Partner Steven Wilamowsky was quoted on CBL & Associates’ bankruptcy filing and how the combination of online shopping and the COVID-19 pandemic may lead to more mall owner bankruptcies in 2021.
Steve said that more mall owner bankruptcies are likely to crop up next year, especially if this year’s holiday shopping season is flat.
“Lenders are going to want to see how this shakes out,” he said. “They’re going to be patient and see what happens [with] COVID.”
However, Steve added that bankruptcy proceedings are more complicated for today’s mall owners. Struggling malls will need more than a financial restructuring, he said, they will need a fundamental restructuring of how their space is used or face closure.
He added that while landlords of top-performing malls have a better chance of surviving financial challenges, even the strongest landlords won’t come out of the current environment unscathed, as their debt on certain properties might need to be restructured.
“I think there’s great cause for concern,” Steve said.
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