LR mall’s owner files for bankruptcy
CBL Properties Inc., the owner of Park Plaza mall in Little Rock, has filed for Chapter 11 bankruptcy protection to restructure its debt and eliminate $1.5 billion from its balance sheet.
Park Plaza and the other properties in the Chattanooga, Tenn.-based mall owner’s portfolio won’t be affected, CBL said Monday.
“It’s business as usual at CBL’s properties,” Chief Executive Officer Stephen D. Lebovitz said in a statement. “All CBL’s properties have reopened in accordance with the latest guidance from state and local governmental orders and will continue to operate as normal. Visitors to our properties will not notice any change in our operations.”
CBL and other mall owners have been struggling to compete against Amazon. com and other online retail competitors even before the coronavirus pandemic flared in March and left them with almost no foot traffic for malls such as Park Plaza that remained open.
But CBL was particularly vulnerable even before the pandemic, according to retail analysts, given the company’s focus on regional malls in less affluent areas.
A Morningstar report noted that the company announced almost a year ago that it had suspended future dividends on its common and preferred stock as it expected lower net operating income in 2020 because of an increase in retailer bankruptcies and store closings in 2019.
The report noted sales in
2018 of $319 per square foot, compared with $419 per square foot in 2011.
CBL acquired Park Plaza, a fixture in the city’s midtown area, in 2004 for $77.5 million.
Them all has about 547,000 square feet, including two Dillard’s locations that were not part of the sale. Dillard’s owns its stores at the site. The Park Plaza site was developed in 1959 and eventually was overhauled and became an enclosed regional mall in 1988, according to CBL.
The bankruptcy filing was expected. CBL announced in August that it had entered into a restructuring agreement with a group of lenders, a move the company said was designed to strengthen its balance sheet and, as one of the country’s largest mall owners, keep open the 107 malls, plazas and shopping centers it owns and operates in 26 states.
The filing in Houston, in the Southern District Court of Texas, will give the company a chance to keep operating while reorganizing its finances and business. It listed estimated assets at about $1 billion to $10 billion, and estimated liabilities at around the same amount.
“Our Chapter 11 filing is expected to facilitate our financial restructuring so that we can continue to serve our community for years to come,” Lebovitz said.
Given the support the plan received from CBL’s bondholders before the bankruptcy filing, the company said it expected the bankruptcy process to be “more efficient and expedited.”