Washington Prime Group, which owns more than 100 U.S. shopping centers and enclosed malls, has filed for bankruptcy protection, citing financial woes tied to the CCP virus pandemic.
“The COVID-19 pandemic has created significant challenges for many companies, including Washington Prime Group, making a Chapter 11 filing necessary to reduce the Company’s outstanding indebtedness,” the Columbus, Ohio-based company said in a statement. “Throughout the restructuring process, the Company remains committed to serving as a preeminent operator of retail town centers and will continue to serve its guests.”
The real estate investment trust filed paperwork in federal court on June 13, court documents (pdf) show. In announcing its filing, the company said it secured $100 million in debtor-in-possession financing that will allow the company to remain in business while it restructures its debt and seeks a route to fully repay creditors.
Washington Prime Group (WPG), which was formed in May 2014 following a spinoff from Simon Property Group, owns interests in 104 malls containing 56 million square feet of leasable retail space as of Dec. 31, 2019.
“The Company’s financial restructuring will enable WPG to right-size its balance sheet and position the company for success going forward,” Washington Prime Group CEO Lou Conforti said in a statement.
“During the financial restructuring, we will continue to work toward maximizing the value of our assets and our operating infrastructure. The Company expects operations to continue in the ordinary course for the benefit of our guests, tenants, vendors, stakeholders, and colleagues.”
WPG shares tumbled 30 percent on June 14. The company’s share price has trended down over the course of more than four years from a per-share peak of $124.65 in August 2016. WPG reported losing more than $219 million amid the pandemic-related shutdowns in 2020, according to filings.
Last year, two other mall owners, CBL Properties and Pennsylvania Real Estate Investment Trust, filed for bankruptcy, according to CNN. Both cited the CCP (Chinese Communist Party) virus, commonly known as the novel coronavirus, as well as shifting consumer habits, as reasons for their financial woes. The two firms owned roughly 130 malls.
Retail analysts with UBS had estimated that nearly 80,000 stores nationwide would shut down by 2025 as a result of the pandemic and shifting consumer habits.