Simon shopping for latest acquisition

INDIANAPOLIS (WISH) - The owner of the Fashion Mall, Castleton Square and Clay Terrace, to name a few, wants to expand its mall empire. Simon Property Group wants to buy General Growth Properties.

Simon is the nation's largest mall owner. The second largest is the Chicago-based General Growth. But what makes the two companies different is cash flow.

"This cash obviously will position us to take advantage of some opportunities out there as our business, retail real estate, continues to consolidate," said Simon Property Group CEO David Simon.

Simon himself told Bloomberg television back in September that his company had raised $3 billion for future growth possibly to buy its largest competitor, General Growth Properties.

"(General Growth Properties) is in Chapter 11. So it'll be interesting to see how that whole re-org will work out," added Simon.

Simon has about $6 billion in reserve to use for acquisitions. General Growth filed for bankruptcy protection in April after not being able to refinance debt it accumulated to pay for acquisitions.

General Growth Properties is a pretty sizable company. They own more than 200 malls nationwide. The company owns several tourist destination properties including historic Faneuil Hall Marketplace in Boston, South Street Seaport in New York City and Water Tower Place in Chicago. All of those properties host shops and eateries.

It is also proud of what it calls its Platinum Properties, malls that have luxury brand stores like Tiffany, Neiman Marcus, Louis Vuitton and Saks Fifth Avenue.

When you compare the two, Simon has about 387 properties in North America, Europe and Asia. General Growth has more than 200 regional malls in 44 states and also has holdings internationally, such as in Brazil and Turkey.

Some analysts say Simon is the nation's best mall operator, something that benefits consumers. Yet with retail remaining so weak, some may question whether they are making the right move.

Bankruptcy attorney Mike McCrory believes they are.

"If you've got staying power, it could be that there are opportunities for the long term. General Growth does have some marquee properties, some things that would very nicely complement the Simon portfolio," said McCrory, an attorney with Barnes & Thornburg. "So again, I won't second guess the business decision work at Simon, but it does make a lot of sense to me as a bankruptcy attorney that this would be an opportunity for them to take a look."

Simon recently bought another big competitor, The DeBartolo Group. Some analysts say since Simon can't grow by building new malls because commercial development is weak, it's choosing to grow by buying existing ones.

No word on when or how the General Growth deal might go through.