Shopping center owners CBL & Associates and r Pennsylvania Real Estate Investment Trust have filed for Chapter 11 bankruptcy protection, highlighting pressures on the retail real estate industry is faced because of the coronavirus pandemic
The two companies filed on Sunday The latter, the largest mall owner in Philadelphia, filed his petition to execute a prepackaged financial restructuring plan He announced plans to release $ 150 million in new loans, in the goal of recapitalizing the company and extending the maturities of its debt
Tennessee-based CBL said in August it had struck a restructuring support deal with a group of bondholders in an attempt to strengthen its balance sheet
The mall owner struggled during the pandemic as his tenants did not pay rent or postpone payments Some of them, like department store chain JC Penney, also filed for bankruptcy protection this year
In its bankruptcy filing, CBL listed its estimated assets and liabilities between $ 1 billion and $ 10 billion
« After months of discussing and examining a number of alternatives, CBL management and the board are confident that the implementation of the full restructuring will provide CBL with the best plan to become a stronger and more stable company, ”said Stephen Lebovitz, CEO of CBL, in a statement
CBL operates a number of so-called B and C malls, compared to the largest US mall operator, Simon Property Group, which owns many A-rated properties that generate more sales per square foot
Simon’s strategy during the pandemic was to buy from retailers in bankruptcy, in part to keep those retailers’ stores in Simon malls open.She bought out denim maker Lucky Brand and costume maker Brooks Brothers Men’s Shop from bankruptcy, with help from clothing licensing firm Authentic Brands Group And at the end of the month, he finalized the terms of his acquisition of Penney, with the help of the owner of the Brookfield mall
PREIT operates 225 million square feet of retail space, including 19 malls, according to its website Last year it opened the Fashion District of Philadelphia, a huge shopping mecca it has built from scratch in downtown Philadelphia He had spent the past few years getting rid of underperforming malls and investing in adding movie theaters, game rooms and grocery stores to his malls, reducing his reliance on retail. traditional But this strategy has come under pressure this year, with consumers largely staying at home due to the pandemic
Shopping center owners will face another test this holiday season, which is typically their tenants’ busiest time of year, but it will be very different during the pandemic, as Covid-19 cases increase quickly in the US
Shopping malls and malls are the public places most avoided by consumers, according to a survey of 419 people by Coresight Research On the week of October 27, 554% of respondents said they avoid shopping centers
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World News – United States – American Malls under pressure: CBL, Pennsylvania REIT, file for bankruptcy
