While many of the coronavirus-related emergency measures have been lifted across the country, shopping malls are still struggling despite the increased demand and foot traffic. Washington Prime Group, one of the nation's largest mall owners, filed for chapter 11 bankruptcy, citing the temporary closures and reduction in rent payments from tenants.
Washington Prime Group owns over 100 shopping malls across the United States but has amassed nearly $1 billion in debt.
The company said that it has secured $100 million in new funding that will allow it to operate "without interruption" during the bankruptcy proceedings.
"The company's financial restructuring will enable Washington Prime to right-size its balance sheet and position the company for success going forward," said CEO Lou Conforti. "During the financial restructuring, we will continue to work toward maximizing the value of our assets and our operating infrastructure."
Washington Prime Group was hit hard by the coronavirus pandemic and saw its rental income drop by $127 million in 2020, compared to 2019. The company struggled to rebound during the first three months of 2021, with income down by $20 million compared to the same time in 2020.
Washington Prime Group is the third mall operator to file for bankruptcy due to the coronavirus pandemic, joining CBL & Associates Properties Inc and Pennsylvania Real Estate Investment Trust.
"The bankruptcy shows that while things are now getting back to normal, many of the scars left by the pandemic have not fully healed," Neil Saunders, retail analyst and managing director at GlobalData, said, according to CNN.