1 Struggling Mall REIT May Have Just Saved Itself From Bankruptcy

Mall owners were already feeling pressure from changing consumer shopping habits before the COVID-19 pandemic. The pandemic magnified their problems, forcing many malls to close for months, decimating traffic to reopened properties, and driving numerous retailers to permanently close weaker stores or even declare bankruptcy.

In August, CBL & Associates Properties said that it intended to file for bankruptcy to stave off collapse. By contrast, on Wednesday, Pennsylvania Real Estate Investment Trust (NYSE: PEI) announced a restructuring agreement with its lenders that should allow it to avoid bankruptcy -- buying time for management to turn the business around.

Last year, PREIT's same-store net operating income declined 2.5% due to the bankruptcies of several key tenants, including Forever 21, Charlotte Russe, Gymboree, and Payless ShoeSource. Entering 2020, management projected that same-store NOI would increase 0.5% to 1.5%, with a mid-single-digit decline in the first quarter but strong sequential improvement thereafter due to easy year-over-year comparisons and new tenant openings.

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Source Fool.com