CBL posts higher income on better occupancy
Chattanooga-based CBL Properties on Wednesday reported higher first-quarter funds from operations as the shopping center operator posted better occupancy in its portfolio.
Funds from operations (FFO) in the first quarter was $1.86 per share compared to $1.25 per share in the same period a year ago, according to the company that operates Hamilton Place and Northgate malls in Chattanooga. As adjusted, FFO was $1.56 per share in the latest quarter versus $2.05 per share a year ago, CBL reported.
CBL’s net income for the latest quarter was 6 cents per share, up from a net loss of $1.45 cents per share a year ago.
Stephen D. Lebovitz, CBL’s chief executive officer, said in a statement that first quarter operating results demonstrated the company’s operating proficiency as highlighted by an increase in occupancy and positive comparable lease spreads.
“We signed nearly 1.3 million square feet of leases during the quarter, including more than 285,000 square feet of new leases, confirming that tenant demand for our properties remains strong,” he said. “Improved occupancy levels translated into higher rents and improved lease spreads across the portfolio. While sales moderated during the first quarter, levels remain well above 2019, signaling ongoing consumer support for in-person shopping.”
Portfolio occupancy increased to 89.8% as of March 31, compared to 88.3% as of March 31, 2022, CBL reported.
Same-center occupancy for malls, lifestyle centers and outlet centers was 88% at the end of the quarter, an increase from 86.8% in the year-ago period, according to CBL.
Same-center net operating income declined 4.5% in the latest quarter, the company reported. Growth in rents during the quarter was offset by a $1.6 million unfavorable variance in uncollectable revenues, a $1.8 million decline in percentage rents and a $3.6 million increase in operating expenses, CBL reported.
“While there has been an increase in tenant bankruptcy announcements, all were appropriately considered in our original guidance range,” Lebovitz said. “As such, we are reiterating our full-year FFO, as adjusted, and same-center NOI expectations.”
The company CEO said the strength and flexibility of CBL’s balance sheet remains a priority in 2023.
“While the financing market is challenging, we are successfully sourcing attractively priced capital for our properties with more than $305 million in financings closed year-to-date,” he said. “As 2023 progresses, we are focused on improving operating performance and enhancing free cash flow, as well as improving value through disciplined capital allocation.”
CBL’s stock closed at $22.75 per share, down 10 cents, or 0.44%, on the New York Stock Exchange.