Warner Estate Holdings said its net asset value was now negative as it reported its half-year results for the six months to the end of September.
NAV fell from 8p to -43p a share, giving it a net deficit of £23.6m, during the period. Warner owns shopping centres in Bolton and Birkenhead as well as the Ashtenne industrial property fund, which has a joint venture with the North West Development Agency to manage industrial estates.
Chairman Philip Warner said the £250m debt refinancing negotiations were making "satisfactory and constructive progress".
The listed fund has been negotiating a refinancing with Royal Bank of Scotland, Bank of Scotland and Barclays and talks continue.
Warner said in his statement: "Each lender has currently reserved its rights to formally request the testing of certain financial covenants and the directors would not expect the covenants to be met if tested.
"Acknowledging the uncertainties in the property market and in the economy as a whole, the directors have stress tested the assumptions in their forecasts with respect to rental income and property costs, overheads, management fee income and related costs and distributions from equity investments in funds."
Warner suffered a 5.8% drop in the value of its portfolio, compared to a 3.5% fall of the Benchmark Investment Property Databank index.
Stripping out the valuation change, pretax profit fell from £5.7m at the same time last year to £0.8m.