CBL operating results ahead of last year although net income drops due to disposition activity

submitted by CBL
submitted by CBL

CBL & Associates Properties, Inc. boosted its funds from operations in the first quarter by 8 percent as same store net operating income in the first three months rose 2.8 percent.

FFO per diluted share, as adjusted, increased to 56 cents per share in the quarter - up from 52 cents per share a year ago and 2 cents per share better than what analysts had forecast.

The Chattanooga-based shopping center company said it has completed $359 million in disposition activity, including $190 million held by CBL, so far this year. Those transactions generated net equity proceeds to CBL of nearly $100 million and removed over $90 million of secured debt from its balance sheet.

"During the first quarter, we generated excellent results across all areas of our business," CBL CEO Stephen Lebovitz said in announcing the company's first quarter results. "While renewal lease spreads moderated as anticipated, retailer demand remained strong resulting in double-digit increases for new leases."

Same-center sales increased 2.4 percent to $378 per square foot for the rolling 12-months ended March 31, 2016 over the prior-period. Same-center mall occupancy increased to 91 percent as of March 31

Lebovitz said CBL will continue to sell under-performing properties to pay down debt and improve margins, "but we are also investing in our future growth through ongoing redevelopments and strategic new developments, including a new outlet center project that we'll be announcing soon. We look forward to continuing this positive momentum in our performance throughout the year."

Net income attributable to common shareholders for the first quarter of 2016 was $28.9 million, or 17 cents per share, down from $34.9 million, or 20 cents per share for the first quarter 2015. The decline in net income is primarily a result of the write-down of the book value to estimated fair value of properties sold or classified as non-core in the first quarter, Lebovitz said.

The company on Wednesday reiterated its earnings outlook for 2016, projecting its funds from operations, as adjusted will be in the range of $2.32 to $2.38 per share for all of 2016. CBL anticipates achieving same-center net operating income growth in the range of 0.5 percnt to 2 percent in 2016.

CBL & Associates is the nation's fourth largest shopping mall real estate investment trust with about 130 retail properties across the United States, including Hamilton Place and Northgate malls in Chattanooga.

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