PREIT Cedes Handle Of Fashion District To Macerich

In purchase to get out from below an onerous financial debt load, PREIT has ceded command of its flagship asset: the $420M Fashion District Philadelphia shopping mall.

Bisnow/Matthew Rothstein

The principal entrance of Trend District Philadelphia, named the Dice Plaza, at Ninth and Industry streets two times right before its opening on Sept. 19, 2019.

The Macerich Co. will operate the operations for the mall starting Jan. 1 as aspect of an agreement whereby the California-primarily based retail REIT will pay out $100M of PREIT’s financial debt on the assets, in accordance to an 8-K submitting with the Securities and Trade Commission and to start with claimed by The Philadelphia Inquirer.

Macerich and PREIT will continue to own equivalent halves of the equity for the Center City mall, PREIT CEO Joe Coradino told the Inquirer.

There is now $201M in principal remaining on the mortgage Wells Fargo presented for the 800K SF Manner District, which is independent from the $913M unsecured loan to PREIT itself that Wells Fargo retains. Wells Fargo is the primary creditor for both equally Vogue District and PREIT, which owes about $2B in debt in general towards belongings valued at $2.4B, the Philadelphia Business enterprise Journal experiences.

PREIT emerged from Chapter 11 bankruptcy security on Dec. 11 as component of a offer that permitted it more time to pay back $1B of its personal debt and accessibility $130M in new money, PBJ studies. PREIT filed for bankruptcy on Nov. 2 with a system that was pre-accredited by 95% of its collectors, which integrated putting up houses that PREIT owns no cost of debt as collateral for $891M of formerly unsecured financial debt.

When PREIT opened Style District in the drop of 2019, the REIT was now in troubled waters owing to the sagging attractiveness of indoor malls and a collection of bankruptcies among its tenants. The first complete yr of operation for Style District was supposed to travel a return to glory for PREIT following a multi-12 months slide in worth.

As a substitute, the coronavirus pandemic pressured the closure of Manner District and each and every other shopping mall in PREIT’s portfolio in March. Even following reopening, business enterprise never ever thoroughly recovered as safety worries and capability limits on indoor browsing lingered by way of the summertime and have nonetheless to abate.