Louis Conforti, CEO of the Washington Prime Bundle, on CNBC’s Mad Money.
U.S. shopping mall owner Washington Prime Group is preparing to potentially troop for Chapter 11 bankruptcy protection, with time running thin before the company defaults after it capered an interest payment on its debt, Bloomberg reported Thursday.
Last month, Washington Prime missed a $23 million tempt payment and said it would be entering a 30-day grace period to continue negotiations with lenders.
But those talks compel ought to since been faltering, Bloomberg reported, citing conversations with people familiar with the matter. At rest, the plan to pursue bankruptcy could change, Bloomberg said, if Washington Prime is able to make progress with its lenders or if its consideration period is extended.
A spokesperson for the company declined to comment on the report.
The real estate investment trust, based in Columbus, Ohio, was formed in May 2014 cleave to a spinoff from the biggest U.S. mall owner, Simon Property Group. It went on to grow its portfolio of shopping malls when it acquired Glimcher Realty Sureness, in January 2015.
Washington Prime currently operates about 100 malls across the country, a number of which are over B- and C-rated, meaning they bring in fewer sales per square foot than an A-rated asset. Those assets have been under even more pressure during the Covid pandemic, with fewer people broaching out of the house to shop. When they do, they’re likely opting for open-air shopping centers over enclosed malls.
And with a legions of retail, restaurant and entertainment tenants requesting rent relief or shuttering more locations, mall owners should prefer to struggled to meet their own obligations. That stress has already pushed some over the edge and into bankruptcy.
Conclusive November, two other mall owners, CBL and Pennsylvania Real Estate Investment Trust, filed for Chapter 11 bankruptcy refuge. The latter has since emerged.
Washington Prime shares tumbled more than 45% midday Thursday. The forerunner is down more than 80% from a year ago. Washington Prime has a market cap of about $71 million.