Louis Conforti, CEO of Washington Prime Group, on CNBC’s Mad Money.
Source: CNBC
The US mall owner Washington Prime Group is preparing to potentially file for Chapter 11 bankruptcy protection, with time running out for the company to default after skipping an interest payment on its debt, Bloomberg reported Thursday.
Last month, Washington Prime missed a $ 23 million interest payment and said it would enter a 30-day grace period to continue negotiations with lenders.
But those talks have since failed, Bloomberg reported, citing conversations with people familiar with the matter. Still, the plan to pursue bankruptcy could change, Bloomberg said, if Washington Prime can make headway with its lenders or if the grace period is extended.
A company spokesperson declined to comment on the report.
The real estate investment trust, based in Columbus, Ohio, was founded in May 2014 following a spin-off from the largest US shopping center owner Simon Property Group. It further expanded its shopping center portfolio when it acquired Glimcher Realty Trust in January 2015.
Washington Prime currently operates about 100 malls across the country, some of which are considered B and C rated, meaning they generate fewer sales per square foot than A-rated assets. Those properties came under even more pressure during the Covid pandemic, with fewer people venturing out of the house to shop. If they do, they probably opt for open-air malls over closed malls.
And with some retail, restaurant and entertainment tenants requesting rent cuts or closing more locations, shopping center owners are struggling to meet their own commitments. That stress has already pushed some over the edge and declared bankruptcy.
Last November, two other shopping center owners, CBL and Pennsylvania Real Estate Investment Trust, filed for bankruptcy protection. The latter has since emerged.
Shares of Washington Prime plummeted more than 45% Thursday afternoon. The stock is down more than 80% from a year ago. Washington Prime has a market cap of approximately $ 71 million.