The Columbus-based real estate investment trust that owns two Dayton-area malls is apparently inching closer toward bankruptcy.
In a fourth quarter earnings report released this week, Washington Prime Group reported “there exists substantial doubt about the company’s ability to continue as a going concern.”
But the company, which owns the Mall at Fairfield Commons in Beavercreek and Dayton Mall in Miami Twp., said it had reached an agreement with creditors extending until the end of this month a deadline to pay a $23.2 million interest payment that was initially due Feb. 16.
But its unclear if the company can dodge Chapter 11.
“The company is continuing to engage in negotiations and discussions to restructure its capital structure,” it wrote. “The uncertainty associated with the company’s ability to meet these obligations as they become due raises substantial doubt about the company’s ability to continue as a going concern as defined by generally accepted accounting principles.”
Discussion with lenders has included renegotiating the terms of the loans as well as bankruptcy, the company said.
“Although the company continues to be open to all discussions with the holders of the notes and its other stakeholders regarding a potential restructuring, there can be no assurance the company will reach an agreement regarding a restructuring in a timely manner, on terms that are attractive to the company, or at all,” Washington Prime said.
The company said it expects to continue to provide service to customers “without interruption and work with its business partners as usual during the course of these discussions and any potential transaction.”
Washington Prime in recent years has been beset with the same struggles befalling malls nationwide: anchors and regular-size tenants sliding into bankruptcy and shuttering their stores. Elder-Beerman and Sears in 2018 closed locations at both Dayton Mall and The Mall at Fairfield Commons.
Whiles malls often find tenants to replace anchors, those tenants rarely have the cachet to entirely restore the luster lost by a mall when an anchor closes, let alone regain the kind of drawing power formerly enjoyed by big-name retail tenants.
The mandatory closing of stores deemed non-essential at the start of COVID-19 and subsequent decreased business during the pandemic have done little to boost retailers’ bottom lines, leading to further woes for mall owners nationwide as those stores either cannot pay their rent or close entirely.
Washington Prime said in its earnings report that it lost $111.4 million in the fourth quarter of 2020 compared with it earning $17.1 million in profit during the same three months of 2019. Washington Prime lost $233.8 million in 2020 after losing just $11 million the year before, according to the report.
In the final minutes of trading on Thursday, the company’s shares hit $2.82. A year ago, they were trading at $10.44.
Washington Prime operates 100 shopping centers, most of them in the Midwest, on the East Coast, and in Florida and Texas.
In addition to its two Dayton-area malls, the company owns seven other Ohio properties:
· Great Lakes Mall in Mentor
· Indian Mound Mall in Heath
· Lima Mall in Lima
· New Towne Mall in New Philadelphia
· Polaris Fashion Place in Columbus
· Southern Park Mall in Youngstown
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