CBL Properties files for Chapter 11

It is hardly controversial to say that the COVID-19 pandemic and lockdowns have had a devastating effect on businesses, especially in the service and retail sectors. One type of business that has been particularly effected are malls. This week CBL Properties, one of the nations largest retail investment trusts, declared bankruptcy. CBL owns five major malls and shopping centers in the St. Louis area. What impact will this have on local shopping and commercial real estate?

CBL Properties owns 107 properties across 26 states, mostly in the Midwest and Southeastern United States. In St. Louis, they own the West County Center, South County Center, Mid Rivers Mall, St. Clair Square and the Shoppes at St. Clair Square.

The company is based out of Chattanooga, Tennessee, and is filing for voluntary Chapter 11 through the U.S. Bankruptcy Court District of Southern Texas, in a move to restructure the company and pay off its debts.

They have struggled especially with the steep decline in popularity that malls have experienced during the pandemic. As a result, many tenants have failed to pay rent, CBL said. The Pennsylvania based company, PREIT, which also owns many of the country’s malls, has also filed for Chapter 11 recently, citing similar reasons.

What does this mean for their properties in St. Louis? In announcing that they have filed for Chapter 11, CBL has stressed that the current restructuring will not have any immediate impact on the day to day operations of their properties.The West County Center et al. are not going to shut their doors due to this restructuring.

According to their Chapter 11 filing, CBL’s assets and liabilities are in the similar range of $1 billion to $10 billion. In public statements, they have expressed confidence that this restructuring will put them on better footing going forward.

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