Another big loss for owner of Cherry Hill and Moorestown malls
PHILADELPHIA – A recent conference call to discuss corporate earnings was notable for a subject that was largely avoided — the actual finances of a local mall operator.
Instead, an executive for Philadelphia-based PREIT — owner of the Cherry Hill and Moorestown malls — delivered an upbeat view for almost eight minutes of a roughly 10-minute call.
"We're pleased to report continued traction in leasing and occupancy amid vibrant tenant demand," CEO and Chairman Joseph Coradino said in starting his remarks.
Then another official delivered the bad news: PREIT had a net loss of $45.6 for its latest quarter, up from an $11 million deficit one year earlier.
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First-half figures were also dismal. That net loss was $91.3 million, up from $44 million in the same period of 2022.
PREIT owns 23 properties, including 19 shopping centers, in eight, largely Mid-Atlantic states.
The firm said Cherry Hill Mall is its top performer, with $922 in sales per square foot. Moorestown Mall ranks 14th with a comparable figure of $464.
Higher interest costs contributed to the larger loss for the quarter ended June 30, PREIT said..
PREIT: Cumberland Mall sale hurt revenues
It also reported a decline in revenues — from $73.1 million to $67.4 million for the quarter and from $142.5 million to $134.7 million for the year’s first half.
Revenues were hurt by last year’s sale of Cumberland Mall in Vineland and shedding PREIT’s 25 percent share in Gloucester Premium Outlets, Blackwood, the company said.
And in a filing with the U.S. Securities and Exchange Commission, PREIT said it’s “pursuing all available alternatives” to satisfy lenders as key payment deadlines approach.
Mall operator selling assets as debt deadline nears
It said asset sales had helped reduce its roughly $1 billion in debt by more than $50 million this year, but added “no assurance can be provided that we will be able to refinance, restructure or repay the indebtedness at maturity …”
As part of that effort, PREIT extended maturity to Dec. 1 for a $228.7 million mortgage backed by Cherry Hill Mall. An option would allow the date to be moved a second time to May 1, 2024.
PREIT also noted a $53 million loan for its Dartmouth Mall in Massachusetts is in default.
The filing also noted risks from a dispute over PREIT’s board of trustees.
It said some shareholders, unhappy with PREIT’s stock price, had urged board members to resign.
The company has rejected that demand, contending the board “has taken responsible action to maximize value for all shareholders and other stakeholders.”
But if the shareholders step up their challenge, "our business could be adversely affected,” the filing said.
It noted the possibility for costly legal fees, the loss of key employees and distraction for top executives.
PREIT has moved to diversify its properties, with a health care center and an apartment complex under construction at Moorestown Mall, for instance..
About 28 percent of PREIT"s mall space now holds “non-traditional tenants,” the company says.
Jim Walsh is a senior reporter with the Courier-Post, Burlington County Times and The Daily Journal. Email him at jwalsh@cpsj.com.
This article originally appeared on Cherry Hill Courier-Post: PREIT selling off assets like Cumberland Mall in bid to reduce debt
