition, many of our properties are located in coastal regions, and would therefore be affected by any future increases in sea levels or in the frequency or severity of hurricanes and tropical storms, whether such increases are caused by global climate changes or other factors.

Possible terrorist activity or other acts of violence could adversely affect our financial condition and results of operations

        Future terrorist attacks in the United States, and other acts of violence, including terrorism or war, might result in declining economic activity, which could harm the demand for goods and services offered by our tenants and the value of our properties and might adversely affect the value of an investment in our securities. A decrease in retail demand could make it difficult for us to renew or re–lease our properties at lease rates equal to or above historical rates. Terrorist activities or violence also could directly affect the value of our properties through damage, destruction or loss, and the availability of insurance for such acts, or of insurance generally, might be lower, or cost more, which could increase our operating expenses and adversely affect our financial condition and results of operations. To the extent that our tenants are affected by future attacks, their businesses similarly could be adversely affected, including their ability to continue to meet obligations under their existing leases. These acts might erode business and consumer confidence and spending, and might result in increased volatility in national and international financial markets and economies. Any one of these events might decrease demand for real estate, decrease or delay the occupancy of our new or redeveloped properties, and limit our access to capital or increase our cost of raising capital.

Some potential losses are not insured

        We carry comprehensive liability, fire, flood, earthquake, terrorism, extended coverage and rental loss insurance on all of our properties. We believe the policy specifications and insured limits of these policies are adequate and appropriate. There are, however, some types of losses, including lease and other contract claims, which generally are not insured. If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property. If this happens, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property.

Inflation may adversely affect our financial condition and results of operations

        Should inflation increase in the future, we may experience any or all of the following:

•

Decreasing tenant sales as a result of decreased consumer spending which could result in lower Overage Rent



•

Difficulty in replacing or renewing expiring leases with new leases at higher base and/or Overage Rent



•

An inability to receive reimbursement from our tenants for their share of certain operating expenses, including common area maintenance, real estate taxes and insurance

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        Inflation also poses a potential threat to us due to the probability of future increases in interest rates. Such increases would adversely impact us due to our outstanding variable-rate debt as well as result in higher interest rates on new fixed-rate debt.

We have certain ownership interests outside the United States which may increase in relative significance over time

        We hold interests in joint venture properties in Brazil, Turkey and Costa Rica. International development and ownership activities carry additional risks that are different from those we face with our domestic properties and operations. These additional risks include:

•

Difficulties in managing international operations



•

Changes in foreign political environments, regionally, nationally, and locally



•

Challenges of complying with a wide variety of foreign laws including corporate governance, operations, taxes and litigation



•

Differing lending practices



•

Differences in cultures



•

Adverse effects of changes in exchange rates for foreign currencies



•

Changes in applicable laws and regulations in the United States that affect foreign operations



•

Obstacles to the repatriation of earnings and cash

        Although our international activities currently are a relatively small portion of our business (international properties represented less than approximately one percent of the NOI of all of our properties in 2009), to the extent that we expand our international activities, these additional risks could increase in significance and adversely affect our results of operations and financial condition.

ORGANIZATIONAL RISKS

Payments by our direct and indirect subsidiaries of dividends and distributions to us may be adversely affected by prior payments to these subsidiaries' creditors and preferred security holders

        Substantially all of our assets are owned through our general partnership interest in the Operating Partnership, including The Rouse Company LP ("TRCLP"). The Operating Partnership holds substantially all of its properties and assets through subsidiaries, including subsidiary partnerships, limited liability companies and corporations that have elected to be taxed as REITs. The Operating Partnership therefore derives substantially all of its cash flow from cash distributions to it by its subsidiaries, and we, in turn, derive substantially all of our cash flow from cash distributions to us by the Operating Partnership. The creditors and preferred security holders, if any, of each of our direct and indirect subsidiaries are entitled to payment of that subsidiary's obligations to them, when due and payable, before that subsidiary may make distributions to us. Thus, the Operating Partnership's ability to make distributions to its partners, including us, depends on its subsidiaries' ability first to satisfy obligations to their creditors and preferred security holders, if any, and then to make distributions to the Operating Partnership. Similarly, our ability to pay dividends to holders of our common stock depends on the Operating Partnership's ability first to satisfy its obligations to its creditors and preferred security holders and then to make distributions to us.

        In addition, we will have the right to participate in any distribution of the assets of any of our direct or indirect subsidiaries upon the liquidation, reorganization or insolvency of the subsidiary only after the claims of the creditors, including trade creditors, and preferred security holders, if any, of the subsidiary are satisfied. Our common stockholders, in turn, will have the right to participate in any

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distribution of our assets upon the liquidation, reorganization or insolvency of us only after the claims of our creditors, including trade creditors, and preferred security holders, if any, are satisfied.

We share control of some of our properties with other investors and may have conflicts of interest with those investors

        While we generally make all operating decisions for the Unconsolidated Properties, we are required to make other decisions with the other investors who have interests in the relevant property or properties. For example, the approval of certain of the other investors is required with respect to operating budgets and refinancing, encumbering, expanding or selling any of these properties, as well as to bankruptcy decisions related to the Unconsolidated Properties and related joint ventures. We might not have the same interests as the other investors in relation to these transactions. Accordingly, we might not be able to favorably resolve any of these issues, or we might have to provide financial or other inducement to the other investors to obtain a favorable resolution.

        In addition, various restrictive provisions and rights apply to sales or transfers of interests in our jointly owned properties. These may work to our disadvantage because, among other things, we might be required to make decisions about buying or selling interests in a property or properties at a time that is disadvantageous to us.

Bankruptcy of joint venture partners could impose delays and costs on us with respect to the jointly owned retail properties

        The bankruptcy of one of the other investors in any of our jointly owned shopping centers could materially and adversely affect the relevant property or properties. Under the bankruptcy laws, we would be precluded from taking some actions affecting the estate of the other investor without prior approval of the bankruptcy court, which would, in most cases, entail prior notice to other parties and a hearing in the bankruptcy court. At a minimum, the requirement to obtain court approval may delay the actions we would or might want to take. If the relevant joint venture through which we have invested in a property has incurred recourse obligations, the discharge in bankruptcy of one of the other investors might result in our ultimate liability for a greater portion of those obligations than we would otherwise bear.

We are impacted by tax-related obligations to some of our partners

        We own properties through partnerships which have arrangements in place that protect the deferred tax situation of our existing third party limited partners. Violation of these arrangements could impose costs on us. As a result, we may be restricted with respect to decisions such as financing, encumbering, expanding or selling these properties.

        Several of our joint venture partners are tax-exempt. As such, they are taxable to the extent of their share of unrelated business taxable income generated from these properties. As the managing partner in these joint ventures, we have obligations to avoid the creation of unrelated business taxable income at these properties. As a result, we may be restricted with respect to decisions such as financing and revenue generation with respect to these properties.

We may not maintain our status as a REIT

        One of the requirements of the Code for a REIT generally is that it distribute or pay tax on 100% of its capital gains and distribute at least 90% of its ordinary taxable income to its stockholders. We may not have sufficient liquidity to meet these distribution requirements.

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        If, with respect to any taxable year, we fail to maintain our qualification as a REIT, we would not be allowed to deduct distributions to stockholders in computing our taxable income and federal income tax. The corporate level income tax, including any applicable alternative minimum tax, would apply to our taxable income at regular corporate rates. As a result, the amount available for distribution to stockholders would be reduced for the year or years involved, and we would no longer be required to make distributions. In addition, unless we were entitled to relief under the relevant statutory provisions, we would be disqualified from treatment as a REIT for four subsequent taxable years.

An ownership limit and certain anti-takeover defenses and applicable law may hinder any attempt to acquire us

        The ownership limit.    Generally, for us to maintain our qualification as a REIT under the Code, not more than 50% in value of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of our taxable year. The Code defines "individuals" for purposes of the requirement described in the preceding sentence to include some types of entities. In general, under our current certificate of incorporation, no person other than Martin Bucksbaum (deceased), Matthew Bucksbaum, their families and related trusts and entities, including M.B. Capital Partners III, may own more than 7.5% of the value of our outstanding capital stock. However, our certificate of incorporation also permits our company to exempt a person from the 7.5% ownership limit upon the satisfaction of certain conditions which are described in our certificate of incorporation.

        Selected provisions of our charter documents.    Our board of directors is divided into three classes of directors. Directors of each class are chosen for three-year staggered terms. Staggered terms of directors may reduce the possibility of a tender offer or an attempt to change control of our company, even though a tender offer or change in control might be in the best interest of our stockholders. Our charter authorizes the board of directors:

•

To cause us to issue additional authorized but unissued shares of common stock or preferred stock



•

To classify or reclassify, in one or more series, any unissued preferred stock



•

To set the preferences, rights and other terms of any classified or reclassified stock that we issue

        Stockholder rights plan.    We have a stockholder rights plan which will impact a potential acquirer unless the acquirer negotiates with our board of directors and the board of directors approves the transaction.

        Selected provisions of Delaware law.    We are a Delaware corporation, and Section 203 of the Delaware General Corporation Law applies to us. In general, Section 203 prevents an "interested stockholder," as defined in the next sentence, from engaging in a "business combination," as defined in the statute, with us for three years following the date that person becomes an interested stockholder unless one or more of the following occurs:

•

Before that person became an interested stockholder, our board of directors approved the transaction in which the interested stockholder became an interested stockholder or approved the business combination



•

Upon completion of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) stock held by directors who are also officers of the Company and by employee

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stock plans that do not provide employees with the right to determine confidentially whether shares held under the plan will be tendered in a tender or exchange offer

•

Following the transaction in which that person became an interested stockholder, the business combination is approved by our board of directors and authorized at a meeting of stockholders by the affirmative vote of the holders of at least two-thirds of our outstanding voting stock not owned by the interested stockholder

        The statute defines "interested stockholder" to mean generally any person that is the owner of 15% or more of our outstanding voting stock or is an affiliate or associate of us and was the owner of 15% or more of our outstanding voting stock at any time within the three-year period immediately before the date of determination.

        Each item discussed above may delay, deter or prevent a change in control of our Company, even if a proposed transaction is at a premium over the then current market price for our common stock. Further, these provisions may apply in instances where some stockholders consider a transaction beneficial to them. As a result, our stock price may be negatively affected by these provisions.

FORWARD-LOOKING INFORMATION

        We may make forward-looking statements in this Annual Report and in other reports which we file with the SEC or with the Bankruptcy Court. In addition, our senior management might make forward-looking statements orally to analysts, investors, the media and others.

        Forward-looking statements include:

•

Descriptions of plans or objectives of our management for plans of reorganization, debt repayment or restructuring, modification, extension; strategic alternatives, including capital raises and asset sales; and future operations



•

Projections of our revenues, income, earnings per share, Funds From Operations ("FFO" as defined below), capital expenditures, income tax and other contingent liabilities, dividends, leverage, capital structure or other financial items



•

Forecasts of our future economic performance



•

Descriptions of assumptions underlying or relating to any of the foregoing

        In this Annual Report, for example, we make forward-looking statements discussing our expectations about:

•

The resolution of our remaining Chapter 11 cases, including the TopCo Debtors, the proposed and already confirmed plans of reorganization of our Debtors and liquidity



•

Capital required for the TopCo Debtors emergence from bankruptcy



•

Sales of properties



•

Expected sales of our Master Planned Communities segment



•

Future development, management and leasing fees



•

Distributions pursuant to the Contingent Stock Agreement



•

Future cash needed to meet federal income tax requirements



•

Future development spending

        Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements often include words such as "anticipate,"

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"believe," "estimate," "expect," "intend," "plan," "project," "target," "can," "could," "may," "should," "will," "would" or similar expressions. Forward-looking statements should not be unduly relied upon. They give our expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made and we might not update them to reflect changes that occur after the date they are made.

        There are several factors, many beyond our control, which could cause results to differ significantly from our expectations. Factors such as our bankruptcy proceedings, credit, market, operational, liquidity, interest rate and other risks are described elsewhere in this Annual Report. Any factor described in this Annual Report could by itself, or together with one or more other factors, adversely affect our business, results of operations or financial condition. There are also other factors that we have not described in this Annual Report that could cause results to differ from our expectations.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

        None.

ITEM 2.    PROPERTIES

        Our investment in real estate as of December 31, 2009 consisted of our interests in the properties in our Retail and Other and Master Planned Communities segments. We generally own the land underlying the properties in our Retail and Other segment. However, at certain of the Retail and Other segment properties, all or part of the underlying land is owned by a third party that leases the land to us pursuant to a long-term ground lease. The leases generally contain various purchase options and typically provide us with a right of first refusal in the event of a proposed sale of the property by the landlord. We own the land in the Master Planned Community Segment. Information regarding encumbrances on the Retail and Other segment properties and Master Planned Communities properties is included in Schedule III of this Annual Report.

        The following tables set forth certain information regarding the Consolidated Properties and the Unconsolidated Properties in our Retail Portfolio as of December 31, 2009. These tables do not reflect subsequent activity in 2010. Anchors include all department stores or other large retail stores with GLA (measured in square feet) greater than 30,000 square feet. Significant tenants includes certain large retail stores that are approximately 10,000 square feet. Combined occupancy for Consolidated Properties and Unconsolidated Properties as of December 31, 2009 was 91.6%.

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CONSOLIDATED RETAIL PROPERTIES

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UNCONSOLIDATED RETAIL PROPERTIES

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Anchors

        Anchors have traditionally been a major component of a regional shopping center. Anchors are frequently department stores whose merchandise appeals to a broad range of shoppers. Anchors generally either own their stores, the land under them and adjacent parking areas, or enter into long-term leases at rates that are generally lower than the rents charged to Mall Store tenants. We also typically enter into long-term reciprocal agreements with Anchors that provide for, among other things, mall and Anchor operating covenants and Anchor expense participation. The centers in the Retail Portfolio receive a smaller percentage of their operating income from Anchors than from stores (other than Anchors) that are typically specialty retailers who lease space in the structure including, or attached to, the primary complex of buildings that comprise a shopping center. While the market share of many traditional department store Anchors has been declining, strong Anchors continue to play an important role in maintaining customer traffic and making the centers in the Retail Portfolio desirable locations for Mall Store tenants.

        The following table indicates the parent company of certain Anchors and sets forth the number of stores and square feet owned or leased by each Anchor in the Retail Portfolio (excluding properties owned by our Brazil and Turkey Unconsolidated Real Estate Affiliates) as of December 31, 2009.

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