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Philadelphia Pennsylvania Real Estate Investment Trust – known as PREIT – files for Chapter 11 bankruptcy protection, The company told investors on Monday morning.
This is not the first time either.
PREIT filed for bankruptcy three years ago in November 2020 – during the height of the COVID-19 pandemic that began in March 2020.
Back then, PREIT restructured $2 billion in debt, including an unsecured loan guaranteed by Wells Fargo Bank.
This month, PREIT over $1 billion in debt was in danger of defaulting, which led to bankruptcy and the restructuring of its debts that came with that process.
Except this time, after the bankruptcy court, PREIT will no longer be a publicly traded company on the stock market but rather what privately owned by investors.
Either way, PREIT’s shopping mallwhich includes the Center City Fashion District, known in the Delaware Valley.
His portfolio also includes Cherry Hill Mall in New Jersey, Plymouth Meeting Mall, and Willow Grove Park, among others.
Future plans for the Fashion District – which could include a $1.5 billion NBA arena for the 76ers – are still being worked on, according to a statement from 76 Place, the developer. That sentiment was echoed by David Adelman, the owner of the Philadelphia 76ers and the chair of 76 Devcorp.
“It does not affect our plans or the ability to provide a $ 1.5 billion world-class stadium and residential facilities,” according to the statement.
In marketing materials for the Fashion District, The new NBA basketball arena is mentioned on Macerich’s website but no plans or contracts seem to have been shared with the investors at this time.
But apparently, the deal between Santa Monica Macerich Company and Philly mall operator PREIT has changed due to bankruptcy, US Securities and Exchange Commission filings show.
Macerich’s company is carrying $350 million in debt and assets in addition to day-to-day operations, filings show.
In January 2018, a joint venture between PREIT and Macerich called PM Gallery LP took out a $250 million loan to redevelop the Fashion District in Philly and to “pay capital back into the business.” done by partners first.”
The $350 million plan to transform the then-Gallery store into the Fashion District involved more than $90 million in taxpayer dollars. More than half of that amount was tied to a financing deal that included grants typically earmarked for economically disadvantaged neighborhoods.
Developers promised to renovate the mall to generate nearly $200 million in new tax revenue over 20 years while bringing thousands of jobs.
That was before the COVID-19 pandemic halted the economy, sending America’s brick-and-mortar market into a dead end.
In December 2020, the deal was reversed, so PREIT was on the hook for 50 percent of the $350 million loan after Macerich paid $100 million to $250 million.