PREIT exits Chapter 11, new CEO takes over
PREIT, one of the premier regional mall owner-operators in the eastern half of the United States, has emerged from Chapter 11 for the second time in the last three years.
The Philadelphia-based company reported that it had successfully concluded a financial and corporate restructuring and exited from the bankruptcy protection it filed for last December.
Through the plan, PREIT reduced its total debt by approximately $835 million, extended its maturity runway, and received commitments of approximately $130 million of new money debtor-in-possession financing and exit revolver financing from a diverse group of leading investors led by Redwood Capital Management, LLC, and Nut Tree Capital Management, LP.
Trade creditors and property level mortgage debt were unaffected by the restructuring. Under the Plan, PREIT’s existing equity interests, including $384 million of preferred equity interests, were extinguished in exchange for a $10 million cash distribution.
As a result of its corporate reorganization and consolidation of equity holders, PREIT is no longer an SEC reporting company.
The big mall owner emerges Chapter 11 under the leadership of a new CEO, as well.
Jared Chupaila, who was CEO of Brookfield Properties’ retail real estate vertical, has been named to replace Joseph F. Coradino, a 40-year veteran of PREIT. Chupaila ended 15 years with General Growth Properties and was its executive VP of leasing when the company was acquired by Brookfield in 2018.
Coradino, who served as PREIT’s chief since 2012, was one of the first big mall operators to begin divesting low-performing properties and seeding well-performing centers with top-brand food and beverage and entertainment tenants. Over a five-year period under his direction, PREIT replaced 20 irrelevant anchors with more than 40 new tenants. Coradino will continue to serve in a consultant capacity to the company to assist with a seamless transition.
As part of the restructuring, PREIT negotiated a release of guarantees associated with the Fashion District Philadelphia joint-venture, under which the company transferred its equity interest in the urban mall on Philadelphia’s Market Street to its partner Macerich in exchange for a full and complete release and an indemnification of any claims that PREIT may owe under its guaranties issued in connection with the Fashion District loan agreement.