Stephen Lebovitz, president and CEO of CBL & Associates Properties, Inc. (NYSE: CBL), joined REIT.com for a CEO Spotlight video interview at REITWorld 2015: NAREIT’s Annual Convention for All Things REIT at the Wynn Las Vegas.
Lebovitz stated that tenant bankruptcies were definitely a setback at the start of the year, as CBL lost about 175 stores or 750,000 square feet. However, the bankruptcies of tenants such as RadioShack have given CBL the chance to bring in more productive retailers, Lebovitz said. Through the third quarter of 2015, CBL had leased two-thirds of the vacancies. Lebovitz said the bankruptcies were useful in that they provided clarity.
“We see it as an opportunity going forward,” he added.
Lebovitz also commented on CBL’s decision to push back the timetable for disposing of some of its assets. He explained that the disposal program was announced about a year and a half ago, and progress has been slower than the company had hoped. The market has also changed, according to Lebovitz. Financing has become more difficult, and CBL felt it was giving potential buyers an advantage in the negotiations by having a time limit, Lebovitz said.
Lebovitz stressed that CBL is still pursuing the same strategy of selling lower-tier assets, but the firm is not setting a time frame to do so. “Strategically, it’s the right thing for CBL,” he said.
Meanwhile, Lebovitz pointed out that redevelopment has been a “great source of growth for the past couple of years.” For example, CBL bought two box store sites from Sears and redeveloped them, adding stores like American Girl, H&M and The Cheesecake Factory. Lebovitz said the redevelopment boosted productivity, traffic and sales at those malls, and CBL plans to continue the strategy at other recaptured Sears, JCPenney and Macy’s stores.
Lebovitz said the ability to recapture anchor space and expand into parking lots is particularly important for attracting new retailers as CBL properties are approximately 95 percent leased.