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PREIT has emerged from its latest bankruptcy, which it declared in December, and will transition from a publicly traded mall owner to a private company.
As part of the reorganization plan, the company reduced its total debt by about $835M, with property-level mortgage debt unaffected by the restructuring.
Redwood Capital Management and Nut Tree Capital Management, both based in New York, led the group of investors that will form its new ownership, under which PREIT will no longer report results to the Securities and Exchange Commission. The investors provided $135M in debtor-in-possession and exit financing for PREIT.
The company's common and preferred stock, including $384M in preferred equity, were extinguished in exchange for a $10M cash distribution to shareholders.
The latest bankruptcy was the second since 2020. The first time around, PREIT remained a public company and received access to fresh financing. By late 2023, the company had amassed over $1B in debt and posted a Q3 2023 net loss of about $63.9M.
PREIT's holdings include the Cherry Hill Mall and Willow Grove Mall, whose day-to-day operations were unaffected by the bankruptcy. The new private company is turning over its 50% stake in the Fashion District in Philadelphia to mall co-owner Macerich.
At the same time as the company emerged from bankruptcy, PREIT's board of managers appointed Jared Chupaila to succeed Joseph Coradino as CEO. Chupaila, who was most recently CEO of Brookfield Properties' retail real estate vertical, will also serve as a member of the PREIT board.
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