Cumberland Mall owner Pennsylvania Real Estate Investment Trust (PREIT) recently closed a $45 million deal for the mall’s sale to Kohan Retail Investment Group of Great Neck, NY. This brought the cash-strapped company to a level of capital raised through asset sales this year to $110 million. The new owner will retain the same former PREIT management staff at the mall.
The proceeds from the sale of the mall will be used to repay a $39 million mortgage balance with the excess proceeds used to pay down the company’s credit lines, making a meaningful balance sheet improvement. The company is underway with a robust capital raising effort, seeking to improve its balance sheet and mitigate the impact of interest expenses to drive earnings.
As a result of completed asset sales, the company has applied proceeds and excess cash from operations to pay down debt by $148 million through October 31, 2022. The company has an additional $127 million of assets under contract or negotiation for sale which are expected to close in the coming months. PREIT also has a robust pipeline of additional asset sales in various stages, including Phase II of its multifamily land portfolio.
“We are pleased to make significant progress in executing on our plan to improve our balance sheet by raising capital through asset sales and driving value through our leasing and redevelopment efforts,” said Joseph F. Coradino, Chairman and CEO of PREIT.