Family tradition, changing strategy
Alan Lebovitz moves to top mall management post as third generation of developers lead CBL into new era
As president of the South’s biggest shopping mall owner and developer, Stephen Lebovitz still has the 1998 Time magazine that prematurely proclaimed on its cover “Kiss your mall Goodbye.”
Nearly two decades later, CBL & Associate Properties Inc. headed by Lebovitz still owns and manages shopping malls across America and continues to redevelop and add new tenants for its 118 retail properties. Lebovitz, a third-generation retail developer, bristles at those putting the death notices on the local mall.
The CBL president insists that malls aren’t going extinct — they’re merely changing to capitalize on new trends, technologies and opportunities. The 56-year-old Lebovitz, who succeeded his father in 2010 as CEO of the company founded by and named for Charles B. Lebovitz, stresses that while retailers adapt to e-commerce, more than 90 percent of what Americans buy is still
in brick-and-mortar stores.
“We have great locations and properties and, contrary to what some suggest, people want the experiences that our properties can offer,” Lebovitz said.
“As long as we keep making changes and evolving with the market, these will remain the prime properties in most communities, and we’ll still be here.”
ALAN LEBOVITZ TAKES ON SENIOR MANAGEMENT ROLE
The Lebovitz family continues to lead CBL in keeping its shopping centers vibrant in a company that has been publicly traded since 1993.
Alan Lebovtiz, 49, the younger brother of Stephen, is being promoted this month to senior vice president of management to add to his job as head of asset management at CBL. Stephen’s brother, Michael, is CBL’s executive vice president of development and administration.
Charles Lebovitz remains chairman of the company he started with five other associates in 1978, including his late father, Independent Enterprises founder Moses Lebovitz, who built Chattanooga’s first shopping mall on one of his former drive-in theater lots — what is now Eastgate Town Center.
Alan Lebovitz succeeds Jerry Sink as only the third person in the top senior mall management job. Sink had the job for 25 years, succeeding Ben Landress, one of the original principals in CBL when the company began in 1978.
Alan Lebovitz previously headed asset managment at CBL and combining that role with his new job “gives us a more strategic focus with what we’re doing with our malls that is important given all the changes happening in the retail business,” Stephen Lebovitz said.
CBL consolidated its accounting operations for all its properties in Chattanooga two years ago, but the managers of the centers across the country maintain local autonomy over most of the operations.
In his new role, Alan Lebovitz will oversee a staff of about 300 employees at all of CBL’s properties, which include enclosed malls, community centers, outlet centers and open-air shopping centers from coast to coast.
“We use a team approach and try to support our mall managers, who are really like mayors of small cities,” Alan Lebovitz said. “It’s a combination of home office support and local autonomy. We try to encourage and empower our managers to really take an entrepreneurial approach to the property, which they best understand in each market.”
‘SUBURBAN TOWN CENTERS’ REMAIN VITAL
Lebovitz say CBL remains committed to shopping centers and malls, even though he now refers to the regional mall as a “suburban town center.” The share of retailers in most shopping centers and malls is likely to decline, but that space is being filled with restaurants, fitness facilities, entertainment venues and medical offices, among other users.
“We’re always changing and evolving, but our properties remain vital centers for people to visit, shop and do business,” Alan Lebovitz said.
CBL completed transactions on more than 20 of its lower-performing properties over the past three years as the company trimmed its debt and focused on reinvesting in its other properties.
“We like the platform we have now and our size because we have the economies of scale but we’re not too big that we can’t focus on each asset,” Stephen Lebovitz said.
“Based on the moves made by CBL, I believe that management recognizes that the key to success is to create facilities that cannot be uprooted by e-commerce.” —MATTHEW UTESCH, FINANCIAL ANALYST FOR UMPQUA BANK
BUCKING THE TREND
No new shopping malls have opened in the United States in the past three years and Credit Suisse projected last month that 20 to 25 percent of the nation’s malls could close in the next five years as e-commerce continues to pull shoppers away from traditional brick-and-mortar retailers.
But CBL has successfully redeveloped the Macy’s, Sears and J.C. Penney’s stores closed at its malls into new uses — often with higher-yielding tenants. Since 2013, CBL has redeveloped 1.7 million square feet at a cost of $270 million, but the new uses are yielding a healthy 8.6 percent return for the company.
Among eight JCPenny and five Sears closures at CBL malls in the past four years, CBL either sold the property or replaced all but one. At Brookfield Square in Brookfield, Wisc., near Milwaukee, for instance, CBL redeveloped a portion of Sears into a vibrant 22,000-square-foot restaurant district.
“Based on the moves made by CBL, I believe that management recognizes that the key to success is to create facilities that cannot be uprooted by e-commerce,” said Matthew Utesch, a financial analyst for Umpqua Bank. “With a heavy emphasis on retail that provides an experience (ranging from entertainment to dining), CBL’s new properties are very appealing to companies that face little risk to e-commerce.”
CBL has transformed many of its properties by attracting new and varied tenants. Since 2010, CBL malls and retail centers have reduced the number of Sears locations from 72 to 45, cut JCPenney’s store count from 73 to 52, trimmed Macy’s stores from 47 to 33, reduced Ambercrombie & Fitch outlets from 96 to 44, and reduced Aeropostale stores from 76 to 44.
In the same time, CBL boosted the number of H&M stores from four to 34, increased Ulta Beauty outlets from 12 to 29, and added three more Cheesecake Factory stores to the one it had in 2010.
At Hamilton Place Mall, which celebrates its 30th anniversary next month, H&M and Rodizio Grill are among several new tenants moving into Chattanooga’s biggest mall and keeping the nearly 1.2 million-squarefoot center fully occupied.
“We’re looking more out of the box today, but we have great properties to redevelop. People are looking for experiences and entertainment that we think we can provide,” Stephen Lebovitz said. “That gives us great confidence.”