Second quarter earnings are lower than expected
CBL Properties on Wednesday reported second quarter results with lower adjusted funds from operations compared to the same period in 2022.
The Chattanooga-based shopping center company posted adjusted funds from operation of $1.56 per share in the three months ended June 30 compared to adjusted funds from operation a year ago of $1.88 per share. CBL said current second quarter adjusted funds from operations was in line with projections.
The operator of Hamilton Place and Northgate malls in Chattanooga reported after the market’s close that more than 875,000 square feet of leases were executed in the second quarter, including comparable leases of approximately 411,000 square feet signed at 9.1% higher average rents versus the prior leases.
Portfolio occupancy increased to 89.7% as of June 30 compared with 89.5% a year ago, according to CBL. Same-center occupancy for malls, lifestyle centers and outlet centers was 88.5% as of June 30, up from 88% a year ago, the company said.
Same-center net operating income declined 0.8% during the second quarter of 2023 as compared with the prior-year quarter, CBL reported.
Stephen D. Lebovitz, CBL’s chief executive officer, said in a statement that strong leasing was the highlight of the quarter.
“Leasing metrics were the strongest in several years, with healthy positive new and renewal lease spreads and year-overyear occupancy growth, providing solid evidence of the constructive environment,” he said. “We intend to take advantage of the more favorable supply/ demand dynamic in our leasing negotiations going forward.”
Leasing-led revenue gains were offset by an expected reduction in percentage rent, Lebovitz said.
“We successfully managed inflationary pressure on costs, generating a modest reduction in operating expense for the quarter on a same-center basis,” he said.
CBL’s board declared a regular cash dividend for the second quarter of 37.5 cents per share, representing an annualized dividend of $1.50 per share.
CBL increased guidance for the low end of its 2023 funds from operation, as adjusted, per share to a range of $6 to $6.47.
The company’s stock closed Wednesday at $21.75 per share, down 3 cents, or 0.14%, on the New York Stock Exchange.