Chattanooga-based CBL Properties on Tuesday reported that third-quarter performance of its portfolio of malls and shopping centers was better than expected as it cited healthy traffic and sales growth.
The company, which exited bankruptcy protection on Nov. 1, posted funds from operations as adjusted of 47 cents per diluted share for the third quarter compared to 4 cents per diluted share in the same quarter last year.
The increase over a year ago is principally a result of a 21 cent per diluted share lower net interest expense and an 18 cent per diluted share positive variance in the estimate for uncollectable revenues, rent abatements and write-offs for past-due rents, the company reported.
The company reported that the positive variance in the estimate for uncollectable revenues, abatements and write-offs for past-due rents was primarily a result of the tenant accommodations that were made in the prior-year period due to the impact of the pandemic.
Also, the most-recent quarter benefited from a 6 cent per diluted share positive variance from undeclared preferred dividends accrued in the prior-year period, according to the company that operates Hamilton Place and Northgate malls in Chattanooga among its national portfolio of properties.
The company posted a net loss attributable to common shareholders for the three months ended Sept. 30 of $41.7 million, or a loss of 21 cents per diluted share, compared with net loss of $54.1 million, or a loss of 28 cents per diluted share, a year ago.
Stephen Lebovitz, CBL's chief executive officer, said the organization is energized to execute on its strategy and take advantage of its significantly enhanced balance sheet and free cash flow.
"We have seen an improving operating environment in 2021, and it is the ideal time to focus on new opportunities, including refinancing our high-interest rate secured notes and property-level loans, creating value across our portfolio from available land and new partnerships, and other growth strategies," he said in a statement. "We are primed and ready to bring to life the vision we have for the new CBL."
Following CBL's emergence from bankruptcy, the company had about $260 million available in unrestricted cash and marketable securities, the business reported.
Total portfolio same-center net operating income increased 26.5% for the third quarter ended Sept. 30. Sales for the quarter grew 17% as compared with the same quarter a year ago, according to CBL.
Portfolio occupancy as of Sept. 30 was 88.4% compared with 86.6% as of Sept. 30, 2020. Same-center mall occupancy was 86.3% as of the end of the third quarter versus 85.5% a year ago, the company reported.
Lebovitz said that improvements in the leasing environment, including increasing tenant demand and lower bankruptcy-related store closures, drove healthy occupancy growth as new leases signed year-to-date took occupancy.
"It is worth noting that we achieved our first quarter of year-over-year occupancy growth since the first quarter of 2019," he said. "Lease spreads also improved from prior quarters. Robust sales by retailers are leading to higher levels of percentage rent, one driver of better net operating income results. We have successfully held expenses in check despite inflation pressures."
Lebovitz said the company is redefining what the mall means to communities by combining retail, dining, entertainment and other mixed uses.
"Take a fresh look at CBL. Our new capital structure allows us to pursue opportunities both within our portfolio and externally to create value for stakeholders," he said. "We have a new, highly engaged board that brings fresh perspective. And the CBL management team is more committed than ever to the success and growth of the company."
— Compiled by Mike Pare