CBL says earnings drop tied to closings

Chattanooga-based CBL Properties on Thursday reported lower first quarter earnings on the impact of bankrupties and rent reductions.

But the shopping mall operator said it has plans to spend between $60 million to $90 million over the next several years for the replacement of stores left by the planned liquidation of the Bon-Ton chain.

“We have identified replacement tenants for the majority of our locations and have several in advanced negotiations, including one lease already executed with a supermarket that will require zero investment by CBL,” said Stephen Lebovitz, CBL’s chief executive officer, in a statement.

Funds from operations per diluted share, as adjusted, totaled $72.2 million, or 42 cents in the first quarter, down from $88.4 million, or 52 cents a year ago. The company results, which were reported after the stock market’s close, met analysts’ expectations for the quarter.

CBL, which operates Hamilton Place and Northgate malls in Chattanooga, reported a net loss in the first quarter of 6 cents per share, down from a gain of 13 cents a year ago.

Portfolio occupancy was 91.1 percent as of March 31 compared with 92.1 percent last year. Same-center mall occupancy was 89.5 percent as of March 31 versus 90.4 percent a year ago.

Lebovitz said company officials were encouraged by a 4.1 percent increase in retail sales in its portfolio during the first quarter. Also, he said there were reports from a number of brands citing marked improvement in both traffic and sales, which should lead to improved leasing metrics later in the year.

“Operationally, our focus in 2018 is stabilizing revenues as well as diversifying income by adding more dining, entertainment, value and service users,” Lebovitz said.

Last year, a record number of major retailers in the United States filed for bankruptcy, including Toys R Us, The Limited, RadioShack, Rue21 and Vitamin World.

CBL reported that redevelopment activity is underway at eight properties, including five anchor redevelopments.

Also, CBL completed gross asset sales of $12.3 million during the first quarter and in April entered into a binding contract for the sale of a Tier 3 mall for a gross sales price of $18 million.

Lebovitz said that actively managing its balance sheet to maximize liquidity and lengthen maturities is a top priority for CBL.

The company maintained its guidance for the year with FFO coming in the range of $1.70 to $1.80 per diluted share.

CBL shares closed on the New York Stock Exchange on Thursday at $4.07, up 18 cents, or 4.63 percent.