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Washington Prime Group, which owns more than 100 retail malls across the U.S., filed for Chapter 11 bankruptcy on 13 June, a “necessary” move after the economic shutdown “created significant challenges” and left almost $1 billion in debts, the company said, as tenants closed stores and negotiated lower rents.
The property owner has secured $100 million in new funding that “will enable Washington Prime to right-size its balance sheet” and “continue maximizing the value of our assets and our operating infrastructure” and to “continue in the ordinary course without interruption,” the company said in a public statement announcing its bankruptcy.
Washington’s share value fell by 55 percent in early trading on 14 June; the stock price has given up 60 percent this year to date.
“Strong balance sheets and sound operations are needed to see property companies through this period,” retail analyst Neil Saunders at GlobalData, told CNN Business.
“Washington Prime did not have those fundamentals.”
The 2020 economic crisis accelerated the trend among consumers to make online shopping their go-to option, UBS analysts said in a recent report, predicting that 80,000 retail stores will close over the next five years, leading to more malls failing.
CBL Properties and Pennsylvania Real Estate Trust, two other major mall owners, filed for bankruptcy last year amid vanishing shoppers and tenants unable to pay rent.
TREND FORECAST: Again, this is old news to Trends Journal subscribers. The “Pall on the Malls” was forecast by Gerald Celente in his bestselling book, Trends 2000, in 1996. There will be no great revival. Trends are born, they grow, mature, reach old age, and die.
Malls are a dying breed and repurposing them into other rental uses such as warehouses, office space, churches, etc. will not generate comparable revenue.