How CBL & Associates Properties, Inc. (NYSE:CBL) Fared In Q3 2017?


CBL & Associates Properties, Inc. (NYSE:CBL) issued financial report for the third quarter closed September 30, 2017. Net loss came at $2.3 million versus a net loss of $10.2 million, for the third quarter 2016.

The highlights

CBL & Associates Properties’s revenues for Q3 2017 were impacted by higher than expected retailer bankruptcy activity; lower than projected rent from restructured leases with parties undergoing bankruptcy-related reorganization; lower than expected rent from certain renewed leases; and lower than anticipated contribution from permanent lease-up and temporary leasing of space vacated in bankruptcy.

Stephen Lebovitz, the CEO and President of CBL & Associates Properties, expressed that the third quarter results came below their projections as their revenues were impacted by increased bankruptcies, rent concessions and store closures. The difficult scenario for retailers has put increased pressure on their FFO, NOI and lease spreads as they work diligently to preserve NOI and mitigate the impact.

As a result, it is required to adjust their guidance and outlook for the remainder of the 2017. Despite the challenges, CBL portfolio of market leading properties is resilient as demonstrated by the sequential improvement in stabilization and occupancy in sales during the third quarter.

Lebovitz added that they are executing their plan and successfully replacing underachieving retailers with higher executing tenants and more varied uses. Year-to-date, just 25% of new leasing has been done with traditional apparel retailers as they reinvent their assets into suburban town centers that provide unique shopping, more beverage and food, fitness, beauty and health uses, services and more.

The company has continued to improved its investment grade balance sheet, offering increased flexibility and liquidity to navigate the challenges it is facing. This past quarter, CBL closed the extension of a couple of unsecured term loans at promising terms, issued additional senior unsecured notes worth $225 million and closed two higher-rate secured loans before maturity.

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