CBL & Associates Properties, Inc. Announces Future Redevelopment Plans for JCPenney Locations
16 January 2014 - 8:37AM
Business Wire
CBL & Associates Properties, Inc. (NYSE:CBL) announced
future redevelopment/replacement plans for JCPenney anchor
locations in the CBL portfolio that are expected to close in
2014.
“One of our most attractive investments coming out of the
recession has been to improve the performance of our properties
through redeveloping underperforming anchor locations. The
opportunities created by the four JCPenney closures announced today
fit perfectly with that objective,” said Stephen Lebovitz,
president & CEO. “While we have been encouraged by JCPenney’s
recent improvements in sales and traffic, we have been anticipating
certain store closures to occur. As we said in our most recent
earnings call, we have been proactively engaging in discussions and
gauging retail demand with this in mind and are pleased to announce
strong interest for the locations expected to close in 2014. Our
next steps will be to move forward with negotiations with retailers
and finalize redevelopment plans. Once leases are signed, we will
share specific retail names joining each mall, as well as
construction and opening timelines. The list of retailers
interested in these specific locations includes sporting goods,
arts and crafts and other box retailers, as well as a traditional
department store for one location, all of which will enhance the
performance of the malls overall.”
JCPenney announced its intention to close four locations in the
CBL portfolio at Hickory Point Mall in Forsyth, IL, Janesville Mall
in Janesville, WI, Wausau Center in Wausau, WI, and Northgate Mall
in Chattanooga, TN. CBL anticipates store closures to occur in the
second quarter. Three locations are leased from CBL. The Northgate
Mall store is leased from a third party and CBL will work with the
building owner to facilitate its redevelopment. The stores
aggregate approximately 499,000 square feet and $1.4 million in
gross annual rent. JCPenney will continue to pay rent until lease
expiration.
Lebovitz added, “As part of our review process, we analyzed the
co-tenancy provisions in small shops leases at these properties and
determined that the financial exposure is immaterial. The
significant and diverse retail demand for each location
demonstrates the strength and resilience of our dominant mall
properties. We look forward to the improved growth rates generated
from these enhancements.”
Over the past three years, CBL has added or redeveloped more
than 75 anchor and junior anchor locations to its portfolio
comprising more than 2.2 million square feet. Today, other than
locations under redevelopment, CBL has no vacant anchor locations
in its core portfolio. The JCPenney stores that are closing are all
prominently located in their malls with convenient parking and
prime visibility, which will facilitate their repurposing. Based on
CBL’s extensive track record of successful anchor redevelopment,
similar projects have generally required 12-24 months to complete
and an investment of $5–10 million generating initial unleveraged
returns in the range of 7-10%. More specific cost and return
information regarding the four locations will be announced as plans
are finalized.
About CBL & Associates Properties, Inc.
CBL is one of the largest and most active owners and developers
of malls and shopping centers in the United States. CBL owns, holds
interests in or manages 150 properties, including 88 regional
malls/open-air centers. The properties are located in 29 states and
total 84.4 million square feet including 4.4 million square feet of
non-owned shopping centers managed for third parties. Headquartered
in Chattanooga, TN, CBL has regional offices in Boston (Waltham),
MA, Dallas (Irving), TX, and St. Louis, MO. Additional information
can be found at cblproperties.com.
Forward-Looking Statements
Information included herein contains "forward-looking
statements" within the meaning of the federal securities laws. Such
statements are inherently subject to risks and uncertainties, many
of which cannot be predicted with accuracy and some of which might
not even be anticipated. Future events and actual events, financial
and otherwise, may differ materially from the events and results
discussed in the forward-looking statements. The reader is directed
to the Company's various filings with the Securities and Exchange
Commission, including without limitation the Company's Annual
Report on Form 10-K and the "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included therein,
for a discussion of such risks and uncertainties.
CBL & Associates Properties, Inc.Katie Reinsmidt,
423-490-8301Senior Vice President - Investor Relations and
Corporate Investmentskatie_reinsmidt@cblproperties.com
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