Post-Bankruptcy Restructuring Aims To Save Two Montco Malls

MONTGOMERY COUNTY, PA — The Pennsylvania Real Estate Investment Trust, owner of two Montgomery County malls, has been approved for a financial restructure after filing for bankruptcy in November.

The REIT filed voluntary Chapter 11 bankruptcy on Nov. 1 and was approved for a plan that allows it to borrow an additional $130 million in loans that will allow the trust to keep its malls afloat.

In Montgomery County, Philadelphia-based PREIT owns Plymouth Meeting Mall and Willow Grove Park.

Some experts say Plymouth Meeting Mall, along with PREIT's Exton Square mall, have struggled in recent years because of their proximity to the much larger mall in King of Prussia. The former — marked by the giant Lego giraffe that invites visitors to Legoland — has also struggled to keep retail occupancy.

Brick and mortar shopping had been on the downturn long before the pandemic hit. But coronavirus severely exacerbated those existing trends, and shoppers remained apprehensive even with PREIT's malls in Montgomery County reopening in June after the pandemic lockdown.

Executives are optimistic that the declaration will allow them to restructure their finances in a way that helps the company survive.

But for now, holiday shopping will go on at PREIT malls, albeit at a distance.

"Today's announcement has no impact on our operations – our employees, tenants, vendors and the communities we serve –and we remain committed to continuing to deliver top-tier experiences and improving our portfolio," PREIT CEO Joseph Coradino said in a statement.
"We are grateful for the significant support we have received from a substantial majority of our lenders, which we expect will enable us to complete our financial restructuring on an expedited basis," Coradino added.

The company entered into a Restructuring Support Agreement with its bank lenders, who have committed to provide $150 million to recapitalize the business and extend the company's debt maturity schedule, keeping PREIT in business, according to RTT news on NASDAQ.

The prepackaged plan was approved by 95 percent of voting lenders, the company said.

In the second quarter PREIT reported that revenue decreased $20.1 million, resulting in part from bankruptcies and store closings, and an increase in credit losses for struggling tenants. The company said it had secured $150 million in borrowing to recapitalize its business and extend the company's debt schedule, according to a recent press release.

"We were able to reach this outcome on an expedited basis thanks to the overwhelming support of our lenders, as well as the continued support of our employees, customers, tenants and vendors. We will remain focused on operating safely, responsibly and efficiently while maintaining a strong balance sheet," Coradino said.

Patch editor Marlene Lang contributed to this report