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Mall owners face uncertain future

(Credit: Simon Property Group)

Two publicly listed mall owners, CBL Properties and Pennsylvania REIT, said they were filing for chapter 11 after their earlier debt-restructuring efforts failed, WSJ reported. Analysts say that even when the pandemic comes under control, the glut of department stores and other retail tenants struggling with lower sales will continue to haunt the mall industry.

  • Why it matters: Many malls purchased within the past 10 years are now underwater, leading owners to return properties to their lenders at a record pace. But some lenders don’t want struggling properties on their balance sheet and have batted them back by extending their loans.
  • Mall closings are also picking up: Phoenix’s Metrocenter Mall; Cascade Mall in Burlington; and the Northgate Mall in Durham, N.C. closed in recent months.
  • Heard on the Street: RockStep Capital’s Andy Weiner: “The quantity of distressed debt and distressed opportunity is at a historical high.” [WSJ]

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