We have been preparing for an eventual Sears bankruptcy since 2013, when we purchased two Sears locations and transformed them into dining, retail and entertainment destinations, said Stephen Lebovitz, chief executive officer. The Sears stores in our markets are well-located with excellent visibility, access and infrastructure. As a result, we have been able to attract high quality replacement users and new concepts that had not previously considered a mall environment. Additionally, we are able to pursue a number of non-traditional uses through partnerships. These other developers, be it multi-family, hotel or other use, recognize the immense value of these locations and are coming to us to take advantage of the great real estate thats becoming available.
Yesterday Sears announced anticipated store closures as part of its Chapter 11 bankruptcy filing. CBL stores on the closure list include Hamilton Place in Chattanooga, TN; Jefferson Mall in Louisville, KY; Cross Creek Mall in Fayetteville, NC; Imperial Valley in El Centro, CA (location owned by a third party); Honey Creek Mall in Terre Haute, IN; and Governors Square Mall in Clarksville, TN (property owned in a 50/50 joint venture).
CBL proactively purchased the Sears locations at Hamilton Place, Jefferson Mall and Cross Creek in 2017 and has redevelopment plans in process for all three locations. In anticipation of a bankruptcy or additional closures by Sears, CBL has been actively marketing locations to replacement users. CBL has leases executed, out-for-signature or under negotiation for a majority of the locations leased by Sears in its portfolio. Additionally, CBL is pursuing opportunities to utilize ground leases, outparcel land sales and joint ventures to enhance returns while limiting the required investment and will also use construction loans for select projects to reduce the equity commitment.
Over the last three years, more than 35 redevelopment projects have been completed or are underway in the CBL portfolio, including nearly two dozen anchor store redevelopments, furthering the Companys vision of creating a portfolio of diverse suburban town centers. Current projects include:
- Brookfield Square, Brookfield, WI “ former Sears is being transformed into an entertainment and dining destination with Marcus Theaters, Whirlyball entertainment center, a fitness operator and restaurants. A portion of the site was sold for development of a hotel and conference center.
- Jefferson Mall, Louisville, KY “ Round 1 will open in a former Macys location later this year.
- York Galleria, York, PA “ Earlier this year, Marshalls joined H&M & Golds Gym in the former JCPenney location.
- Eastland Mall, Forsyth, IL “ H&M, Outback and Planet Fitness are opening in the former JCPenney location.
Through these redevelopment efforts as well as dispositions of select assets, CBL has reduced its exposure to Sears and other underperforming anchors significantly. At year-end 2015, CBL had 53 Sears operating in its portfolio. With the planned closures announced yesterday, by year-end 2018 CBL anticipates 21 operating Sears stores in its core portfolio, including five locations leased by Sears and 16 owned by Sears or third parties.
About CBL Properties
Headquartered in Chattanooga, TN, CBL Properties owns and manages a national portfolio of market-dominant properties located in dynamic and growing communities. CBLs portfolio is comprised of 114 properties totaling 71.9 million square feet across 26 states, including 73 high-quality enclosed, outlet and open-air retail centers and 12 properties managed for third parties. CBL continuously strengthens its company and portfolio through active management, aggressive leasing and profitable reinvestment in its properties. For more information visit cblproperties.com.
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 Companys various filings with the Securities and Exchange Commission, including without limitation the Companys Annual Report on Form 10-K and the “Managements Discussion and Analysis of Financial Condition and Results of Operations” included therein, for a discussion of such risks and uncertainties.
Katie Reinsmidt, 423-490-8301
Vice President & Chief Investment Officer
Stacey Keating, 423-490-8361
Director of Public
Relations & Corporate Communications