Louis Conforti, CEO of Washington Prime Group, on CNBC’s Mad Money.
Source: CNBC
The owner of the US shopping malls Washington Prime Group is preparing to file a Chapter 11 bankruptcy protection application.
Last month, Washington Prime lost a $ 23 million interest payment and said it would enter a 30-day grace period to continue negotiations with lenders.
But those conversations have been hesitant, Bloomberg reported, citing conversations with people familiar with the subject. Still, the plan to pursue bankruptcy could change, Bloomberg said, if Washington Prime is able to move forward with its lenders or if its grace period is extended.
A company spokesman declined to comment on the report.
The Columbus, Ohio-based real estate investment fund was formed in May 2014 as a result of a derivation by the largest owner of U.S. shopping malls, Simon Property Group. It grew its mall portfolio when it acquired Glimcher Realty Trust in January 2015.
Washington Prime currently operates about 100 malls nationwide, some of which are considered Class B and C, meaning they provide less sales per square foot than a Class A asset. These properties have come under pressure. even bigger during the Covid pandemic, with fewer people venturing out of the house to shop. When they do, they will probably opt for outdoor malls in closed malls.
And with a number of retail, restaurant and entertainment tenants soliciting rent relief or protecting more places, mall owners have struggled to meet their own obligations. This stress has already pushed them to the border and bankruptcy.
Last November, two other mall owners, CBL and the Pennsylvania Real Estate Investment Trust, applied for Chapter 11 bank protection. The latter has since emerged.
Shares of Washington Prime fell more than 45% Thursday at noon. Shares have fallen more than 80% from a year ago. Washington Prime has a market cap of about $ 71 million.