CBL Properties Makes $179M Purchase of Enclosed Mall Portfolio, as It Sells Other Retail
CBL Properties has been divesting out of open-air centers — but isn't completely giving up on retail. That's exemplified by the Chattanooga, Tennessee-based firm's latest transaction to acquire four enclosed regional malls for $178.9 million.
The assets, purchased from Washington Prime Group, include Mesa Mall in Grand Junction, Colorado; Ashland Town Center in Ashland, Kentucky; Southgate Mall in Missoula, Montana and Paddock Mall in Ocala, Florida. In terms of individual size, the properties span 733,000 square feet, more than 420,000 square feet, roughly 546,000 square feet and about 550,000 square feet, respectively.
CBL, in a statement, referred to these enclosed malls in emerging middle markets as "dominant," touting operating metrics, sales, and occupancy at the properties.
The move comes as CBL has been moving away from other retail assets. Since 2024, the company said it has sold more than $241 million worth of open-air centers, outparcels and non-core malls. This includes recently saying goodbye to The Promenade, a power center in D’Iberville, Mississippi, for $83.1 million. The strategy for CBL is to reallocate the proceeds from sales to what it identifies as "stable and growing assets," hoping to generate strong returns.
“This transaction exemplifies our ability to strategically leverage the attractive valuations of our high-quality open-air and outparcel portfolio to fund investments in market-dominant enclosed malls," Stephen D. Lebovitz, CEO of CBL, said.
"Each of these newly acquired assets enjoys strong market positioning and both near and long-term growth potential. The acquisition is immediately accretive to CBL’s cash flow per share and FFO, and moderately deleveraging to our balance sheet."
Speaking of its balance sheet, CBL announced that it modified an existing $333 million loan with Beal Bank USA to include the acquisition properties, which brings the holdings now to roughly $443 million. The loan's initial maturity has been extended to October 2030, with extension options.
“This financing strengthens our balance sheet by extending our maturities, reducing interest rate risk, and locking in the attractive returns and cash flow generation from the four-mall acquisition," Ben Jaenicke, executive vice president and CFO of CBL, explained.
Of CBL's 89 owned properties in 22 states, 55 of them are higher-end enclosed malls, lifestyle centers or outlet centers. Open-air centers and other assets represent more than 30 of the properties that the company manages.
Source: GlobeSt/ALM