The NRP Group, a developer in Ohio, has agreed to buy 4 acres of the land the Moorestown Mall sits on as the South Jersey mall has struggled to make money, especially during the pandemic, the Pennsylvania Real Estate Investment Trust said Thursday.
The Moorestown Mall will undergo significant changes, with developers creating a hotel and as many as 1,605 apartments.
PREIT had said earlier this week that it would sell land to multifamily developers but did not indicate who those developers were. NRP is expected to pay $8 million for the four acres, said Heather Crowell, a spokesperson for PREIT. The company did not indicate who the other multifamily developers would be.
The “densification program,” as PREIT called it, is expected to garner more than $150 million, which would help lower the amount of debt the organization has accumulated and be a source for liquidity.
PREIT, the most dominant mall owner in Philadelphia and its collar counties, said in November that it had filed for Chapter 11 bankruptcy, a preliminary step to restructuring, with one of its goals to add $150 million in additional borrowing.
The state of the long-struggling company declined further in October when its shares had dropped to below $1 apiece on average for 30 days, violating its agreement with the New York Stock Exchange. The violation left PREIT at risk of losing its NYSE listing, but the company retained its spot after its share price stabilized as it emerged from bankruptcy with new leeway from its creditors.
In its attempt to bolster its finances, PREIT also has sought a deal to sell off part of the former Strawbridge & Clothier building in Center City.
PREIT said the first stage of its new project at the Moorestown Mall is expected to be the construction of 375 apartments and a hotel.
PREIT said it also then is anticipated to finish building 350 housing units at Exton Square in Chester County. The completion at Exton Square will allow PREIT to begin building for a second stage of development at the Moorestown Mall.
PREIT saw a $16.5 million dip in revenue in its third quarter due to bankruptcies, store closings, and rent abatements for tenants who struggled to pay rent as the number of customers dropped off rapidly during the COVID-19 pandemic, according to the company’s third-quarter earnings report released Nov. 6.
Funds from operation from July to Sept. 30 last year clocked in at 12 cents per diluted share and partnership units, a decrease from 63 cents at the same time in 2019.
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January 16, 2021 at 05:03PM
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PREIT is selling part of its Moorestown Mall property to develop into hotel and apartments - The Philadelphia Inquirer
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