CoolSprings Galleria Mall, Franklin, TN
Source: CBL Properties
The CBL filing followed shortly thereafter Pennsylvania Real Estate Investment Trust, the largest mall owner in Philadelphia, filed a Chapter 11 petition Sunday to run a pre-fab financial restructuring plan. The company plans to borrow $ 150 million in new loans to recapitalize the business and extend the life of its debt.
CBL previously announced in August that it had entered into a restructuring support agreement with a group of its bondholders in an attempt to strengthen its balance sheet.
The Tennessee-based mall owner struggled during the pandemic with tenants not paying rent or deferring payments. Some of them, like the J.C. Penney, also filed for bankruptcy protection earlier this year.
CBL operates 107 properties, totaling 66.7 million square feet, in 26 states, including a handful of outlet centers.
In its bankruptcy filing, CBL listed its estimated assets and liabilities ranging from $ 1 billion to $ 10 billion.
“After months of discussion and deliberation on a number of alternatives, the management and board of directors of CBL firmly believe that implementing the major restructuring … CBL offers the best plan to become a stronger and more stable company”, CBL CEO Stephen Lebovitz said in a statement.
CBL operates a number of lower-ranking shopping centers, called B- and C-rated shopping centers, compared to the largest US mall operator. Simon Property GroupThis is the owner of many A-rated properties that bring in more revenue per square foot.
Simon’s strategy during the pandemic has focused on buying retailers out of bankruptcy, in part to keep those retailers’ stores open in Simon shopping malls. With the help of the clothing licensing company Authentic Brands Group, the denim manufacturer Lucky Brand and the men’s suit manufacturer Brooks Brothers were taken out of bankruptcy. At the end of the month, the terms of the Penney acquisition were set with the help of the mall owner Brookfield.
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