Louis Conforti, CEO of Washington Prime Group, on Mad Money on CNBC.
Source: CNBC
The Washington Prime Group, which owns a shopping center in the United States, is preparing to potentially file for Chapter 11 bankruptcy, with time running out before the company defaults after skipping interest on its debt. debt, Bloomberg reported on Thursday.
Last month, Washington Prime missed an interest payment of $ 23 million and said it would enter a 30-day grace period to continue negotiations with creditors.
But those talks have faltered ever since, Bloomberg said, citing conversations with people familiar with the matter. Still, the plan to file for bankruptcy may change, Bloomberg said, if Washington Prime succeeds in making progress with its creditors 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 after a spin-off of the largest US mall owner, Simon Property Group. It continued to increase its mall portfolio when it acquired Glimcher Realty Trust in January 2015.
Washington Prime currently operates about 100 malls across the country, some of which are rated B and C, meaning they generate less sales per square meter than a rated A asset. These properties are under even greater pressure during the Covid pandemic, with fewer people venturing out to shop. When they do, they are probably opting for open-air malls instead of closed malls.
And with several retail, restaurant and entertainment tenants requesting rent relief or closing more locations, mall owners have struggled to fulfill their own obligations. This stress has already led some to the abyss and bankruptcy.
Last November, two other mall owners, CBL and Pennsylvania Real Estate Investment Trust, filed for Chapter 11 bankruptcy. The latter has since emerged.
Washington Prime’s shares plunged more than 45% at noon on Thursday. The stock fell more than 80% over the previous year. Washington Prime has a market capitalization of around $ 71 million.