Capital City Mall owner files for Chapter 11 bankruptcy protection
HARRISBURG, Pa. (WHTM) — Pennsylvania Real Estate Investment Trust (PREIT), the owner of dozens of malls, including Capital City Mall in Lower Allen Township — has filed for Chapter 11 bankruptcy protection.
“Importantly, all PREIT locations remain open for business and will continue operations without interruption. Operations at Capital City Mall are continuing as normal and customers can continue to shop as they always have,” a PREIT spokesperson told abc27 News in a statement Monday morning.
Some analysts had anticipated the bankruptcy filing.
In a release Monday morning, the company said the move could reduce its debt by $880 million. PREIT said all its key lenders — whose money is at risk — have agreed to the plan. PREIT has $135 million of what’s called debtor-in-possession, or DIP, financing to help it restructure.
By common industry metrics, Capital City Mall is generally considered a relatively successful indoor mall, in an era when others have struggled.
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The plan “will allow PREIT to continue its legacy as an integral part of its communities as a significant employer committed to the transformation of its properties,” the spokesperson said. “In fact, Capital City Mall recently welcomed BoxLunch, Bonchon, Boba Cha and Lovisa.”
PREIT previously filed for Chapter 11 bankruptcy protection in November 2020, in the wake of extended pandemic-related, government-ordered store closures. The company sold some underperforming malls but remained heavily indebted.
PREIT’s history dates to 1960, when — according to a published company history — it was founded as one of the first publicly held REITs, or real estate investment trusts.
“The Capital City Mall team’s primary focus remains creating compelling retail and experiential destinations while prioritizing the experience of our employees, partners, customers and communities,” the spokesperson said.
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