Cherry Hill Mall Owner Braces For Economic Downturn

CHERRY HILL, NJ — The owner of the Cherry Hill Mall is taking a series of steps designed to create an extra $300 million to help soften the blow of an economic downturn related to the new coronavirus.

The Cherry Hill Mall has been closed since March 17, when Gov. Phil Murphy ordered that all indoor malls, amusement parks and indoor centers in New Jersey must close.

Philadelphia Real Estate Investment Trust (PREIT) announced a plan on Tuesday to cut spending, boost borrowing and sell assets to create $300 million in incremental liquidity.

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“As we continue to navigate an uncharted operating environment, we are focused on safeguarding the safety and well-being of our associates and communities while enhancing near-term liquidity,” PREIT Chairman Joseph F. Coradino said. “PREIT was among the first companies in our sector to embark on a proactive effort to improve our portfolio through anchor repositioning and redevelopment, completing the program ahead of industry peers and in advance of the COVID-19 pandemic. We are now laser-focused on improving our balance sheet to position PREIT for long-term success.”

It intends to create $60 million a year by cutting its quarterly cash dividend by 2 cents per share, according to a statement from the company. It will increase borrowing by more than $83 million, and cut spending by $11 million.

The company is also looking for over $10 million in relief from various forms of funding at the local, state and federal levels, according to the statement.

PREIT previously announced plans for the sale and leaseback of five properties, the sale of land for multi-family developments at seven properties and the sale of land for hotel development at two properties. PREIT expects to make about $313 million from these transactions. Read more here: South Jersey Mall Owner Lost $38.2M In 2019

The Moorestown Mall recently lost Macy's, Sears and Lord & Taylor, but is bringing in restaurants such as Joe Italiano's Maplewood, Hash House A Go Go and The Yard House.

Last summer, California Pizza Kitchen closed at the Cherry Hill Mall, but PREIT announced it was adding Medici and cosmetics giant Morphe.

PREIT also owns the Cumberland Mall in Vineland, and has an interest in the Gloucester Premium Outlets in Gloucester Township. It sold a parcel of land at the outlets for $937,000 last year, according to the company's financial statement.

See related:
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NJ Coronavirus Updates: Here's What You Need To Know