PREIT, co-owner of Lehigh Valley Mall, emerges from bankruptcy
Well, that didn’t take long. About 40 days after it filed for Chapter 11 bankruptcy protection, Lehigh Valley Mall co-owner PREIThas completed its financial restructuring and emerged from bankruptcy. PREIT, the largest mall owner in Philadelphia, filed for Chapter 11 on Nov. 1 with a prepackaged plan to bolster its financial flexibility and restructure its debt, after the coronavirus pandemic wreaked havoc on the brick-andmortar retail world.
Following the expedited process, PREIT said Friday it now has access to up to $130 million of newcapital to support its operations. The company’s debt maturity schedule also has been extended.
“Having quickly andefficiently completed our financial restructuring, PREIT is now a more resilient company with additional resources and financial flexibility to continue delivering terrific experiences for consumers and outstanding service for our retail partners,” PREITCEO Joseph Coradino said. “PREIT has a history of being a firstmover in adapting to newtrends in retail and will continue to stay ahead of the emerging concepts and uses across our portfolio.”
During the restructuring, PREIT continued normal operations and said it met all obligations to tenants and suppliers. The company’s stock will continue to trade on the New York Stock Exchange.
PREIT, which owns interests in 26 retail properties in nine states, on Nov. 6 reported a third-quarter net loss of $35.7 million. Same store net operating income fell 33% during a quarter in which PREIT said it saw a revenue decrease due to “bankruptcies and related store closings, an increase in credit losses for challenged tenants, the accounting for rental abatements as well as decreased percentage sales revenue resulting from mall closures related to the COVID-19 pandemic.”
Over the years, PREITsold off its underperforming malls in an effort to boost its portfolio amid a changing retail climate. In the Lehigh Valley, PREIT unloaded Phillipsburg Mall in Warren County, as well as South Mall in Salisbury Township and Palmer Park Mall in Palmer Township, among other properties.
Its lone remaining Lehigh Valley holding is its 50% interest in Lehigh Valley Mall in Whitehall Township. Simon, the nation’s largest mall owner with
more than 200 retail properties in the United States, is Lehigh Valley Mall’s other co-owner.
Lehigh Valley Mall has, historically, been one of PREIT’s best-performing shopping centers.
For the nine months ended Sept. 30, Lehigh Valley Associates LP— the formal nameof the mall partnership between Simon and PREIT — reported revenue of $21.2 million, downfrom$24.6 million during the same stretch in 2019, according to a Securities and Exchange Commission filing.
Net income, meanwhile, was $6.4 million, down from $9.8 million during the first nine months last year.