Wednesday, June 29 2022

During by Stephen Lebovitz 12 years as CEO of mall real estate investment fund CBL Properties, he has guided the company through the Great Recession, the decade of recovery that followed, and then a difficult period during the pandemic when CBL had to seek protection from bankruptcy.

That’s why the recent rally in CBL has Lebovitz optimistic. the Headquartered in Chattanooga, Tennessee REIT his father, Carlos B. Lebovitz, launched in 1978, reported solid earnings this month and raised its guidance for the full year as a result. Stephen Lebovitz, who became CEO in 2010, said 2021, when it emerged from a Chapter 11 reorganization, was a landmark year for the company whose name reflects his father’s initials.

“2021 was the healthiest year for our business that we’ve had in 15 to 20 years, and it continues this year,” Lebovitz said during an interview at ICSC 2022 Las Vegas. “There’s really, I think, a narrative shift with the importance of retailers having physical stores as part of an omnichannel strategy. Stores are important, malls are thriving, people are coming back. People want to shop, so that It’s good for us, and that’s good for our business.

Lebovitz said his company’s recovery has been fueled by the strong performance of its retail tenants “really across the board.”

“There’s just been a healthy recovery for all of our mall properties. Our small stores have had very strong sales. We haven’t really had bankruptcies, we haven’t closed stores, percentage rents are up, temporary revenues are up in specialty stores,” he said. . he said she. “We had an increase in expenses, but we were able to control and manage them.”

That performance followed what was probably the most difficult year in CBL’s history, as the pandemic and underperforming malls forced the company to seek bankruptcy protection and prompted the New York Stock Exchange to start procedures to remove the company’s common shares and suspend trading of the shares in November. 2020.

The REIT relisted on the New York Stock Exchange in November 2021 under the symbol CBL. Its common shares traded on the OTC Bulletin Board, also known as “pink sheets,” using the symbol CBLAQ before returning to the New York Stock Exchange.

Even after CBL emerged from bankruptcy, the hangover carried over into this year, when in April the REIT lost control of shopping malls in Cincinnati; Chesapeake, Virginia; and Asheville, North Carolina, which went into receivership.

Lebovitz said the trio of properties “had been in transition for a while.”

“It just takes some time for that to filter through the system with the CMBS loans and servicers,” he said. “We wanted to come out with a stable portfolio, and that means we’re not going to include something that we don’t have a long-term strategy for, [that] we don’t see being a long-term goalkeeper. So the portfolio that we have now is really something that we feel comfortable with.”

CBL’s portfolio now contains 95 properties totaling nearly 60 million square feet in 24 states. It includes 57 enclosed malls, outlet centers and lifestyle retail centers and 30 outdoor centers.

Lebovitz said that CBL plans to continue with its plan to refurbish several of its shopping centers by adding different uses, usually in its surface parking lots. The REIT expects to see even “more diverse types of uses” at its retail properties, he said.

“Actually, we’ve visited a few supermarkets and piqued their interest. So that’s a new element,” he said. “[We] continue to receive mixed use interest, medical related, residential, office, hotels, entertainment. So it’s been really cool to see, just the continued way that it helps us evolve and broaden the mix that we have across properties.”

Lebovitz said he never imagined adding several different types of property uses, like casinos, to CBL properties. “It’s made it more fun because it’s a creative business,” he said.

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