Philly-area’s biggest mall operator PREIT does a reverse stock split to avoid delisting
Philly mall operator PREIT’s stock jumped Thursday as the S&P tanked, in part because PREIT drastically cut its number of shares. The company still has debts of about $2 billion.
The stock in the Philadelphia area’s largest mall operator soared, though not because shoppers are all of a sudden flocking to malls.
The Pennsylvania Real Estate Investment Trust, or PREIT, which owns malls in Cherry Hill, Willow Grove, Plymouth Meeting among others, drastically reduced its outstanding stock in a 1-to-15 reverse split to boost the share price as it faced a potential delisting on the New York Stock Exchange. The split went into effect Thursday.
PREIT’s stock jumped 34.75% to $5.32 a share Thursday, a day when the S&P 500 index tanked 3.25% on recession and inflation fears. Earlier this week, PREIT stock was trading for about 30 cents a share.
The company told shareholders in March of the delisting threat.
The company filed for bankruptcy protection in 2020. And although it emerged the same year, PREIT still has debts of about $2 billion, a good part of it mortgages on mall properties.
To survive the threat to business from debt and strong online retail competitors such as Amazon, PREIT has said it will sell property to raise cash and cut debt.
It also plans to construct thousands of apartments on its mall properties over time and focus on its top-performing malls. It has been implementing such a plan — for more than 1,000 apartments, an outpatient medical center, and a hotel — for Moorestown Mall.
PREIT also is a part-owner of the Fashion District Philadelphia in Center City, and owns the Springfield Mall in Delaware County and the Cumberland Mall in Vineland, N.J.
At Cherry Hill Mall, the company’s “crown jewel,” sales improved to $944 a square foot in May, up from $936 in late December, the company recently said. PREIT also has signed new leases for eyeglass seller Warby Parker and women’s fashion retailer Marc Cain.
“Our strategic portfolio management strategy designed to own top-tier assets in top suburban markets and the top retail destinations in secondary markets continues to yield results,” Joseph F. Coradino, PREIT’s chairman and chief executive officer, said in a statement on June 9.
PREIT reached an agreement to sell the Exton Square Mall in Chester County for $27.5 million to Brandywine Realty Trust. The Exton property opened in the 1970s and was renovated in 2000.
While Chester County has the highest median family income in Pennsylvania, Exton Square Mall — with 990,000 square feet of retail space — competes with one of the biggest malls in the nation, King of Prussia, and Wolfson Group’s Main Street Exton shopping-and-apartment center.