Mall owner Washington Prime prepares to file for bankruptcy

Louis Conforti, CEO of Washington Prime Group, on CNBC’s Mad Money.

Source: CNBC

A US mall owner Washington Prime Group is preparing to file for Chapter 11 bankruptcy protection, and time is running out before the company defaults after missing interest on its debt, Bloomberg reported Thursday.

Last month, Washington Prime defaulted on an interest payment of $ 23 million and said it would enter a 30-day grace period to continue negotiations with lenders.

But those conversations have been shaky ever since, Bloomberg reported, citing conversations with people familiar with the matter. Still, the plan to seek bankruptcy could change, Bloomberg said, if Washington Prime can move forward with its lenders or if its grace period is extended.

A company spokesperson declined to comment on the report.

The Columbus, Ohio-based real estate investment trust was formed in May 2014 following a spin-off from the largest U.S. mall owner, Simon Property Group. It continued to grow its shopping center portfolio when it acquired Glimcher Realty Trust in January 2015.

Washington Prime currently operates about 100 malls nationwide, several of which are considered B and C rated, meaning they generate less sales per square foot than an A-rated asset. Those properties have been under even lower. pressure during the Covid pandemic, with fewer people venturing out of the house to shop. When they do, they are likely to opt for open-air malls over closed malls.

And with several retail, restaurant, and entertainment tenants requesting rent relief or closing more locations, mall owners have struggled to meet their own obligations. That stress has already pushed some to the brink and bankruptcy.

Last November, two other mall owners, CBL and Pennsylvania Real Estate Investment Trust, filed for Chapter 11 bankruptcy protection. The latter has since emerged.

Shares of Washington Prime fell more than 45% at noon on Thursday. The stock is down more than 80% from the previous year. Washington Prime has a market capitalization of around $ 71 million.


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