Louis Conforti, CEO of Washington Prime Group, CNBC’s Mad Money.
Source: CNBC
The owner of the American mall Washington Prime Group is preparing to request the protection of the bankruptcy of chapter 11, with the short time before the company no longer pays an interest payment for its debt, Bloomberg reported on Thursday.
Last month, Washington Prime failed to pay $ 23 million in interest and said it would enter a 30-day grace period to continue negotiations with creditors.
But those talks have faltered since then, Bloomberg reported, citing conversations with people familiar with the issue. However, the bankruptcy plan could change, Bloomberg said, if Washington Prime is able to make progress with its creditors or if the grace period is extended.
A company spokesman declined to comment on the report.
The real estate investment trust, based in Columbus, Ohio, was formed in May 2014 following a spinoff of the largest mall owner in the US, Simon Property Group. It continued to grow its shopping portfolio when it acquired Glimcher Realty Trust in January 2015.
Washington Prime currently operates about 100 malls nationwide, some of which are considered B and C, which means they bring in less sales per square foot than an A-rated asset. These properties have been subjected to even more. a lot of pressure during the Covid pandemic, with fewer people leaving the house to shop. When they do, they probably opt for outdoor malls over closed malls.
And with a number of retail tenants, restaurants and entertainment calling for rent exemption or the closure of several locations, mall owners have struggled to meet their own obligations. This stress has already pushed some over the edge and into bankruptcy.
In November last year, two other mall owners, CBL and the Pennsylvania Real Estate Investment Trust, filed for bankruptcy protection in Chapter 11. The latter has appeared since.
Shares of Washington Prime fell more than 45 percent Thursday at noon. The stock decreased by more than 80% compared to a year ago. Washington Prime has a market cap of about $ 71 million.