Lincolnwood Mall Owner Defaults On Debt, Considers Bankruptcy

LINCOLNWOOD, IL — There are "substantial doubts" that the owner of Lincolnwood Town Center can stay in business, company officials said.

Representatives of Washington Prime Group, a Columbus-based real estate investment trust, announced the firm had lost $111.4 million in the final quarter of last year and, since then, has skipped mortgage and interest payments on its debt.

A $47.3 million mortgage loan secured by the Lincolnwood mall will come due April 1, according to the firm's annual report.

A year earlier, in light of the effect of the emerging coronavirus pandemic on shopping centers, Washington Prime's lenders had negotiated a forbearance agreement that allowed the firm to defer payments until October 2020.

But the publicly traded trust did not make its mortgage payment in January, it told investors, and company officials last month elected not to pay about $23.2 million in semi-annual interest payments.

Washington Prime representatives said they have been in discussions to restructure its outstanding debt, which might involve declaring Chapter 11 bankruptcy, according to the firm's 2020 annual report.

"The Company is continuing to engage in negotiations and discussions to restructure its capital structure," according to the report. "The uncertainty associated with the Company’s ability to meet these obligations as they become due raises substantial doubt about the Company’s ability to continue as a going concern as defined by generally accepted accounting principles."

Lincolnwood Town Center opened at the southwest corner of Touhy Avenue and McCormick Boulevard in 1990. Nearly 23 percent of its 423,000 square feet of commercial space was vacant as of the end of 2020, according to the company's annual report.

Company representatives declined to comment to Crain's Chicago Business, which first reported the firm had defaulted and was considering bankruptcy.

Revenue from Lincolnwood Town Center had been on the decline for years prior to the pandemic, Crain's reported, citing data from Bloomberg. Gross revenue fell by 29 percent from 2016 to 2019, while profit fell by 40 percent during the same period.