CoolSprings Galleria Mall, Franklin, TN
Source: CBL Properties
Mall proprietor CBL & Associates filed for Chapter 11 bankruptcy safety late Sunday, after its enterprise was pressured by the coronavirus pandemic, highlighting the stresses the retail actual property trade is going through.
CBL’s submitting got here shortly after Pennsylvania Real Estate Investment Trust, the biggest mall proprietor in Philadelphia, filed a Chapter 11 petition earlier Sunday, to execute a prepackaged monetary restructuring plan. It mentioned it plans to unlock $150 million in new borrowing, aiming to recapitalize the enterprise and prolong its debt maturities.
CBL had beforehand mentioned in August that it had entered right into a restructuring help settlement with a gaggle of its bondholders, in an try and attempt to strengthen its steadiness sheet.
The Tennessee-based mall proprietor has struggled throughout the pandemic with its tenants not paying lease or pushing funds again. Some of these, just like the division retailer chain J.C. Penney, have additionally filed for bankruptcy safety this 12 months.
CBL operates 107 properties, totaling 66.7 million sq. toes throughout 26 states, together with a handful of outlet facilities.
In its bankruptcy submitting, CBL listed its estimated property and liabilities each within the vary of $1 billion to $10 billion.
“After months of discussions and consideration of a number of alternatives, CBL’s management and the Board of Directors firmly believe that implementing the comprehensive restructuring … will provide CBL with the best plan to emerge as a stronger and more stable company,” CBL CEO Stephen Lebovitz mentioned in a press release.
CBL runs plenty of lower-tier, so-called B- and C-rated malls, in contrast with the largest U.S. mall operator, Simon Property Group, which is the proprietor of many A-rated properties, which carry in additional gross sales per sq. foot.
Simon’s technique throughout the pandemic has pivoted to purchasing retailers out of bankruptcy, partly to maintain these retailers’ shops in Simon malls open. It acquired the denim maker Lucky Brand and the lads’s swimsuit maker Brooks Brothers out of bankruptcy, with the assistance of apparel-licensing agency Authentic Brands Group. And late late month, it finalized the phrases of its acquisition of Penney, with the assistance of mall proprietor Brookfield.
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