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Washington Prime: Another One Bites The Dust


  • As the reality of 2020 sunk in, we authored a piece describing the pending demise of Washington Prime Group.
  • We ran the numbers and there was no path for the REIT to make interest and debt payments in a timely fashion with the cash flow available from the portfolio.
  • This piece will provide an update on this rare event and discuss what we can take away from it.
  • This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Learn More »

This article was coproduced with Williams Equity Research ("WER").

On Thursday Bloomberg reported that Washington Prime Group (WPG) "is preparing a potential bankruptcy filing as time runs out to avert a default after it skipped an interest payment on its debt, according to people with knowledge of the plans."

Bloomberg writes that Washington Prime "would use a 30-day grace period to continue negotiations with its lenders. Yet those talks are faltering...the plan to file for Chapter 11 protection isn’t final and could change if negotiations evolve..."


The Story Hasn't Changed

As noted in this article written almost exactly one year ago, we commented on Washington Prime Group's (WPG) prospects.

We still urge significant caution with WPG common stock and consider investments in beaten down Tier 1 retail REITs, such as SPG, BPR, and SKT to provide better risk-adjusted returns.

Subscribers frequently ask us about this mall REIT as the yield and valuation have appeared compelling at times. We recognize the temptation and have done our best to give a balanced perspective on the REIT and its management team over time.

This corresponds with one of the most important aspects of investing for individuals who manage their own portfolios.


There's a big difference between value investing and dumpster diving. Value investing incorporates core characteristics of a business and its valuation to assess when a stock is under or overvalued. It's often calculated against peers, the company's asset class, the broader equity markets, and/or the company's own historical earnings or cash flow multiples.

Dumpster diving, a term often thrown around the trading floor during WER’s hedge fund days, is much different. There is often minimal analysis involved and the investment "thesis" boils down to: it's already down 90%, how much further can it go?

Unfortunately, it can always go down another

March Madness Price: $999 For All 3 Services

Join iREIT on Alpha today and get a “front row seat” to our “March Madness” REIT Bracketology series where we break down each property sector to arrive at the “Sweet 16 REITs” to own.

We include exclusive video so our members can get all of the latest and greatest insight and maximize portfolio performance. Our coverage spectrum includes equity REITs, mREITs, Preferreds, BDCs, MLPs, ETFs, and we recently added SPACs to the lineup.

And this offer includes a 2-Week FREE TRIAL plus my FREE book.

This article was written by

Brad Thomas profile picture

Brad Thomas has over 30 years of real estate investing experience and has acquired, developed, or brokered over $1B in commercial real estate transactions. He has been featured in Barron's, Bloomberg, Fox Business, and many other media outlets. He's the author of four books, including the latest, REITs For Dummies.

Brad, with his team of 10 analysts, runs the investing group iREIT® on Alpha, which covers REITs, BDCs, MLPs, Preferreds, and other income-oriented alternatives. The team of analysts has a combined 100+ years of experience and includes a former hedge fund manager, due diligence officer, portfolio manager, PhD, military veteran, and advisor to a former U.S. President. Learn more

Analyst’s Disclosure: I am/we are long SPG, SKT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Author's note: Brad Thomas is a Wall Street writer, which means he's not always right with his predictions or recommendations. Since that also applies to his grammar, please excuse any typos you may find. Also, this article is free: Written and distributed only to assist in research while providing a forum for second-level thinking.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (244)

Yes, WPG is -50% already in Frankfurt.
Brad Thomas profile picture
Washington Prime files for Chapter 11

Herbert 5223 profile picture
Good call!
donamp123 profile picture
I bought this one under a dollar, and then, Stock Reversed to about $8
When this guy hit $8.01 - I’m out!!
Investing is a risk also a reward. I carry risk of this one for almost a year.
I have learned about this one as “greed”.
I did mention this will happen:


Buy GWAC, my new 100X bet, thank me later!
donamp123 profile picture
WPG: It's still around.
Like in the movie "First Blood" John Rambo; one of Deputy Sheriff said toward the end. "He's still around!"
So, WPG is NOT yet dead.
Toofuzzy profile picture

Monty python

" I'm not dead yet ! "
@Toofuzzy Looks like the rest of that sketch just came true this morning "shut up, you're not fooling anyone, you'll be stone dead in a moment." seekingalpha.com/...
Maybe this company should be called Lazarus Prime. Seems to have risen from the grave.
donamp123 profile picture
WPG is up 113.51% [$4.74] at market closed 4:00pm EST. June 1, 2021.
What is going on?
Brad Thomas profile picture
@donamp123 Exuberance. not fundamentals :)
Loophole69 profile picture
@Brad Thomas - Or is it a huge "dead cat bounce"?
Brad Thomas profile picture
@Loophole69 secular shift underway and Covid-19 has accelerated the trend...thus, bounce not based on fundamentals.
NotARetiree profile picture
Down over 80% for the year, up over 100% today.
Brad Thomas profile picture
My Son Just Hit It Big, What Next?

Toofuzzy profile picture
I bought WPG last January. It popped 40% sold, then bought back in when it pulled back in February. I guess I didn't see your article and thought the virus was overblown at the time ( just before it became serious )

I guess you feel there is ZERO value that will be left for stockholders.
Brad Thomas profile picture
Just posted the IIPR CEO and CFO interview at iREIT on Alpha

20% off during March Madness

Brad is one of the premier quarterbacks on the Monday morning football league.
bagger10 profile picture
WPG bonds holding at 55.75.

Assuming a bankruptcy filing, do you prefer CBL bonds at 48 or WPG bonds at 55.75 (again, assuming both in Chapter 11)?
@bagger10 Need to see the terms of the WPG deal and BTW the Cbl deal is changing so you need to see that as well. Likely both deals lock you out of the rights offering since it will be a private.Unless your a QUIB
bagger10 profile picture
@cmon Lets save Speedy Gonzales & Pepe I have only been able to join a backstop group in VAL, but allowing retail to join rights offerings is becoming the norm. I have already advised the CBL unsecured creditors committee that retail should be able to join both (if there ends up being a rights offering to pay some cash to secured debtholders) - we'll see.

CBL will extinguish a lot more pref than WPG, so I lean toward owning CBL bonds at this point (assuming WPG also files Chap 11).
@bagger10 ALL cbl pref is going, I suspect the same in WPG, the cbl new 50mm for the convert is spoken for, retail locked out
I refuse to buy any mall operators
@jjdylag I refuse to refuse to buy any mall operators
Sell options
Btw, this looks like it has gone the way of the FOMO traders. They got in yesterday because of the fake news and it is on their watch lists now. They are spewing alternative facts on the message boards. Don't know what will happen to the stock between now and the BK filing (or news of deal with banks) but be careful if you are shorting.
42 well-deserved likes, 186 comments, and not one on the Flash Gordon shirt or the man wearing it, and only 1 comment (thank you @goodfellasfinancial )
on the band of the man wearing the Flash Gordon shirt whose lead singer the CEO of Washington Prime used to quote so much?

Thank you also @brad Thomas for another great article. So much of the subtleties went over the heads of almost everybody here.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

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