CBL Properties (CBLPRD) and PREIT (PEI) filed for Chapter 11 on Sunday and both will continue operating while they navigate the restructuring process. The companies have previously warned they were in perilous positions because some of their largest tenants, including JC Penney, Tailored Brands and Ascena Retail Group, have filed for bankruptcy this year.
CBL said in its bankruptcy filing that it has assets and estimated liabilities between $1 billion to $10 billion. The Tennessee-based company, which is the larger of the two, said in August that uncollected rents from retailers, declining customer traffic and mounting debt of about $1 billion were the factors in its decision to file for bankruptcy. It owns around 100 malls, predominately in the US southeast and midwest.
For PREIT, the Pennsylvania-based company voluntary filed for Chapter 11. The prepackaged financial plan ensures $150 million in funding to “recapitalize the business and extend the company’s debt maturity schedule,” it said in a statement. The plan has “overwhelming support” from its lenders and it’s looking to quickly emerge from the process.
This year has been brutal for both retailers and mall owners. In the spring, months-long closures of non-essential business, such as malls, prevented people from shopping and accelerated the shift to online shopping. It also didn’t help that major retailers also filed for bankruptcy during the pandemic, with the number peaking in the summer.