PREIT’s Exton Square Mall Might Go Up For Sale As New Ownership Weighs Its Future
Under new ownership and fresh out of bankruptcy protection, PREIT is considering pursuing a sale of the Exton Square Mall as it charts a fresh course for the 18 mall properties in its portfolio.
The nearly half-vacant 989K SF property west of Philadelphia was on the verge of a sale as recently as 2023, though that transaction fell through. Now, PREIT's new chairman of the board said the property remains listed as the newly private company sorts through its holdings, according to the Philadelphia Business Journal.
“It is potentially up for sale now,” Executive Board Chairman Glenn Rufrano told PBJ. “We’re going to continue to evaluate that. Part of that evaluation may be an offer that we get. But right now, the existing management team thought that was the best approach and we’ll evaluate that as we take a look at the whole portfolio.”
PREIT got a fresh infusion of $130M from new owners Redwood Capital Management and Nut Tree Capital last week and emerged under new leadership, with investors now led by both New York-based groups and former Brookfield Properties' exec Jared Chupaila replacing Joseph Coradino as CEO.
Under the terms of the restructuring, PREIT reduced its total debt by about $835M with its property-level mortgage debt unaffected.
But prior to filing for Chapter 11 bankruptcy in December, the firm attempted to raise funds ahead of a nearly $1B debt maturity, including selling off Exton Square Mall and the 990K SF Plymouth Meeting Mall.
As of mid-2022, Exton Square was under agreement for sale to Brandywine Realty Trust for $28.8M, but that transaction fell out, according to PREIT’s annual report filed last month to the U.S. Securities and Exchange Commission.
PREIT did manage to sell off a parcel leased by Whole Foods at Plymouth Meeting Mall for $27M to Michigan-based Agree Realty. The 65K SF grocery store opened in 2010 and has a long-term lease on the property.
Exton Square continues to be listed by JLL and is being marketed for redevelopment. The mall is 62% occupied and zoned for mixed-use, so residential could be added to the 72-acre site, which PREIT had classed as a “non-core” for years.
The trust’s holdings also include the Cherry Hill Mall and Willow Grove Mall, both of which are unaffected by the reorganization. However, as a new private company, PREIT has begun the process of turning over its 50% stake in Center City's Fashion District to mall co-owner Macerich.
Rufrano said PREIT would consider trimming its portfolio down further, but only if it makes sense, PBJ reported.
“What I see us thinking about a lot is not whether you’re buying or selling anything, but I think Jared and I and the owners at Redwood and Nut Tree think about how do we increase the value of this enterprise?" he said. “That’s the prime mover here that we’re going to be thinking about. Not whether you buy or sell something but how do you increase value?”
