Two large owners of shopping malls declare bankruptcy

Two major U.S. shopping center owners CBL and Pennsylvania Real Estate Investment Trust (PREIT), filed a bankruptcy petition.

Shopping centers have been put under pressure by the Coronavirus Pandemic: their tenants do not pay rent, and dozens of retailers and restaurants themselves are already filing for bankruptcy, such as the chain of department stores JC Penney. 

Tennessee-based CBL operates 107 properties, including shopping malls, with a total area of 6.2 million square meters in 26 states. Most of its malls are B- and C-rated, which means they have smaller sales per area than those rated A.

PREIT manages 2.1 million square meters of retail space, including 19 shopping malls, including the largest Fashion District Philadelphia. In recent years, the company has been actively restructuring its malls, making them more profitable, and reducing traditional retailing dependence. But this process was interrupted by the Coronavirus pandemic.

Both companies have already presented their business restructuring plans. But they still have many challenges ahead of them against the background of a sharp decline in consumer interest in visiting malls. Thus, according to the survey conducted by Coresight Research, today, shopping centers have become the most avoidable places for public use. The reluctance to visit them was announced by 55,4% of respondents.