Bankruptcy Concerns for Washington Prime Group: What Does That Mean for the Southgate Mall?

While Missoula’s Southgate Mall continues to expand with a 100,000+ square foot Scheels, bankruptcy concerns plague the Mall’s ownership group, says Bloomberg News.

The Real Deal Real Estate News reported that Washington Prime Group (WPG) is struggling to reduce its debt, with lender negotiations breaking down and rent collections down lagging across properties. WPG owns 114 malls, including the Southgate Mall in Missoula, Montana.

WPG isn’t the first mall struggle in recent months. PREIT and CBL & Associates Properties both filed for Chapter 11 bankruptcy back in winter 2020. COVID closures and consumer concerns put the trend of declining mall traffic in hyperspeed, with individual retailers declaring bankruptcy in droves. 

Does this mean the Southgate Mall is on its last legs? Likely not. In a common Chapter 11 bankruptcy filing, WPG malls will continue to operate while a business restructuring takes place.

Many major airlines and automotive manufacturers, as well as retailers like Neiman Marcus, have successfully navigated bankruptcy proceedings (learn more about a Chapter 11 bankruptcy here). 

But, we’re already seeing some closures in malls. There are retailers that won’t survive the current and after effects of the pandemic – though many of these brands were struggling with the shift to e-commerce even before the pandemic hit. 

We’ll keep tracking this story in Missoula and share more details.