South Jersey Mall Owner To Go Bankrupt For 2nd Time In 3 Years

SOUTH JERSEY — The owner of two South Jersey malls has filed for bankruptcy protection for the second time in three years.

Pennsylvania Real Estate Investment Trust (PREIT) filed a Chapter 11 petition Sunday — the trust's deadline for about $1.1 billion in debt payments. The plan would allow PREIT's shopping centers — including the Cherry Hill and Moorestown malls — to continue operations without interruption during the restructuring process.

"We look forward to quickly emerging from this process as a financially stronger company with the resources and support to continue creating diverse, multi-use property experiences throughout our portfolio," CEO Joseph F. Coradino said in a statement.

PREIT's assets include 18 malls, mostly in the Mid-Atlantic. With the debt maturity looming, the company expressed doubts last month that it could repay the debt or continue operating within the next year, according to financial disclosures.

• From Nov. 17: NJ Malls' Owner Faces Immediate Peril With $1.1B In Debt Payments Due

Under PREIT's proposed re-organization plan, announced Monday, the corporation will reduce its debt by $880 million. PREIT will no longer be publicly traded and will pay its stockholders $10 million.

The agreement also extends the corporation's maturity runway, providing PREIT with a five-year window to repay the loans.

PREIT's existing lenders unanimously agreed to the proposal, which is subject to approval from the federal bankruptcy court in Delaware. The investment trust plans to emerge from bankruptcy by early February.

PREIT will pay all of its employees, suppliers and vendors during bankruptcy proceedings.

Founded in 1960, the Philadelphia-based company steadily built up a portfolio of shopping centers. In 2003, PREIT acquired six malls from The Rouse Company, including those in Cherry Hill and Moorestown.

PREIT thrived in the mid-2000s and peaked at $721.50 per share in July 2005. But its stock values cratered during the Great Recession and totaled $42.75 per share in early 2009. The company rebuilt some of that value, reaching about $350 per share in 2016. But thereafter, stock values steadily declined, with the pandemic dealing the final blow before PREIT filed for bankruptcy in November 2020.

Although PREIT emerged from bankruptcy protection one month later, the company has financially struggled since. Last summer, shareholders voted for seven trustees to leave their positions.

The company closed last week at 24 cents per share.

Despite the financial turmoil, PREIT has expressed confidence in its two South Jersey assets. Cherry Hill Mall has long been its top performer, while executives have touted the redevelopment of Moorestown Mall as a company bright spot.

Cooper University Health Care opened a 166,000-square foot outpatient facility at Moorestown Mall last month. A 375-unit apartment complex and a massive family-entertainment complex are also in the works.

Read more:

• Cooper Facility In Moorestown Offers Range Of Services, Hope For Mall
• Moorestown Mall Amusement Center Moving Forward: When It Could Open

According to court documents, PREIT hopes to amend plans for bonuses, employee retention, and the contracts of Coradino and CFO Mario C. Ventresca Jr. The changes would impact people directly employed by PREIT, rather than employees of retailers and businesses in its malls, a company spokesperson told Patch.