Friday is Judgement day for GGP and Bill Ackman...

I was kinda shocked when I read that Bill Ackman (a smart guy who's been on the right side of this financial debacle) took a position (albeit a tiny one) in GGP. In case you're unaware, GGP is a really crappy REIT, which also happens to be the 2nd largest mall owner in the country (not an auspicious sign for the country as a whole)

After the close yesterday, Bill Ackman's Pershing Square Capital hedge fund disclosed a 7.5% stake (20,080,690 shares) in embattled REIT General Growth Properties Inc. (NYSE: GGP).

Pershing Square purchased the subject shares and the swaps, for a total consideration of $9,261,789. Trading data reveled with the filing, showed the firm was buying common stock in the $0.35-$0.51 range in November. Shares of GGP closed at $1.00 yesterday, with a 52-week low recently set at $0.24.

Now the reason why I am shocked Ackman took any position in GGP was because of how crappy the company's prospects are. In fact Friday will determine whether GGP will get taken off life-support by its creditors:

General Growth, the No. 2 mall owner in the United States, has been in talks with lenders to extend $900 million in secured mortgages on two Las Vegas shopping centers, Fashion Show mall and Shoppes at the Palazzo. It also has another $58 million due Dec. 1 on a corporate debt for Rouse, a mall company General Growth bought in 2004.

In total, the company faces $1.035 billion in debt coming due before the end of the year. Failure to refinance or extend the $900 million by Friday would trigger an event of default under the company's senior credit facility and secured portfolio facility, General Growth said in the SEC filing.

Wait. It gets better for GGP....

Next year, the Chicago-based real estate investment trust, which has over 200 malls in 45 states, faces another $3.07 billion in debt maturing. All told, General Growth is staring at $21.9 billion of debt maturing by the end of 2012.

Of course if GGP goes down tomorrow the commercial real estate market will be scared sh*tless...maybe I should pick up some SRS...hmmmmm

Anything that happens with General Growth may send jitters through the $800 billion CMBS market, said Alan Todd, head of JP Morgan CMBS research.

If GGP gets a stay of execution and rallies hard then I will totally pick up some SRS because there is no way this company will make good on $21 billion of debt obligations by 2012.

P.S. DOES ANYONE FIND IT IRONIC THAT THE 2ND LARGEST MALL OWNER IN THE U.S. MIGHT DECLARE BANKRUPTCY ON BLACK FRIDAY (THE LARGEST SHOPPING DAY OF THE YEAR)????