South Jersey mall faced financial problems when it was sold

Jim Walsh, Cherry Hill Courier-Post
·2 min read

VINELAND – Cumberland Mall had defaulted on its mortgage when the shopping center was sold last year, the former owner has disclosed.

PREIT, a Philadelphia-based shopping center operator, also wrote down the Vineland mall’s value on its books by $4.9 million, the firm said in an annual report on its 2022 operations.

The writedown, called an impairment of assets, helped increase PREIT's annual net loss by $14.7 million, to $150.6 million, according to a filing with the U.S. Securities and Exchange Commission.

In the filing, PREIT said a subsidiary defaulted on the Vineland mall’s mortgage on Aug. 1, 2022, when it missed a balloon payment of $38.2 million.

More: Did shedding Cumberland Mall improve finances for owner of Cherry Hill, Moorestown malls?

The company paid off the debt when it sold the mall on Oct. 31, 2022, PREIT said.

In a statement issued March 28, the company said Cumberland Mall "was only in default because PREIT hadn’t extended it as the sale was pending."

What malls does PREIT own?

The Philadelphia-based firm operates 19 malls, including Cherry Hill Mall and Moorestown Mall.

Cumberland Mall, at Routes 47 and 55, had an occupancy rate of 90.8 percent at year-end 2021, the fourth-lowest of PREIT's portfolio.

Cumberland Mall buyer from New York

The mall’s buyer, Kohan Retail Investment Group, is a Long Island-based operator of about 60 shopping centers, according to property records.

PREIT filed the report five days after announcing its net loss for 2022.

The report also noted a $39.2 million write-down for its low-performing Plymouth Meeting Mall in suburban Philadelphia, and the foreclosure sale in May 2022 of PREIT's former Valley View Mall in LaCrosse, Wisconsin.

It said positives for the firm included gains from the sale of real estate and lease revenue.

For the third year in a row, PREIT's report acknowledged “there is substantial doubt about our ability to continue as a going concern.”

PREIT has based a turnaround effort on the diversification of its tenant base and the sale of assets to reduce its debt.

Jim Walsh is a senior reporter with the Courier-Post, Burlington County Times and The Daily Journal.

This article originally appeared on Cherry Hill Courier-Post: Vineland NJ: Cumberland Mall sold after defaulting on mortgage