Chattanooga-based CBL boosts quarterly income on higher revenues, occupancy

Chattanooga-based CBL boosts quarterly income on higher revenues, occupancy

July 30th, 2014 by Staff Report in Business Around the Region

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Shopping center developer CBL & Associates Properties Inc. on Tuesday posted flat funds from operations in the second quarter over a year ago, though net income jumped on higher revenue, occupancy and same-store sales.

CBL Chief Executive Officer Stephen Lebovitz said the Chattanooga-based company is making progress in its asset disposition program with one more mall under contract and several others under active negotiations.

"We are committed to the successful execution of our strategy to dispose of non-core properties and reinvest into higher growth assets," Lebovitz said in a statement after the stock market's close.

FFO per share, as adjusted, was 55 cents for the second quarter compared with the same figure for the prior-year period. Analysts estimated FFO at 53 cents in the quarter.

Net income attributable to common shareholders for the quarter was $26.7 million, or 16 cents per share, compared with $500,000 a year ago.

Average gross rent per square foot for stabilized mall leases signed in the second quarter increased 11.7 percent. Also, portfolio occupancy rose to 93.5 percent and same-store sales per square foot climbed 1.1 percent.

CBL, which owns Hamilton Place mall and Northgate Mall in Chattanooga, reaffirmed its guidance of earning $2.22 to $2.26 per share from funds from operations for all of 2014.

Lebovitz said CBL remains on track to meet its outlined goals for the year for same-center net operating income growth and other key operating metrics.

The company's shares, traded on the New York Stock Exchange, closed Tuesday at $19.24, down 17 cents, or 0.88 percent.

CBL's newest outlet mall, The Outlet Shoppes of the Bluegrass between Louisville and Lexington, Ky., opened this week and is 100 percent leased with more than 80 premium brands, CBL said.

Earlier, the company unveiled plans to sell 21 of its shopping malls, about a quarter of its nationwide holdings, in an effort to upgrade its remaining properties and boost the company's income.

Neither Hamilton Place mall nor Northgate is on the list of properties it plans to sell. CBL has divided its mall holdings into three tiers, and the 21 units it has identified for sale are generally the least performing, according to the company.

CBL intends to upgrade the remainder of its portfolio and generate more income from its upper-tier properties, and funds from the sales will be used for redevelopment and expansion opportunities.