Chattanooga-based mall owner CBL cites 'positive trends' from 2022

Staff Photo by Matt Hamilton / Visitors enter Hamilton Place mall in 2021.
Staff Photo by Matt Hamilton / Visitors enter Hamilton Place mall in 2021.

CBL Properties on Tuesday posted what the company called positive trends from operations in the fourth quarter and full-year 2022 after announcing last Thursday it was boosting its quarterly dividend by 50%.

The Chattanooga-based shopping center developer, which operates Hamilton Place and Northgate malls, reported adjusted funds from operations of $67.1 million in the fourth quarter of 2022. That compares with $63.1 million for the Nov. 1 through Dec. 31, 2021, period.

For the year ending Dec. 31, 2022, CBL reported funds from operations, as adjusted, of $243.5 million.

CBL announced Nov. 1, 2021, that it had completed its Chapter 11 bankruptcy reorganization. The company had sought bankruptcy protection in November 2020 amid pandemic lockdowns earlier that year.

"CBL enjoyed a strong and successful 2022 in all respects," Stephen D. Lebovitz, CBL's chief executive officer, said in a statement Tuesday. "We are pleased with our excellent fourth quarter and full-year 2022 operational and financial results."

Lebovitz said company officials were cautious going into 2022 given the macro-economic challenges, including interest rate hikes and inflationary pressure.

"Despite these headwinds, we enjoyed healthy tenant demand and limited store bankruptcies or closings," he said.

According to CBL, portfolio occupancy as of Dec. 31, 2022, was 91%, an increase from 89.3% a year earlier. Same-center occupancy for malls, lifestyle centers and outlet centers was 89.6% as of Dec. 31, 2022, up from 87.9% as of Dec. 31, 2021.

The company reported that fourth-quarter new and renewal comparable space leases were signed at 4.5% lower average rents versus the prior leases. The decline was driven by 10 renewal leases with one tenant, the company said. Excluding those 10 renewal leases, average renewal and total lease spreads were flat, according to CBL.

Same-center tenant sales per square foot for the 12 months ended Dec. 31, 2022, declined 2.6% to $435, compared with $447 for the prior period, the company reported.

Looking ahead, CBL issued guidance of 2023 funds from operations, as adjusted per share, in the range of $5.85 to $6.47. The company forecast 2023 same-center net operating income in the range of $418 million to $440 million.

The company said that guidance assumes positive trends in occupancy and operations are offset by lower percentage rent, an unfavorable variance in the estimate for uncollectable revenues due to lower recoveries, and the net effect of lease spreads. Funds from operations, as adjusted, are also affected by higher interest expense, primarily related to floating rate debt, according to the company.

Last week, CBL's board of directors declared a 50% increase in the regular quarterly dividend rate for the first quarter 2023 to $0.375 per share.

– Compiled by Mike Pare

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