Major Mall Owners With 130 US Locations File For Bankruptcy

Malls and their retailers were already in trouble due to ecommerce. The pandemic and its related lockdowns have been the final nail in the coffin for many. 

The larger question may be how and when such potentially valuable real estate will be repurposed. JL

Mary Meisenzahl reports in Business Insider:

CBL & Associates and PREIT both filed for Chapter 11 bankruptcy as retail continues to suffer the results of pandemic lockdowns. Malls were already in trouble before the coronavirus pandemic struck, and now they may not bounce back. Macy's, Neiman Marcus, and JC Penney,  anchor stores that occupy large areas of malls and draw customers have struggled in the face of COVID-19 and increased online shopping. Without these tenants, malls can be stuck with huge empty space that is nearly impossible to fill. CBL and PREIT join 35 other retailers that have filed for bankruptcy so far in 2020

The owners of a combined 130 malls just filed for bankruptcy.

CBL & Associates, based in Tennessee, and PREIT, based in Pennsylvania, both filed for Chapter 11 bankruptcy on Sunday as the retail world continues to suffer the results of the pandemic and lockdowns. Both mall chains will remain open during financial restructuring.

Malls were already in trouble before the coronavirus pandemic struck, and now they may not bounce back. Department stores like Macy's, Neiman Marcus, and JC Penney — historically anchor stores that occupy large areas of malls and draw customers in — have struggled to draw in customers in the face of COVID-19 and increased online shopping. Without these tenants, malls can be stuck with huge empty space that is nearly impossible to fill.

Read more: Malls' survival depends on them getting a better mix of stores and making them more interesting to shoppers, the CEO of one major operator says

Both mall chains had mentioned in the past that they were in danger of closing as retailers including JC Penney and Ascena Retail Group filed for bankruptcy this year, CNN reported. Research firm Green Street Advisors told Business Insider in May that it expects half of mall department stores to close by 2021, leaving "excessive dark mall anchor space." In August, CBL noted unpaid rent and low foot traffic, along with increasing debt, as factors that could lead to bankruptcy, CNN reported.

"Widespread department store closures will accelerate the demise of many malls," Green Street Advisors said in a spring report. "Many malls will be faced with multiple anchor vacancies, a tough place to come back from."

More retailers filed for bankruptcy in the first nine months of 2020 than in all of 2019. CBL and PREIT joined the 35 other retailers and restaurant companies that have filed for bankruptcy and liquidation so far in 2020, likely with more to come.