Springfield Mall Owner Faces Peril, $1.1B In Debt Payments Due

SPRINGFIELD, PA — The parent company of the Springfield Mall and other area malls may struggle to continue operating within the next year, according to recent financial statements from the Pennsylvania Real Estate Investment Trust.

PREIT has about $1.1 billion in debt payments due Dec. 10 that it cannot afford, according to its filing submitted Tuesday to the U.S. Securities and Exchange Commission (SEC). The Philadelphia-based corporation owns 18 mall properties.

The company filed for Chapter 11 bankruptcy protection in November 2020, when COVID-19 upended the mall industry amid an already changing retail landscape. Although PREIT emerged from bankruptcy protection one month later, it may need to file for bankruptcy again with the debt-payment deadline looming, according to the SEC filing.

PREIT says it's working with lenders to evaluate restructuring options. But it's uncertain whether the company will reach an agreement in time to sustain a long term future.

"Given the risks associated with the Company's near-term debt maturities in December 2023 and January 2024, and its ability to implement a successful Restructuring, we believe there is substantial doubt about the Company's ability to continue to operate as a going concern within one year after the date the consolidated financial statements are issued," the SEC filing says.

The report reflects finances through Sept. 30.

PREIT doesn't expect any service interruptions during restructuring negotiations or during any potential transactions. But if the company cannot restructure in a timely manner, it may not have the funds to support daily operations, the filing says.

It's difficult to anticipate what this could mean for the future of PREIT's malls.

A PREIT spokesperson told Patch the following via email:

"PREIT's earnings release mentions our ongoing discussions with lenders regarding a potential restructuring. We understand this could lead to speculation and while we aren’t at liberty to share any additional details than that which has been disclosed to this point, we can state that our discussions with our lenders are in furtherance of a strong and sustainable PREIT.

PREIT is an integral part of the local community, not only as a significant employer but also as a committed investor in the development of the communities it operates in and we, along with our lenders, are committed to advancing this legacy."

PREIT's assets in the region also include the Willow Grove Park, Fashion District Philadelphia, Plymouth Meeting Mall, and New Jersey's Moorestown and Cherry Hill malls.