Forever 21, the fast fashion retailer that filed for bankruptcy in September, is dead -- but it may rise from the grave.

Brookfield Property Partners (BPY) and Authentic Brands Group (ABG) are joining Simon Property Group (SPG -0.84%) to form a venture to save Forever 21 -- bringing the company out of bankruptcy and potentially turning the business around. "If we are successful at turning it around, we will make money at F21 and we will make our rent," Simon Property CEO David Simon said on a morning earnings call Tuesday. 

Young woman holding balloon numbers 21

Image source: Getty Images.

Forever 21 is the seventh biggest tenant in malls owned by Simon, which is leading the buyout venture. When Forever 21 filed for Chapter 11, Simon saw an opportunity to place an $81 million "stalking horse bid" to acquire the company's assets. (A stalking horse bid is when someone commits to acquire assets of a bankrupt company for a given, usually lowball price, and waits to see if anyone else makes a higher bid).

So far, no competing bids have emerged, and if none do, Simon and its partners will be able to acquire Forever 21 for a song (along with the retailer's operating liabilities, which won't be so sweet).

Why would Simon Property Group want to risk this? If Forever 21 can be revived quickly, its $2 billion-a-year annual revenue stream should remain mostly intact -- and Simon will own "just under" 50% of that, according to TheRealDeal. For its part, Simon insists Forever 21 is a good business that can "be turned around."

And Simon knows whereof it speaks.

Three years ago, Simon partnered with ABG to buy Aeropostale out of bankruptcy. At the time, Aero was losing $100 million a year in negative EBITDA. Today, it's profitable again with EBITDA of $80 million.

Simon Property Group stock is up 3.1% as of 12:30 p.m. EST in response to the news.