CBL is moving forward with fewer apparel tenants at its malls

The Chattanooga, Tenn.–based REIT reports that same-center NOI declined by 6.7 percent in the fourth quarter and by 2.9 percent for the year. Average gross rent per square foot declined by 5.4 percent in 2017 from the year before.

“2017 was an especially challenging year for many of our retailers, with more than a dozen in our portfolio filing for bankruptcy,” President and CEO Stephen D. Lebovitz said in a conference call with investors. “The related store-closure and rent-reduction activity translated into more than $24 million in gross annual rent loss impacting our portfolio.”

CBL is in the early stages of refilling these and expects  the majority of the new rental income to come online in late 2018 and 2019. The firm is reducing the percentage of apparel tenants on its roster. “Seventy-five percent of our total new leasing in 2017 was executed with nonapparel tenants,” Lebovitz said. “We are adding a wider range of uses to our centers — more restaurants, more boutique and value retailers, more health, wellness and fitness, and more entertainment."

CBL is also working to add hotel, medical office, multifamily and other uses to its properties, Lebovitz says. The firm is in active discussions for six hotels and two multifamily projects to become part of its redevelopment efforts, he says.

"Looking forward, we expect some continued headwinds from retailers," Lebovitz said. "However, we are encouraged that many of these companies are adopting new technologies that are driving increased store traffic and sales. Our goal for 2018 is to stabilize the performance of our portfolio and accelerate the reinvention of our properties, positioning CBL for growth in 2019 and beyond."

CBL’s portfolio comprises 119 properties, totaling 74.4 million square feet across 27 states.