Cbl & Associates Properties Inc 10-Q for FY2024 Q1
Cbl & Associates Properties Inc (CBL)
About this 10-Q
Cbl & Associates Properties Inc filed this 10-Q on May 10, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).
Headline figures
Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $129.12M
- down 5.3% from $136.36M a year earlier
- Net income
- $50K
- down 97.8% from net income of $2.26M a year earlier
- Diluted EPS
- -$0.01
- compared with $0.06 a year earlier
UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
FOR THE QUARTERLY PERIOD ENDED
or
FOR THE TRANSITION PERIOD FROM ____________ TO _______________
COMMISSION FILE NO.
(Exact Name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification Number) |
(Address of principal executive office, including zip code)
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered under Section 12(b) of the Act:
Title of each Class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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No |
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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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No |
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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Yes |
No ☒ |
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
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Yes |
No ☐ |
As of May 3, 2024,
CBL & Associates Properties, Inc.
Table of Contents
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PART I |
1 |
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Item 1. |
1 |
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Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 |
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Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 |
2 |
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3 |
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Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2024 and 2023 |
4 |
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Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 |
5 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
6 |
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Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
20 |
Item 3. |
33 |
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Item 4. |
33 |
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PART II |
34 |
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Item 1. |
34 |
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Item1A. |
34 |
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Item 2. |
34 |
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Item 3. |
34 |
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Item 4. |
34 |
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Item 5. |
34 |
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Item 6. |
35 |
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36 |
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PART I – FINANCIAL INFORMATION
ITEM 1: Condensed Consolidated Financial Statements (Unaudited)
CBL & Associates Properties, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
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March 31, |
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December 31, |
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ASSETS (1) |
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2024 |
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2023 |
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Real estate assets: |
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Land |
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$ |
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$ |
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Buildings and improvements |
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Accumulated depreciation |
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Developments in progress |
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Net investment in real estate assets |
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Cash and cash equivalents |
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Restricted cash |
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Available-for-sale securities - at fair value (amortized cost of $ |
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Receivables: |
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Tenant |
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Other |
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Investments in unconsolidated affiliates |
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In-place leases, net |
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Intangible lease assets and other assets |
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$ |
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$ |
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LIABILITIES AND EQUITY |
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Mortgage and other indebtedness, net |
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$ |
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$ |
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Accounts payable and accrued liabilities |
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Total liabilities (1) |
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Shareholders' equity: |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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Total shareholders' equity |
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Noncontrolling interests |
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( |
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Total equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated statements.
1
CBL & Associates Properties, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
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Three Months Ended March 31, |
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2024 |
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2023 |
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REVENUES: |
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Rental revenues |
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$ |
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$ |
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Management, development and leasing fees |
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Other |
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Total revenues |
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EXPENSES: |
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Property operating |
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Depreciation and amortization |
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( |
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Real estate taxes |
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( |
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Maintenance and repairs |
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( |
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( |
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General and administrative |
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( |
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( |
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Loss on impairment |
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( |
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— |
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Litigation settlement |
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Other |
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— |
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Total expenses |
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OTHER INCOME (EXPENSES): |
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Interest and other income |
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Interest expense |
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Gain on deconsolidation |
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— |
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Gain on sales of real estate assets |
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Income tax benefit |
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Equity in earnings (losses) of unconsolidated affiliates |
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Total other expenses |
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Net (loss) income |
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Net loss (income) attributable to noncontrolling interests in: |
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Operating Partnership |
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— |
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— |
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Other consolidated subsidiaries |
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Net income attributable to the Company |
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Earnings allocable to unvested restricted stock |
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( |
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Net (loss) income attributable to common shareholders |
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$ |
( |
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$ |
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Basic and diluted per share data attributable to common shareholders: |
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Basic earnings per share |
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$ |
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$ |
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Diluted earnings per share |
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Weighted-average basic shares |
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Weighted-average diluted shares |
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The accompanying notes are an integral part of these condensed consolidated statements.
2
CBL & Associates Properties, Inc.
Condensed Consolidated Statements of Comprehensive (Loss) Income
(In thousands, except share data)
(Unaudited)
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Three Months Ended March 31, |
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2024 |
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2023 |
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Net (loss) income |
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$ |
( |
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$ |
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Other comprehensive gain (loss): |
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Unrealized gain on interest rate swap |
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— |
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Unrealized (loss) gain on available-for-sale securities |
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( |
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Comprehensive (loss) income |
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( |
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Comprehensive loss attributable to noncontrolling interests in: |
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Other consolidated subsidiaries |
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Comprehensive income attributable to the Company |
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Earnings allocable to unvested restricted stock |
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( |
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( |
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Comprehensive (loss) income attributable to common shareholders |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these condensed consolidated statements.
3
CBL & Associates Properties, Inc.
Condensed Consolidated Statements of Equity
(In thousands, except share data)
(Unaudited)
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Equity |
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Shareholders' Equity |
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Common |
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Additional |
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Accumulated |
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Accumulated Deficit |
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Total |
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Noncontrolling |
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Total |
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Balance, December 31, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Net income (loss) |
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— |
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— |
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— |
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( |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Dividends declared - common stock |
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— |
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— |
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— |
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( |
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( |
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— |
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( |
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Issuance of |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of |
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— |
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( |
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— |
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— |
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( |
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— |
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( |
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Amortization of deferred compensation |
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— |
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— |
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— |
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— |
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Compensation expense related to performance stock units |
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— |
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— |
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— |
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— |
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Distributions to noncontrolling interests |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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Balance, March 31, 2023 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Equity |
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Shareholders' Equity |
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Common |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Noncontrolling |
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Total |
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Balance, December 31, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Net income (loss) |
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— |
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— |
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— |
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( |
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( |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Dividends declared - common stock |
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— |
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— |
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— |
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( |
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( |
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— |
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( |
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Issuance of |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of |
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— |
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( |
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— |
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— |
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( |
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— |
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( |
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Distributions to noncontrolling interests |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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Amortization of deferred compensation |
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— |
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— |
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— |
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— |
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Compensation expense related to performance stock units |
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— |
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— |
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— |
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— |
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Cancellation of |
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— |
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( |
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— |
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— |
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( |
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— |
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( |
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Repurchases of |
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— |
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( |
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— |
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— |
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( |
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— |
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( |
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Contributions from noncontrolling interests |
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— |
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— |
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— |
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— |
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— |
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Balance, March 31, 2024 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these condensed consolidated statements.
4
CBL & Associates Properties, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
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Three Months Ended March 31, |
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2024 |
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2023 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net (loss) income |
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$ |
( |
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$ |
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Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
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Depreciation and amortization |
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Net amortization of deferred financing costs, discounts on available-for-sale securities and debt discounts |
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Net amortization of intangible lease assets and liabilities |
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Gain on sales of real estate assets |
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( |
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( |
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Gain on deconsolidation |
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— |
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( |
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Write-off of development projects |
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— |
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Share-based compensation expense |
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Loss on impairment |
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— |
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Equity in (earnings) losses of unconsolidated affiliates |
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( |
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Distributions of earnings from unconsolidated affiliates |
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Change in estimate of uncollectable revenues |
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Change in deferred tax accounts |
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Changes in: |
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Tenant and other receivables |
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( |
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Other assets |
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( |
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( |
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Accounts payable and accrued liabilities |
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( |
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( |
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Net cash provided by operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Additions to real estate assets |
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( |
) |
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( |
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Proceeds from sales of real estate assets |
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Purchases of available-for-sale securities |
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( |
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( |
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Redemptions of available-for-sale securities |
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Additional investments in and advances to unconsolidated affiliates |
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( |
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( |
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Distributions in excess of equity in earnings of unconsolidated affiliates |
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Changes in other assets |
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( |
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( |
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Net cash provided by investing activities |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Principal payments on mortgage and other indebtedness |
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( |
) |
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( |
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Repurchases of common stock |
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( |
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— |
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Contributions from noncontrolling interests |
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— |
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Payment of tax withholdings for restricted stock awards and performance stock units |
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( |
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( |
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Distributions to noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
Dividends paid to common shareholders |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
|
|
|
( |
) |
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period |
|
|
|
|
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period |
|
$ |
|
|
$ |
|
||
Reconciliation from consolidated statements of cash flows to consolidated balance sheets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash: |
|
|
|
|
|
|
||
Restricted cash |
|
|
|
|
|
|
||
Mortgage escrows |
|
|
|
|
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
SUPPLEMENTAL INFORMATION |
|
|
|
|
|
|
||
Cash paid for interest, net of amounts capitalized |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated statements.
5
CBL & Associates Properties, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(Dollars in thousands, except per share data)
Note 1 – Organization and Basis of Presentation
CBL & Associates Properties, Inc. (“CBL”), a Delaware corporation, is a self-managed, self-administered, fully integrated real estate investment trust (“REIT”) that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, outlet centers, lifestyle centers, open-air centers, office buildings and other properties, including single-tenant and multi-tenant parcels. Its properties are located in
CBL conducts substantially all its business through CBL & Associates Limited Partnership (the “Operating Partnership”), which is a variable interest entity ("VIE"). The Operating Partnership consolidates the financial statements of all entities in which it has a controlling financial interest or where it is the primary beneficiary of a VIE.
As of March 31, 2024, the Operating Partnership owned interests in the following properties:
|
|
Malls (1) |
|
|
Outlet Centers (1) |
|
|
Lifestyle Centers (1)(2) |
|
|
Open-Air Centers (3) |
|
|
Other (3)(4) |
|
|
Total |
|
||||||
Consolidated Properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unconsolidated Properties (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
CBL is the
As used herein, the term "Company" includes CBL & Associates Properties, Inc. and its subsidiaries, including CBL & Associates Limited Partnership and its subsidiaries, unless the context indicates otherwise. The term "Operating Partnership" refers to CBL & Associates Limited Partnership and its subsidiaries.
The Operating Partnership conducts the Company's property management and development activities through its wholly owned subsidiary, CBL & Associates Management, Inc. (the “Management Company"), to comply with certain requirements of the Internal Revenue Code.
The accompanying condensed consolidated financial statements are unaudited; however, they have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. All intercompany transactions have been eliminated. The results for the interim period ended March 31, 2024 are not necessarily indicative of the results to be obtained for the full fiscal year.
Reclassifications
The Company reclassified above market leases, net, of $
For the three months ended March 31, 2023, the Company reclassified payments received on mortgage and other notes receivable of $
6
Note 2 – Summary of Significant Accounting Policies
Accounting Guidance Adopted
In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform, which provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. Additional optional expedients, exceptions and clarifications were created in ASU 2021-01. The guidance is effective upon issuance and generally can be applied to any contract modifications or existing and new hedging relationships through December 31, 2024. The Company elected the expedients in conjunction with transitioning certain debt instruments to alternative benchmark indexes. Since adoption, there has been no impact on our condensed consolidated financial statements through the use of the expedient.
Accounting Guidance Not Yet Adopted
On November 27, 2023, the FASB issued ASU 2023-07, Segment Reporting, which amends the existing standard's disclosure requirements. Among other things, ASU 2023-07 will require companies to disclose significant segment expenses by reportable segment if they are regularly provided to the Chief Operating Decision Maker ("CODM") and disclosures of the CODM's title and position, as well as details of how the CODM uses the reported measures. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024. The adoption of ASU 2023-07 is not expected to have a material impact on the Company's financial statements.
Accounts Receivable
Receivables include amounts billed and currently due from tenants pursuant to lease agreements and receivables attributable to straight-line rents associated with those lease agreements. Individual leases where the collection of rents is in dispute are assessed for collectability based on management’s best estimate of collection considering the anticipated outcome of the dispute. Individual leases that are not in dispute are assessed for collectability and upon the determination that the collection of rents over the remaining lease term is not probable, accounts receivable are reduced as an adjustment to rental revenues. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability is determined to be probable. Further, management assesses whether operating lease receivables, at a portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical collection levels and current economic trends. An allowance for the uncollectable portion of the portfolio is recorded as an adjustment to rental revenues.
Management’s collection assessment took into consideration the type of retailer, billing disputes, lease negotiation status and executed deferral or abatement agreements, as well as recent rent collection experience and tenant bankruptcies based on the best information available to management at the time of evaluation.
Note 3 – Revenues
Revenues
The following table presents the Company's revenues disaggregated by revenue source for the three months ended March 31, 2024 and 2023:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Rental revenues |
|
$ |
|
|
$ |
|
||
Revenues from contracts with customers: |
|
|
|
|
|
|
||
Operating expense reimbursements |
|
|
|
|
|
|
||
Management, development and leasing fees (1) |
|
|
|
|
|
|
||
Marketing revenues (2) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Other revenues |
|
|
|
|
|
|
||
Total revenues (3) |
|
$ |
|
|
$ |
|
||
See Note 9 for information on the Company's segments.
7
Revenues from Contracts with Customers
Outstanding Performance Obligations
The Company has outstanding performance obligations related to certain noncancelable contracts with customers for which it will receive fixed operating expense reimbursements for providing certain maintenance and other services as described above.
Performance obligation |
|
Less than |
|
|
|
|
|
Over |
|
|
Total |
|
||||
Fixed operating expense reimbursements |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company evaluates its performance obligations each period and makes adjustments to reflect any known additions or cancellations. Performance obligations related to variable consideration, which is based on sales, are constrained.
Note 4 – Leases
The components of rental revenues for the three months ended March 31, 2024 and 2023 are as follows:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Fixed lease payments |
|
$ |
|
|
$ |
|
||
Variable lease payments |
|
|
|
|
|
|
||
Total rental revenues |
|
$ |
|
|
$ |
|
||
The undiscounted future fixed lease payments to be received under the Company's operating leases as of March 31, 2024, are as follows:
Years Ending December 31, |
|
Operating Leases |
|
|
2024 (1) |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total undiscounted lease payments |
|
$ |
|
|
Note 5 – Fair Value Measurements
The Company has categorized its financial assets and financial liabilities that are recorded at fair value into a hierarchy in accordance with Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosure, ("ASC 820") based on whether the inputs to valuation techniques are observable or unobservable. The fair value hierarchy contains three levels of inputs that may be used to measure fair value as follows:
Level 1 – |
Inputs represent quoted prices in active markets for identical assets and liabilities as of the measurement date. |
Level 2 – |
Inputs, other than those included in Level 1, represent observable measurements for similar instruments in active markets, or identical or similar instruments in markets that are not active, and observable measurements or market data for instruments with substantially the full term of the asset or liability. |
Level 3 – |
Inputs represent unobservable measurements, supported by little, if any, market activity, and require considerable assumptions that are significant to the fair value of the asset or liability. Market valuations must often be determined using discounted cash flow methodologies, pricing models or similar techniques based on the Company’s assumptions and best judgment. |
8
The asset or liability's fair value within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Under ASC 820, fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability in an orderly transaction at the measurement date and under current market conditions. Valuation techniques used maximize the use of observable inputs and minimize the use of unobservable inputs and consider assumptions such as inherent risk, transfer restrictions and risk of nonperformance.
The carrying values of cash and cash equivalents, receivables, accounts payable and accrued liabilities are reasonable estimates of their fair values because of the short-term nature of these financial instruments. The estimated fair value of mortgage and other indebtedness was $
Fair Value Measurements on a Recurring Basis
The following table sets forth information regarding the Company's interest rate swap that was designated as a cash flow hedge of interest rate risk for the three months ended March 31, 2024. See Note 8 for more information.
|
|
|
|
|
Fair Value Measurements at Reporting Date Using |
|
||||||||||
Asset |
|
Fair Value at March 31, 2024 |
|
|
Quoted Prices in |
|
|
Significant |
|
|
Significant |
|
||||
Interest rate swap |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
During the three months ended March 31, 2024, the Company has continued to reinvest the cash from maturing U.S. Treasury securities into new U.S. Treasury securities. The Company designated the U.S. Treasury securities as available-for-sale (“AFS”).
U.S. Treasury securities |
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
Amortized cost (1) |
|
$ |
|
|
$ |
|
||
Allowance for credit losses (2) |
|
|
— |
|
|
|
— |
|
Total unrealized (loss) gain |
|
|
( |
) |
|
|
|
|
Fair value (3) |
|
$ |
|
|
$ |
|
||
Fair Value Measurements on a Nonrecurring Basis
The Company measures the fair value of certain long-lived assets on a nonrecurring basis, through quarterly impairment testing or when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company’s evaluation of the recoverability of long-lived assets involves the comparison of undiscounted future cash flows expected to be generated by each property over the Company’s expected remaining holding period to the respective carrying amount. The determination of whether the carrying value is recoverable also requires management to make estimates related to probability weighted scenarios impacting undiscounted cash flow models. The Company considers both quantitative and qualitative factors in its impairment analysis of long-lived assets. Significant quantitative factors include historical and forecasted information for each property such as net operating income, occupancy statistics and sales levels. Significant qualitative factors used include market conditions, age and condition of the property and tenant mix. The quantitative and qualitative factors impact the selection of the terminal capitalization rate which is used in both an undiscounted and discounted cash flow model and the discount rate used in a discounted cash flow model. Due to the significant unobservable estimates and assumptions used in the valuation of long-lived assets that experience impairment, the Company classifies such long-lived assets under Level 3 in the fair value hierarchy. Level 3 inputs primarily consist of sales and market data, independent valuations and discounted cash flow models.
9
Long-lived Assets Measured at Fair Value in 2024
During the three months ended March 31, 2024, the Company sold an outparcel for less than its carrying value and recorded impairment of $
Long-lived Assets Measured at Fair Value in 2023
During the three months ended March 31, 2023, the Company recognized gain on deconsolidation of $
Note 6 – Dispositions and Held for Sale
Dispositions
Based on its analysis, the Company determined that the dispositions described below do not meet the criteria for classification as discontinued operations and are not considered to be significant disposals based on its quantitative and qualitative evaluation. Thus, the results of operations of the properties described below, as well as any related gains or losses, are included in net income (loss) for all periods presented, as applicable.
2024 Dispositions
During the three months ended March 31, 2024, the Company realized a gain of $
2023 Dispositions
During the three months ended March 31, 2023, the Company realized a gain of $
Held for Sale
As of March 31, 2024 and 2023, there were
Note 7 – Unconsolidated Affiliates and Noncontrolling Interests
Unconsolidated Affiliates
Although the Company had majority ownership of certain joint ventures during 2024 and 2023, it evaluated the investments and concluded that the other partners or owners in these joint ventures had substantive participating rights, such as approvals of:
As a result of the joint control over these joint ventures, the Company accounts for these investments using the equity method of accounting.
At March 31, 2024, the Company had investments in
10
2023 Activity - Unconsolidated Affiliates
Alamance Crossing CMBS, LLC
In February 2023, the Company deconsolidated Alamance Crossing East as a result of the Company losing control when the property was placed in receivership. As of March 31, 2024, the loan secured by Alamance Crossing East had an outstanding balance of $
Condensed Combined Financial Statements - Unconsolidated Affiliates
Condensed combined financial statement information of the unconsolidated affiliates is as follows:
|
|
March 31, |
|
|
December 31, |
|
||
ASSETS: |
|
|
|
|
|
|
||
Investment in real estate assets |
|
$ |
|
|
$ |
|
||
Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Developments in progress |
|
|
|
|
|
|
||
Net investment in real estate assets |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
LIABILITIES: |
|
|
|
|
|
|
||
Mortgage and other indebtedness, net |
|
$ |
|
|
$ |
|
||
Other liabilities |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
OWNERS' EQUITY (DEFICIT): |
|
|
|
|
|
|
||
The Company |
|
|
|
|
|
|
||
Other investors |
|
|
( |
) |
|
|
( |
) |
Total owners' deficit |
|
|
( |
) |
|
|
( |
) |
Total liabilities and owners’ deficit |
|
$ |
|
|
$ |
|
||
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Total revenues |
|
$ |
|
|
$ |
|
||
Net income (1) |
|
$ |
|
|
$ |
|
||
Variable Interest Entities
The Operating Partnership and certain of its subsidiaries are VIEs primarily because the limited partners of these entities do not collectively possess substantive kick-out or participating rights.
The Company consolidates the Operating Partnership because it is the primary beneficiary. The Company, through the Operating Partnership, consolidates all VIEs for which it is the primary beneficiary. Generally, a VIE is a legal entity in which the equity investors do not have the characteristics of a controlling financial interest or the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A limited partnership is considered a VIE when the majority of the limited partners unrelated to the general partner possess neither the right to remove the general partner without cause, nor certain rights to participate in the decisions that most significantly affect the financial results of the partnership. In determining whether the Company is the primary beneficiary of a VIE, the Company considers qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of the Company's investment; the obligation or likelihood for the Company or other investors to provide financial support; and the similarity with and significance to the Company's business activities and the business activities of the other investors.
Consolidated VIEs
As of March 31, 2024, the Company had investments in 10 consolidated VIEs with ownership interests ranging from
11
Unconsolidated VIEs
The table below lists the Company's unconsolidated VIEs as of March 31, 2024:
Unconsolidated VIEs: |
|
Investment in |
|
|
Maximum |
|
||
Alamance Crossing CMBS, LLC (1) |
|
$ |
— |
|
|
$ |
— |
|
Ambassador Infrastructure, LLC (2) |
|
|
— |
|
|
|
|
|
Atlanta Outlet JV, LLC |
|
|
— |
|
|
|
— |
|
BI Development, LLC |
|
|
|
|
|
|
||
BI Development II, LLC |
|
|
|
|
|
|
||
CBL-T/C, LLC |
|
|
— |
|
|
|
— |
|
CBL-TRS Med OFC Holding, LLC (3) |
|
|
|
|
|
|
||
El Paso Outlet Center Holding, LLC |
|
|
— |
|
|
|
— |
|
Fremaux Town Center JV, LLC |
|
|
— |
|
|
|
— |
|
Louisville Outlet Shoppes, LLC |
|
|
— |
|
|
|
— |
|
Mall of South Carolina L.P. |
|
|
— |
|
|
|
— |
|
Vision - CBL Hamilton Place, LLC |
|
|
|
|
|
|
||
Vision - CBL Mayfaire TC Hotel, LLC |
|
|
|
|
|
|
||
Westgate Mall CMBS, LLC (1) |
|
|
— |
|
|
|
— |
|
|
|
$ |
|
|
$ |
|
||
Note 8 – Mortgage and Other Indebtedness, Net
CBL has no indebtedness. Either the Operating Partnership or one of its consolidated subsidiaries that it has a direct or indirect ownership interest in are the borrowers on all the Company's debt. At March 31, 2024, all the Company's consolidated debt is non-recourse.
The Company’s mortgage and other indebtedness, net, consisted of the following:
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||||||||||
|
|
Amount |
|
|
Weighted- |
|
|
Amount |
|
|
Weighted- |
|
||||
Fixed-rate debt: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Open-air centers and outparcels loan (2) |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Loans on operating properties |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total fixed-rate debt |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Variable-rate debt: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Secured term loan |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Open-air centers and outparcels loan (2) |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Loans on operating properties |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Recourse loan on an operating property |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
% |
||
Total variable-rate debt |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total fixed-rate and variable-rate debt |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Unamortized deferred financing costs |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Debt discounts (3) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Total mortgage and other indebtedness, net |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
12
Non-recourse loans on operating properties, the open-air centers and outparcels loan and the secured term loan include loans that are secured by properties owned by the Company that have a carrying value of $
2024 Loan Activity
In February 2024, the Company redeemed U.S. Treasury securities and used the proceeds to pay off the $
Scheduled Principal Payments
As of March 31, 2024, the scheduled principal amortization and balloon payments of the Company’s consolidated debt, excluding extensions available at the Company’s option, on all mortgage and other indebtedness, are as follows:
2024 (1) |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total mortgage and other indebtedness |
|
$ |
|
Of the $
Interest Rate Hedge Instruments
The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that its counterparty will fail to meet their obligation.
The Company records its derivative instruments in its condensed consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the derivative has been designated as a hedge and, if so, whether the hedge has met the criteria necessary to apply hedge accounting.
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
The effective portion of changes in the fair value of derivatives designated as, and that qualify as, cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Such derivatives were used to hedge the variable cash flows associated with variable-rate debt.
Instrument Type |
|
Location in the Condensed Consolidated Balance Sheet |
|
Notional |
|
|
Index |
|
Fair Value at March 31, 2024 |
|
|
Maturity Date |
||
Pay fixed/Receive variable swap |
|
Intangible lease assets and other assets |
|
$ |
|
|
1-month USD-SOFR CME |
|
$ |
|
|
|||
13
|
|
Gain Recognized in Other Comprehensive (Loss) Income |
|
|
|
|
Gain Recognized in Earnings |
|
||||||||||
|
|
Three Months Ended March 31, |
|
|
|
|
Three Months Ended March 31, |
|
||||||||||
Hedging Instrument |
|
2024 |
|
|
2023 |
|
|
Location of Gain Reclassified from Accumulated Other Comprehensive Income (Loss) into Earnings |
|
2024 |
|
|
2023 |
|
||||
Interest rate swap |
|
$ |
|
|
$ |
— |
|
|
Interest Expense |
|
$ |
|
|
$ |
— |
|
||
Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that $
The Company has an agreement with each derivative counterparty that contains a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.
As of March 31, 2024, the Company did
Note 9 – Segment Information
The Company measures performance and allocates resources according to property type, which is determined based on certain criteria such as type of tenants, capital requirements, economic risks, leasing terms, and short and long-term returns on capital. Rental income and tenant reimbursements from tenant leases provide the majority of revenues from all segments.
14
Information on the Company’s segments is as follows:
Three Months Ended March 31, 2024 |
|
Malls (1) |
|
|
All |
|
|
Total |
|
|||
Revenues (3) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Property operating expenses (4) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Gain on sales of real estate assets |
|
|
— |
|
|
|
|
|
|
|
||
Segment profit (loss) |
|
$ |
|
|
$ |
( |
) |
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
|
|
( |
) |
||
General and administrative expense |
|
|
|
|
|
|
|
|
( |
) |
||
Litigation settlement |
|
|
|
|
|
|
|
|
|
|||
Interest and other income |
|
|
|
|
|
|
|
|
|
|||
Loss on impairment |
|
|
|
|
|
|
|
|
( |
) |
||
Income tax benefit |
|
|
|
|
|
|
|
|
|
|||
Equity in earnings of unconsolidated affiliates |
|
|
|
|
|
|
|
|
|
|||
Net loss |
|
|
|
|
|
|
|
$ |
( |
) |
||
Capital expenditures (5) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Three Months Ended March 31, 2023 |
|
Malls (1) |
|
|
All |
|
|
Total |
|
|||
Revenues (3) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Property operating expenses (4) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Gain on sales of real estate assets |
|
|
— |
|
|
|
|
|
|
|
||
Other expense |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Segment profit (loss) |
|
$ |
|
|
$ |
( |
) |
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
|
|
( |
) |
||
General and administrative expense |
|
|
|
|
|
|
|
|
( |
) |
||
Litigation settlement |
|
|
|
|
|
|
|
|
|
|||
Interest and other income |
|
|
|
|
|
|
|
|
|
|||
Gain on deconsolidation |
|
|
|
|
|
|
|
|
|
|||
Income tax benefit |
|
|
|
|
|
|
|
|
|
|||
Equity in losses of unconsolidated affiliates |
|
|
|
|
|
|
|
|
( |
) |
||
Net income |
|
|
|
|
|
|
|
$ |
|
|||
Capital expenditures (5) |
|
|
|
|
|
|
|
|
|
|||
Total assets |
|
Malls (1) |
|
|
All |
|
|
Total |
|
|||
March 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
December 31, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Earnings per share ("EPS") is calculated under the two-class method. Under the two-class method, all earnings (distributed and undistributed) are allocated to common stock and participating securities. The Company grants restricted stock awards to certain employees under its share-based compensation program, which entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested restricted stock awards meet the definition of participating securities based on their respective rights to receive nonforfeitable dividends.
Diluted EPS incorporates the potential impact of contingently issuable shares. Diluted EPS is calculated under both the two-class and treasury stock methods, and the more dilutive amount is reported. Performance stock units ("PSUs") and unvested restricted stock awards are contingently issuable common shares and are included in diluted EPS if the effect is dilutive.
15
The following table presents the calculation of basic and diluted EPS (in thousands, except per share amounts):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Basic earnings per share |
|
|
|
|
|
|
||
Net income attributable to the Company |
|
$ |
|
|
$ |
|
||
Less: Earnings allocable to unvested restricted stock |
|
|
( |
) |
|
|
( |
) |
Net (loss) income attributable to common shareholders |
|
|
( |
) |
|
|
|
|
Weighted-average basic shares outstanding |
|
|
|
|
|
|
||
Net (loss) income per share attributable to common shareholders |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
||
Diluted earnings per share (1) |
|
|
|
|
|
|
||
Net (loss) income attributable to common shareholders |
|
$ |
( |
) |
|
$ |
|
|
Weighted-average diluted shares outstanding |
|
|
|
|
|
|
||
Net (loss) income per share attributable to common shareholders |
|
$ |
( |
) |
|
$ |
|
|
Note 11 – Contingencies
The Company is currently involved in litigation that arises in the ordinary course of business, most of which is expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, the Company discloses the nature and estimate of the possible loss of the litigation. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of the Company.
Environmental Contingencies
The Company evaluates potential loss contingencies related to environmental matters using the same criteria described above related to litigation matters. Based on current information, an unfavorable outcome concerning such environmental matters, both individually and in the aggregate, is considered to be reasonably possible. However, the Company believes its maximum potential exposure to loss would not be material to its results of operations or financial condition. The Company has a master insurance policy that provides coverage through 2027 for certain environmental claims up to $
Guarantees
The Operating Partnership may guarantee the debt of a joint venture primarily because it allows the joint venture to obtain funding at a lower cost than could be obtained otherwise. This results in a higher return for the joint venture on its investment, and a higher return on the Operating Partnership's investment in the joint venture. The Operating Partnership may receive a fee from the joint venture for providing the guaranty. Additionally, when the Operating Partnership issues a guaranty, the terms of the joint venture agreement typically provide that the Operating Partnership may receive indemnification from the joint venture partner or have the ability to increase its ownership interest. The guarantees expire upon repayment of the debt, unless noted otherwise.
16
The following table represents the Operating Partnership's guarantees of unconsolidated affiliates' debt as reflected in the accompanying condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023:
|
|
As of March 31, 2024 |
|
Obligation |
|
|||||||||||||||||
Unconsolidated Affiliate |
|
Company's |
|
Outstanding |
|
|
Percentage |
|
Maximum |
|
|
Debt |
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||||
West Melbourne I, LLC - Phase I |
|
|
$ |
|
|
|
$ |
|
|
Feb-2025 |
(2) |
$ |
|
|
$ |
|
||||||
West Melbourne I, LLC - Phase II |
|
|
|
|
|
|
|
|
|
Feb-2025 |
(2) |
|
|
|
|
|
||||||
Port Orange I, LLC |
|
|
|
|
|
|
|
|
|
Feb-2025 |
(2) |
|
|
|
|
|
||||||
Ambassador Infrastructure, LLC |
|
|
|
|
|
|
|
|
|
Mar-2025 |
|
|
|
|
|
|
||||||
CBL-TRS Med OFC Holding, LLC (3) |
|
|
|
|
|
|
|
|
|
Jun-2030 |
|
|
|
|
|
|
||||||
Total guaranty liability |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
For the three months ended March 31, 2024 and 2023, the Company evaluated each guaranty, listed in the table above, by evaluating the debt service ratio, cash flow forecasts and the performance of each loan, where applicable. The result of the analysis was that each loan is current and performing. The Company did not record a credit loss related to the guarantees listed in the table above for the three months ended March 31, 2024 and 2023.
Restricted Stock Awards
Compensation expense is recognized on a straight-line basis over the requisite service period. The share-based compensation expense related to restricted stock awards granted under the CBL & Associates Properties, Inc. 2021 Equity Incentive Plan ("EIP") was $
A summary of the status of the Company’s nonvested restricted stock awards as of March 31, 2024, and changes during the three months ended March 31, 2024, are presented below:
|
|
Shares |
|
|
Weighted- |
|
||
Nonvested at January 1, 2024 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Vested |
|
|
( |
) |
|
$ |
|
|
Nonvested at March 31, 2024 |
|
|
|
|
$ |
|
||
The total grant-date fair value of restricted stock awards granted during the three months ended March 31, 2024 was $
17
Performance Stock Unit Awards
Compensation cost for the PSUs granted in February 2023 is recognized on a straight-line basis over the service period since it is longer than the performance period. The resulting expense is recorded regardless of whether any PSU awards are earned as long as the required service period is met. For the PSUs granted in February 2022, each quarter, management assesses the probability that the measures associated with the Company's outstanding PSU awards will be attained. The Company begins recognizing compensation expense on a straight-line basis over the remaining service period once the PSU award measures are deemed probable of achievement. Share-based compensation expense related to the PSUs granted under the EIP was $
A summary of the status of the Company’s outstanding PSU awards as of March 31, 2024, and changes during the three months ended March 31, 2024, are presented below:
|
|
PSUs |
|
|
Weighted- |
|
||
Outstanding at January 1, 2024 |
|
|
|
|
$ |
|
||
2024 PSUs granted |
|
|
|
|
$ |
|
||
Incremental PSUs granted (1) |
|
|
|
|
$ |
|
||
Outstanding at March 31, 2024 |
|
|
|
|
$ |
|
||
The total grant-date fair value of PSU awards granted during the three months ended March 31, 2024 was $
The following table summarizes the assumptions used in the Monte Carlo simulation pricing model related to the PSUs granted in 2024:
|
|
2024 PSUs |
|
|
Grant date |
|
February 7, 2024 |
|
|
Fair value per share on valuation date (1) |
|
$ |
|
|
Risk-free interest rate (2) |
|
|
% |
|
Expected share price volatility (3) |
|
|
% |
|
Note 13 – Noncash Investing and Financing Activities
The Company’s noncash investing and financing activities were as follows:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Additions to real estate assets accrued but not yet paid |
|
$ |
|
|
$ |
|
||
Deconsolidation upon loss of control (1): |
|
|
|
|
|
|
||
Decrease in real estate assets |
|
|
— |
|
|
|
( |
) |
Decrease in mortgage and other indebtedness |
|
|
— |
|
|
|
|
|
Decrease in operating assets and liabilities |
|
|
— |
|
|
|
|
|
Decrease in intangible lease and other assets |
|
|
— |
|
|
|
( |
) |
18
Note 14 – Subsequent Events
In April 2024, the Company repurchased
In April 2024, the Company redeemed $
In May 2024, the Company exercised the first
19
ITEM 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and accompanying notes that are included in this Form 10-Q. Capitalized terms used, but not defined, in this Management’s Discussion and Analysis of Financial Condition and Results of Operations have the same meanings as defined in the notes to the condensed consolidated financial statements. Unless stated otherwise or the context otherwise requires, references to the “Company,” “we,” “us” and “our” mean CBL & Associates Properties, Inc. and its subsidiaries.
Certain statements made in this section or elsewhere in this report may be deemed “forward-looking statements” within the meaning of the federal securities laws. All statements other than statements of historical fact should be considered to be forward-looking statements. In many cases, these forward-looking statements may be identified by the use of words such as “will,” “may,” “should,” “could,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “projects,” “goals,” “objectives,” “targets,” “predicts,” “plans,” “seeks,” and variations of these words and similar expressions. Any forward-looking statement speaks only as of the date on which it is made and is qualified in its entirety by reference to the factors discussed throughout this report.
Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, forward-looking statements are not guarantees of future performance or results and we can give no assurance that these expectations will be attained. It is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of known and unknown risks and uncertainties. In addition to the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, such known risks and uncertainties include, without limitation:
This list of risks and uncertainties is only a summary and is not intended to be exhaustive. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.
20
Executive Overview
We are a self-managed, self-administered, fully integrated REIT that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, outlet centers, lifestyle centers, open-air centers and other properties. See Note 1 to the condensed consolidated financial statements for information on our property interests as of March 31, 2024. We have elected to be taxed as a REIT for federal income tax purposes.
The following summarizes our net (loss) income and net (loss) income attributable to common shareholders (in thousands):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net (loss) income |
|
$ |
(474 |
) |
|
$ |
514 |
|
Net (loss) income attributable to common shareholders |
|
$ |
(209 |
) |
|
$ |
1,979 |
|
Significant items that affected comparability between the three-month periods include:
Our focus is on continuing to execute our strategy to improve occupancy, drive rent growth and transform the offerings available at our diverse portfolio of properties to include a targeted mix of retail, service, dining, entertainment and other non-retail uses, primarily through the re-tenanting of former anchor locations as well as diversification of in-line tenancy. This operational strategy is also supported by our balance sheet strategy. This strategy focuses on reducing overall debt, extending our debt maturity schedule and lowering our overall cost of borrowings to limit maturity risk, as well as improving net cash flow and enhancing enterprise value. While the industry and our Company continue to face challenges, some of which may not be in our control, we believe that the strategies in place to improve occupancy, diversify our tenant mix and redevelop our properties will contribute to stabilization of our portfolio and revenues in future years.
Same-center NOI and FFO are non-GAAP measures. For a description of same-center NOI, a reconciliation from net (loss) income to same-center NOI, and an explanation of why we believe this is a useful performance measure, see Non-GAAP Measure - Same-center Net Operating Income in Results of Operations. For a description of FFO, a reconciliation from net (loss) income attributable to common shareholders to FFO allocable to Operating Partnership common unitholders, and an explanation of why we believe this is a useful performance measure, see Non-GAAP Measure - Funds from Operations.
Results of Operations
Properties that were in operation for the entire year during 2023 and the three months ended March 31, 2024 are referred to as the "Comparable Properties." Since January 2023, we have deconsolidated:
Deconsolidations
Property |
|
Location |
|
Date of Deconsolidation |
Alamance Crossing East (1) |
|
Burlington, NC |
|
February 2023 |
WestGate Mall (1) |
|
Spartanburg, SC |
|
September 2023 |
21
Comparison of the Three Months Ended March 31, 2024 to the Three Months Ended March 31, 2023
Revenues
|
|
Three Months Ended March 31, |
|
|
|
|
|
Comparable |
|
|
|
|
|
|
|
|||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
Core |
|
|
Non-core |
|
|
Deconsolidation |
|
|
Dispositions |
|
|||||||
Rental revenues |
|
$ |
124,027 |
|
|
$ |
130,324 |
|
|
$ |
(6,297 |
) |
|
$ |
(3,568 |
) |
|
$ |
(115 |
) |
|
$ |
(2,642 |
) |
|
$ |
28 |
|
Management, development and leasing fees |
|
|
1,905 |
|
|
|
2,434 |
|
|
|
(529 |
) |
|
|
(529 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other |
|
|
3,185 |
|
|
|
3,601 |
|
|
|
(416 |
) |
|
|
(372 |
) |
|
|
35 |
|
|
|
(79 |
) |
|
|
— |
|
Total revenues |
|
$ |
129,117 |
|
|
$ |
136,359 |
|
|
$ |
(7,242 |
) |
|
$ |
(4,469 |
) |
|
$ |
(80 |
) |
|
$ |
(2,721 |
) |
|
$ |
28 |
|
Rental revenues from the Comparable Properties decreased primarily due to an unfavorable variance in the estimate for uncollectable revenues as compared to the prior-year period, as well as lower tenant reimbursements and percentage rents. The unfavorable variance in the estimate for uncollectable revenues resulted from an increase in reserves for certain at-risk tenants during the three months ended March 31, 2024, while the prior-year period amount was positive due to recoveries of amounts that had been reserved in prior periods. Tenant reimbursements were lower due to the accrual of credits to tenants at certain properties related to reduced assessments and refunds received from successful appeals of real estate taxes at certain properties. The decline in percentage rents corresponds to the decline in tenant sales as compared to the prior-year period.
Operating Expenses
|
|
Three Months Ended March 31, |
|
|
|
|
|
Comparable |
|
|
|
|
|
|
|
|||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
Core |
|
|
Non-core |
|
|
Deconsolidation |
|
|
Dispositions |
|
|||||||
Property operating |
|
$ |
(23,827 |
) |
|
$ |
(24,614 |
) |
|
$ |
787 |
|
|
$ |
184 |
|
|
$ |
(15 |
) |
|
$ |
646 |
|
|
$ |
(28 |
) |
Real estate taxes |
|
|
(9,269 |
) |
|
|
(14,788 |
) |
|
|
5,519 |
|
|
|
5,169 |
|
|
|
15 |
|
|
|
334 |
|
|
|
1 |
|
Maintenance and repairs |
|
|
(9,938 |
) |
|
|
(11,524 |
) |
|
|
1,586 |
|
|
|
1,390 |
|
|
|
(38 |
) |
|
|
234 |
|
|
|
— |
|
Property operating expenses |
|
|
(43,034 |
) |
|
|
(50,926 |
) |
|
|
7,892 |
|
|
|
6,743 |
|
|
|
(38 |
) |
|
|
1,214 |
|
|
|
(27 |
) |
Depreciation and amortization |
|
|
(38,040 |
) |
|
|
(53,269 |
) |
|
|
15,229 |
|
|
|
13,812 |
|
|
|
127 |
|
|
|
1,290 |
|
|
|
— |
|
General and administrative |
|
|
(20,414 |
) |
|
|
(19,229 |
) |
|
|
(1,185 |
) |
|
|
(1,185 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on impairment |
|
|
(836 |
) |
|
|
— |
|
|
|
(836 |
) |
|
|
(836 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Litigation settlement |
|
|
68 |
|
|
|
44 |
|
|
|
24 |
|
|
|
24 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other |
|
|
— |
|
|
|
(198 |
) |
|
|
198 |
|
|
|
198 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total operating expenses |
|
$ |
(102,256 |
) |
|
$ |
(123,578 |
) |
|
$ |
21,322 |
|
|
$ |
18,756 |
|
|
$ |
89 |
|
|
$ |
2,504 |
|
|
$ |
(27 |
) |
Total property operating expenses at the Comparable Properties decreased primarily due to lower real estate taxes and janitorial and security costs. Real estate taxes declined primarily due to refunds obtained at certain properties.
Depreciation and amortization expense at the Comparable Properties decreased primarily due to assets becoming fully depreciated or amortized since the prior-year period related to the shorter useful lives that were implemented upon the adoption of fresh start accounting when we emerged from bankruptcy on November 1, 2021.
General and administrative expenses increased as compared to the prior-year period primarily due to higher compensation expense related to annual compensation increases and higher share-based compensation expenses related to awards granted since the prior-year period.
Other Income and Expenses
Interest and other income increased $1.3 million during the three months ended March 31, 2024 as compared to the prior-year period primarily due to holding U.S. Treasury securities that carried higher interest rates in the current-year period.
Interest expense decreased $3.7 million during the three months ended March 31, 2024 as compared to the prior-year period. The decrease was primarily due to $4.3 million less accretion on property-level debt discounts as certain discounts became fully accreted since the prior year period. Also, the decrease in interest expense was impacted by higher default interest expense in the prior-year period. The decrease in interest expense was partially offset by an increase of $1.8 million in the current period related to the term loan and open-air centers and outparcels loan due to increased variable rates.
For the three months ended March 31, 2023, we recorded a $28.2 million gain on deconsolidation related to Alamance Crossing East. The property was deconsolidated due to a loss of control when it was placed into receivership in connection with the foreclosure process.
Equity in earnings of unconsolidated affiliates increased $5.9 million for the three months ended March 31, 2024 as compared to the prior-year period. The increase primarily relates to distributions received in the current-year period as
22
compared to contributions made in the prior-year period attributable to certain investments in unconsolidated affiliates in which our investment is below zero.
During the three months ended March 31, 2024, we recognized $3.7 million of gain on sales of real estate assets related to the sale of an anchor parcel. During the three months ended March 31, 2023, we recognized $1.6 million of gain on sales of real estate assets related to the sale of four land parcels.
Non-GAAP Measure
Same-center Net Operating Income
NOI is a supplemental non-GAAP measure of the operating performance of our shopping centers and other properties. We define NOI as property operating revenues (rental revenues and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs).
We compute NOI based on the Operating Partnership's pro rata share of both consolidated and unconsolidated properties. We believe that presenting NOI and same-center NOI (described below) based on our Operating Partnership’s pro rata share of both consolidated and unconsolidated properties is useful since we conduct substantially all our business through our Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of our common shareholders and the noncontrolling interest in the Operating Partnership. Our definition of NOI may be different than that used by other companies, and accordingly, our calculation of NOI may not be comparable to that of other companies.
Since NOI includes only those revenues and expenses related to the operations of our shopping center properties, we believe that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates, sales at our properties and operating costs and the impact of those trends on our results of operations. Our calculation of same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets in order to enhance the comparability of results from one period to another.
We include a property in our same-center pool when we have owned all or a portion of the property since January 1 of the preceding calendar year and it has been in operation for both the entire preceding calendar year and current year-to-date period. New properties are excluded from same-center NOI until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these criteria are categorized as excluded properties. We exclude properties which are under major redevelopment or are being considered for repositioning, and where we are working or intend to work with the lender on a restructure of the terms of the loan secured by the property or convey the secured property to the lender (“Excluded Properties”). As of March 31, 2024, Alamance Crossing East, Harford Mall and WestGate Mall were classified as Excluded Properties.
Due to the exclusions noted above, same-center NOI should only be used as a supplemental measure of our performance and not as an alternative to GAAP operating income (loss) or net income (loss).
23
A reconciliation of our same-center NOI to net (loss) income for the three-month periods ended March 31, 2024 and 2023 is as follows (in thousands):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net (loss) income |
|
$ |
(474 |
) |
|
$ |
514 |
|
Adjustments: (1) |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
41,469 |
|
|
|
57,242 |
|
Interest expense |
|
|
56,028 |
|
|
|
59,006 |
|
Abandoned projects expense |
|
|
— |
|
|
|
17 |
|
Gain on sales of real estate assets |
|
|
(3,721 |
) |
|
|
(1,596 |
) |
Loss on sales of real estate assets of unconsolidated affiliates |
|
|
— |
|
|
|
16 |
|
Adjustment for unconsolidated affiliates with negative investment |
|
|
(2,568 |
) |
|
|
1,591 |
|
Gain on deconsolidation |
|
|
— |
|
|
|
(28,151 |
) |
Loss on impairment |
|
|
836 |
|
|
|
— |
|
Litigation settlement |
|
|
(68 |
) |
|
|
(44 |
) |
Income tax benefit |
|
|
(158 |
) |
|
|
(101 |
) |
Lease termination fees |
|
|
(983 |
) |
|
|
(1,161 |
) |
Straight-line rent and above- and below-market lease amortization |
|
|
4,007 |
|
|
|
3,689 |
|
Net loss attributable to noncontrolling interests in other consolidated subsidiaries |
|
|
524 |
|
|
|
1,745 |
|
General and administrative expenses |
|
|
20,414 |
|
|
|
19,229 |
|
Management fees and non-property level revenues |
|
|
(6,447 |
) |
|
|
(4,980 |
) |
Operating Partnership's share of property NOI |
|
|
108,859 |
|
|
|
107,016 |
|
Non-comparable NOI |
|
|
(47 |
) |
|
|
(2,005 |
) |
Total same-center NOI |
|
$ |
108,812 |
|
|
$ |
105,011 |
|
Same-center NOI increased 3.6% for the three months ended March 31, 2024 as compared to the prior-year period. The $3.8 million increase for the three months ended March 31, 2024 compared to the same period in 2023 primarily consisted of a $3.0 million decrease in revenues offset by a $6.8 million decrease in operating expenses. Rental revenues were $2.8 million lower primarily due to an unfavorable variance in the estimate for uncollectable revenues in the current-year period as compared to the prior-year period, as well as lower tenant reimbursements and percentage rents. Property operating expenses decreased in the current-year period primarily due to lower real estate taxes related to reduced assessments and refunds received from successful appeals at certain properties and lower janitorial and security costs.
Operational Review
The shopping center business is, to some extent, seasonal in nature with tenants typically achieving the highest levels of sales during the fourth quarter due to the holiday season, which generally results in higher percentage rents in the fourth quarter. Additionally, malls, lifestyle centers and outlet centers earn a large portion of their rents from short-term tenants during the holiday period. Thus, occupancy levels and revenue production are generally the highest in the fourth quarter of each year. Results of operations realized in any one quarter may not be indicative of the results likely to be experienced over the course of the fiscal year.
We derive the majority of our revenues from the malls, lifestyle centers and outlet centers. The sources of our revenues by property type were as follows:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Malls, lifestyle centers and outlet centers |
|
|
84.9 |
% |
|
|
85.0 |
% |
All Other Properties |
|
|
15.1 |
% |
|
|
15.0 |
% |
24
Inline and Adjacent Freestanding Tenant Store Sales
Inline and adjacent freestanding tenant store sales include reporting mall, lifestyle center and outlet center tenants of 10,000 square feet or less and exclude license agreements, which are retail leases that are temporary or short-term in nature and generally last more than three months but less than twelve months. The following is a comparison of our same-center tenant sales per square foot for mall, lifestyle center and outlet center tenants of 10,000 square feet or less (Excluded Properties are not included in sales metrics):
|
|
Sales Per Square Foot for the Trailing Twelve Months Ended March 31, |
|
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
% Change |
||
Malls, lifestyle centers and outlet centers same-center sales per square foot |
|
$ |
417 |
|
|
$ |
433 |
|
|
(3.7)% |
Occupancy
Our portfolio occupancy is summarized in the following table (Excluded Properties are not included in occupancy metrics):
|
|
As of March 31, |
||
|
|
2024 |
|
2023 |
Total portfolio |
|
89.4% |
|
89.9% |
Malls, lifestyle centers and outlet centers: |
|
|
|
|
Total malls |
|
87.0% |
|
88.0% |
Total lifestyle centers |
|
90.5% |
|
90.9% |
Total outlet centers |
|
90.5% |
|
87.3% |
Total same-center malls, lifestyle centers and outlet centers |
|
87.7% |
|
88.2% |
All Other Properties: |
|
|
|
|
Total open-air centers |
|
95.1% |
|
96.0% |
Total other |
|
84.5% |
|
79.9% |
Leasing
The following is a summary of the total square feet of leases signed in the three-month periods ended March 31, 2024 and 2023:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Operating portfolio: |
|
|
|
|
|
|
||
New leases |
|
|
222,370 |
|
|
|
286,013 |
|
Renewal leases |
|
|
924,431 |
|
|
|
988,491 |
|
Total leased |
|
|
1,146,801 |
|
|
|
1,274,504 |
|
Average annual base rents per square foot are based on contractual rents in effect as of March 31, 2024 and 2023, including the impact of any rent concessions. Average annual base rents per square foot for comparable small shop space of less than 10,000 square feet were as follows for each property type:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Total portfolio (1) |
|
$ |
26.00 |
|
|
$ |
25.42 |
|
Malls, lifestyle centers and outlet centers: |
|
|
|
|
|
|
||
Total same-center malls, lifestyle centers and outlet centers |
|
|
31.07 |
|
|
|
30.04 |
|
Total malls |
|
|
31.42 |
|
|
|
30.45 |
|
Total lifestyle centers |
|
|
30.69 |
|
|
|
29.19 |
|
Total outlet centers |
|
|
29.12 |
|
|
|
27.78 |
|
All Other Properties: |
|
|
|
|
|
|
||
Total open-air centers |
|
|
15.47 |
|
|
|
15.31 |
|
Total other |
|
|
20.61 |
|
|
|
19.82 |
|
25
Results from new and renewal leasing of comparable small shop space of less than 10,000 square feet during the three-month period ended March 31, 2024 for spaces that were previously occupied, based on the contractual terms of the related leases inclusive of the impact of any rent concessions, are as follows:
Property Type |
|
Square |
|
|
Prior Gross |
|
|
New Initial |
|
|
% Change |
|
|
New Average |
|
|
% Change |
|
||||||
Three Months Ended March 31, 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
All Property Types (2) |
|
|
774,632 |
|
|
$ |
31.64 |
|
|
$ |
33.90 |
|
|
|
7.1 |
% |
|
$ |
34.88 |
|
|
|
10.2 |
% |
Malls, Lifestyle Centers & Outlet Centers |
|
|
732,688 |
|
|
|
31.82 |
|
|
|
34.04 |
|
|
|
7.0 |
% |
|
|
34.94 |
|
|
|
9.8 |
% |
New leases |
|
|
87,387 |
|
|
|
21.79 |
|
|
|
41.81 |
|
|
|
91.9 |
% |
|
|
45.60 |
|
|
|
109.3 |
% |
Renewal leases |
|
|
645,301 |
|
|
|
33.18 |
|
|
|
32.99 |
|
|
|
(0.6 |
)% |
|
|
33.50 |
|
|
|
1.0 |
% |
New and renewal leasing activity of comparable small shop space of less than 10,000 square feet based on the lease commencement date is as follows:
|
|
Number |
|
|
Square |
|
|
Term |
|
|
Initial |
|
|
Average |
|
|
Expiring |
|
|
Initial Rent |
|
|
Average Rent |
|
||||||||||||||||
Commencement 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
New |
|
|
47 |
|
|
|
168,458 |
|
|
|
6.94 |
|
|
$ |
35.89 |
|
|
$ |
39.16 |
|
|
$ |
22.92 |
|
|
$ |
12.97 |
|
|
|
56.6 |
% |
|
$ |
16.24 |
|
|
|
70.9 |
% |
Renewal |
|
|
418 |
|
|
|
1,447,402 |
|
|
|
2.69 |
|
|
|
33.90 |
|
|
|
34.39 |
|
|
|
34.92 |
|
|
|
(1.02 |
) |
|
|
(2.9 |
)% |
|
|
(0.53 |
) |
|
|
(1.5 |
)% |
Commencement 2024 Total |
|
|
465 |
|
|
|
1,615,860 |
|
|
|
3.12 |
|
|
|
34.10 |
|
|
|
34.88 |
|
|
|
33.67 |
|
|
|
0.43 |
|
|
|
1.3 |
% |
|
|
1.21 |
|
|
|
3.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commencement 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
New |
|
|
4 |
|
|
|
3,643 |
|
|
|
10.00 |
|
|
|
109.73 |
|
|
|
125.57 |
|
|
|
66.08 |
|
|
|
43.65 |
|
|
|
66.1 |
% |
|
|
59.49 |
|
|
|
90.0 |
% |
Renewal |
|
|
26 |
|
|
|
81,380 |
|
|
|
3.33 |
|
|
|
38.91 |
|
|
|
40.09 |
|
|
|
36.05 |
|
|
|
2.86 |
|
|
|
7.9 |
% |
|
|
4.04 |
|
|
|
11.2 |
% |
Commencement 2025 Total |
|
|
30 |
|
|
|
85,023 |
|
|
|
4.22 |
|
|
|
41.94 |
|
|
|
43.75 |
|
|
|
37.34 |
|
|
|
4.60 |
|
|
|
12.3 |
% |
|
|
6.41 |
|
|
|
17.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total 2024/2025 |
|
|
495 |
|
|
|
1,700,883 |
|
|
|
3.18 |
|
|
$ |
34.50 |
|
|
$ |
35.33 |
|
|
$ |
33.85 |
|
|
$ |
0.65 |
|
|
|
1.9 |
% |
|
$ |
1.48 |
|
|
|
4.4 |
% |
Liquidity and Capital Resources
As of March 31, 2024, we had $295.3 million available in unrestricted cash and U.S. Treasury securities. Our total pro rata share of debt, excluding unamortized deferred financing costs and debt discounts, at March 31, 2024 was $2,618.1 million, which includes two unconsolidated property loans totaling $69.8 million that are in receivership. We had $47.9 million in restricted cash at March 31, 2024 related to cash held in escrow accounts for insurance, real estate taxes, capital expenditures and tenant allowances as required by the terms of certain mortgage notes payable, as well as amounts related to cash management agreements with lenders of certain property-level mortgage indebtedness, which are designated for debt service and operating expense obligations. We also had restricted cash of $19.0 million related to the properties that secure the corporate term loan and the open-air centers and outparcels loan of which we may receive a portion via distributions semiannually and quarterly in accordance with the provisions of the term loan and the open-air centers and outparcels loan, respectively.
During the three months ended March 31, 2024, we continued to reinvest the cash from maturing U.S. Treasury securities into new U.S. Treasury securities. We designated our U.S. Treasury securities as available-for-sale. In February 2024, we redeemed U.S. Treasury securities and used the proceeds to pay off the $15.2 million loan secured by Brookfield Square Anchor Redevelopment. As of March 31, 2024, our U.S. Treasury securities have maturities through September 2024. Subsequent to March 31, 2024, we redeemed and purchased additional U.S. Treasury securities. See Note 14 for more information.
We paid a common stock dividend of $0.40 per share in the first quarter of 2024.
During the three months ended March 31, 2024, we sold an anchor parcel and an outparcel which generated approximately $7.7 million in gross proceeds at our share.
Subsequent to March 31, 2024, the Company exercised the first one-year extension option on the loan secured by Fayette Mall. See Note 14.
Our total share of consolidated, unconsolidated and other outstanding debt, excluding debt discounts and deferred financing costs, maturing during 2024, assuming all extension options are elected, is $102.6 million, and our total share of consolidated, unconsolidated and other outstanding debt, excluding debt discounts and deferred financing costs, that matured prior to 2024, which remains outstanding at March 31, 2024, is $69.8 million, consisting of two property loans that are in receivership.
26
Cash Flows - Operating, Investing and Financing Activities
There was $127.3 million of cash, cash equivalents and restricted cash as of March 31, 2024, an increase of $32.3 million from March 31, 2023. Of this amount, $60.3 million was unrestricted cash and cash equivalents as of March 31, 2024. Also, at March 31, 2024, we had $235.0 million in U.S. Treasuries with maturities through September 2024.
Our net cash flows are summarized as follows (in thousands):
|
|
Three Months Ended March 31, |
|
|
|
|
||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|||
Net cash provided by operating activities |
|
$ |
30,738 |
|
|
$ |
33,175 |
|
|
$ |
(2,437 |
) |
Net cash provided by investing activities |
|
|
26,804 |
|
|
|
29,872 |
|
|
|
(3,068 |
) |
Net cash used in financing activities |
|
|
(53,361 |
) |
|
|
(110,009 |
) |
|
|
56,648 |
|
Net cash flows |
|
$ |
4,181 |
|
|
$ |
(46,962 |
) |
|
$ |
51,143 |
|
Cash Provided By Operating Activities
Cash provided by operating activities decreased primarily due to lower tenant reimbursements and percentage rents, as well as higher interest expense resulting from rising variable interest rates. Tenant reimbursements were lower due to the accrual of credits to tenants at certain properties related to reduced assessments and refunds received from successful appeals of real estate taxes at certain properties. The decline in percentage rents corresponds to the decline in tenant sales as compared to the prior-year period.
Cash Provided By Investing Activities
Cash provided by investing activities slightly decreased primarily due to a lower amount of net redemptions of U.S. Treasury securities and a lower amount of distributions from unconsolidated affiliates during the current-year period as compared to the prior-year period. The decrease was partially offset by an increase in proceeds from sales of real estate assets and a lower amount of investments in and advances to unconsolidated affiliates during the current-year period as compared to the prior-year period.
Cash Used In Financing Activities
Cash used in financing activities decreased primarily due to the payment of a first quarter 2023 special dividend that was declared during the fourth quarter of 2022. The decrease was partially offset by an increase in principal payments and repurchases of common stock during the current-year period as compared to the prior-year period.
27
Debt
The following tables summarize debt based on our pro rata ownership share, including our pro rata share of unconsolidated affiliates and excluding noncontrolling investors’ share of consolidated properties. Prior to consideration of unamortized deferred financing costs or debt discounts, of our $2,618.1 million outstanding debt at March 31, 2024, $2,566.1 million constituted non-recourse debt obligations and $52.0 million constituted recourse debt obligations. We believe the tables below provide investors and lenders a clearer understanding of our total debt obligations and liquidity (in thousands):
March 31, 2024: |
|
Consolidated |
|
|
Noncontrolling |
|
|
Other Debt (1) |
|
|
Unconsolidated |
|
|
Total |
|
|
Weighted- |
|
|||||
Fixed-rate debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-recourse loans on operating properties |
|
$ |
727,258 |
|
|
$ |
(24,919 |
) |
|
$ |
69,783 |
|
|
$ |
612,831 |
|
|
$ |
1,384,953 |
|
|
5.05% |
|
Open-air centers and outparcels loan |
|
|
179,180 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
179,180 |
|
|
6.95% |
(3) |
Recourse loans on operating properties |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,809 |
|
|
|
5,809 |
|
|
3.78% |
|
Total fixed-rate debt |
|
|
906,438 |
|
|
|
(24,919 |
) |
|
|
69,783 |
|
|
|
618,640 |
|
|
|
1,569,942 |
|
|
5.26% |
|
Variable-rate debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-recourse loans on operating properties |
|
|
33,480 |
|
|
|
(11,718 |
) |
|
|
— |
|
|
|
10,448 |
|
|
|
32,210 |
|
|
8.55% |
|
Recourse loans on operating properties |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
46,171 |
|
|
|
46,171 |
|
|
8.33% |
|
Open-air centers and outparcels loan |
|
|
179,180 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
179,180 |
|
|
9.43% |
(3) |
Secured term loan |
|
|
790,595 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
790,595 |
|
|
8.19% |
|
Total variable-rate debt |
|
|
1,003,255 |
|
|
|
(11,718 |
) |
|
|
— |
|
|
|
56,619 |
|
|
|
1,048,156 |
|
|
8.42% |
|
Total fixed-rate and variable-rate debt |
|
|
1,909,693 |
|
|
|
(36,637 |
) |
|
|
69,783 |
|
|
|
675,259 |
|
|
|
2,618,098 |
|
|
6.53% |
|
Unamortized deferred financing costs |
|
|
(12,086 |
) |
|
|
224 |
|
|
|
— |
|
|
|
(2,890 |
) |
|
|
(14,752 |
) |
|
|
|
Debt discounts (4) |
|
|
(37,313 |
) |
|
|
3,229 |
|
|
|
— |
|
|
|
— |
|
|
|
(34,084 |
) |
|
|
|
Total mortgage and other indebtedness, net |
|
$ |
1,860,294 |
|
|
$ |
(33,184 |
) |
|
$ |
69,783 |
|
|
$ |
672,369 |
|
|
$ |
2,569,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2023: |
|
Consolidated |
|
|
Noncontrolling |
|
|
Other Debt (1) |
|
|
Unconsolidated |
|
|
Total |
|
|
Weighted- |
|
|||||
Fixed-rate debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-recourse loans on operating properties |
|
$ |
736,573 |
|
|
$ |
(25,021 |
) |
|
$ |
69,783 |
|
|
$ |
616,337 |
|
|
$ |
1,397,672 |
|
|
5.05% |
|
Open-air centers and outparcels loan |
|
|
179,180 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
179,180 |
|
|
6.95% |
(3) |
Recourse loans on operating properties |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,832 |
|
|
|
5,832 |
|
|
3.04% |
|
Total fixed-rate debt |
|
|
915,753 |
|
|
|
(25,021 |
) |
|
|
69,783 |
|
|
|
622,169 |
|
|
|
1,582,684 |
|
|
5.26% |
|
Variable-rate debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-recourse loans on operating properties |
|
|
33,780 |
|
|
|
(11,823 |
) |
|
|
— |
|
|
|
10,478 |
|
|
|
32,435 |
|
|
8.56% |
|
Recourse loans on operating properties |
|
|
15,339 |
|
|
|
— |
|
|
|
— |
|
|
|
46,796 |
|
|
|
62,135 |
|
|
8.13% |
|
Open-air centers and outparcels loan |
|
|
179,180 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
179,180 |
|
|
9.44% |
(3) |
Secured term loan |
|
|
799,914 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
799,914 |
|
|
8.21% |
|
Total variable-rate debt |
|
|
1,028,213 |
|
|
|
(11,823 |
) |
|
|
— |
|
|
|
57,274 |
|
|
|
1,073,664 |
|
|
8.42% |
|
Total fixed-rate and variable-rate debt |
|
|
1,943,966 |
|
|
|
(36,844 |
) |
|
|
69,783 |
|
|
|
679,443 |
|
|
|
2,656,348 |
|
|
6.54% |
|
Unamortized deferred financing costs |
|
|
(13,221 |
) |
|
|
249 |
|
|
|
— |
|
|
|
(3,197 |
) |
|
|
(16,169 |
) |
|
|
|
Debt discounts (4) |
|
|
(41,942 |
) |
|
|
3,706 |
|
|
|
— |
|
|
|
— |
|
|
|
(38,236 |
) |
|
|
|
Total mortgage and other indebtedness, net |
|
$ |
1,888,803 |
|
|
$ |
(32,889 |
) |
|
$ |
69,783 |
|
|
$ |
676,246 |
|
|
$ |
2,601,943 |
|
|
|
|
The weighted-average remaining term of our total share of consolidated and unconsolidated debt, excluding debt discounts and deferred financing costs, was 2.2 years and 2.4 years at March 31, 2024 and December 31, 2023, respectively. The weighted-average remaining term of our pro rata share of fixed-rate debt, excluding debt discounts and deferred financing costs, was 2.5 years and 2.7 years at March 31, 2024 and December 31, 2023, respectively.
As of March 31, 2024 and December 31, 2023, our total share of consolidated and unconsolidated variable-rate debt, excluding debt discounts and deferred financing costs, represented 40.0% and 40.4%, respectively, of our total pro rata share of debt, excluding debt discounts and deferred financing costs.
See Note 7 to the condensed consolidated financial statements for information concerning activity related to unconsolidated affiliates.
28
Equity
We paid a common stock dividend of $0.40 per share in the first quarter of 2024. The decision to declare and pay dividends on any outstanding shares of our common stock, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our board of directors and will depend on our earnings, taxable income, FFO, liquidity, financial condition, capital requirements, contractual prohibitions or other limitations under our then-current indebtedness, the annual distribution requirements under the REIT provisions of the Internal Revenue Code, Delaware law and such other factors as our board of directors deems relevant. Any dividends payable will be determined by our board of directors based upon the circumstances at the time of declaration. Our actual results of operations will be affected by a number of factors, including the revenues received from our properties, our operating expenses, interest expense, capital expenditures and the ability of the anchors and tenants at our properties to meet their obligations for payment of rents and tenant reimbursements.
Capital Expenditures
The following table, which excludes expenditures for developments, redevelopments and expansions, summarizes our capital expenditures, including our share of unconsolidated affiliates' capital expenditures, for the three months ended March 31, 2024 compared to the same period in 2023 (in thousands):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Tenant allowances (1) |
|
$ |
1,982 |
|
|
$ |
3,574 |
|
|
|
|
|
|
|
|
||
Maintenance capital expenditures: |
|
|
|
|
|
|
||
Parking area and parking area lighting |
|
|
280 |
|
|
|
331 |
|
Roof replacements |
|
|
948 |
|
|
|
537 |
|
Other capital expenditures |
|
|
4,189 |
|
|
|
1,658 |
|
Total maintenance capital expenditures |
|
|
5,417 |
|
|
|
2,526 |
|
|
|
|
|
|
|
|
||
Capitalized overhead |
|
|
52 |
|
|
|
700 |
|
|
|
|
|
|
|
|
||
Capitalized interest |
|
|
134 |
|
|
|
106 |
|
|
|
|
|
|
|
|
||
Total capital expenditures |
|
$ |
7,585 |
|
|
$ |
6,906 |
|
Annual capital expenditures budgets are prepared for each of our properties that are intended to provide for all necessary recurring and non-recurring capital expenditures. We believe that property operating cash flows, which include reimbursements from tenants for certain expenses, and readily available cash on hand will provide the necessary funding for these expenditures.
29
Developments
Properties Under Development at March 31, 2024
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
CBL's Share of |
|
|
|
|
|
||||||||||
Property |
|
Location |
|
CBL |
|
Total |
|
|
Total |
|
|
Cost to |
|
|
2024 |
|
|
Expected Opening |
|
Initial |
||||
Outparcel Development: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mayfaire Town Center - hotel development |
|
Wilmington, NC |
|
49% |
|
|
83,021 |
|
|
$ |
15,435 |
|
|
$ |
4,065 |
|
|
$ |
867 |
|
|
Summer '25 |
|
11.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Redevelopments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hamilton Place - Crunch Fitness |
|
Chattanooga, TN |
|
100% |
|
|
36,640 |
|
|
|
2,648 |
|
|
|
1,860 |
|
|
|
5 |
|
|
Summer '24 |
|
23.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Properties Under Development |
|
|
|
|
|
|
119,661 |
|
|
$ |
18,083 |
|
|
$ |
5,925 |
|
|
$ |
872 |
|
|
|
|
|
Off-Balance Sheet Arrangements
Unconsolidated Affiliates
We have ownership interests in 26 unconsolidated affiliates as of March 31, 2024 that are described in Note 7 to the condensed consolidated financial statements. The unconsolidated affiliates are accounted for using the equity method of accounting and are reflected in the condensed consolidated balance sheets as investments in unconsolidated affiliates.
The following are circumstances when we may consider entering into a joint venture with a third party:
Guarantees
We may guarantee the debt of a joint venture primarily because it allows the joint venture to obtain funding at a lower cost than could be obtained otherwise. This results in a higher return for the joint venture on its investment, and a higher return on our investment in the joint venture. We may receive a fee from the joint venture for providing the guaranty. Additionally, when we issue a guaranty, the terms of the joint venture agreement typically provide that we may receive indemnification from the joint venture or have the ability to increase our ownership interest.
See Note 11 to the condensed consolidated financial statements for information related to our guarantees of unconsolidated affiliates' debt as of March 31, 2024 and December 31, 2023.
30
Critical Accounting Policies
Our discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the financial statements and disclosures. Some of these estimates and assumptions require application of difficult, subjective, and/or complex judgment about the effect of matters that are inherently uncertain and that may change in subsequent periods. We evaluate our estimates and assumptions on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Our Annual Report on Form 10-K for the year ended December 31, 2023 contains a discussion of our critical accounting policies and estimates in the Management's Discussion and Analysis of Financial Condition and Results of Operations section. There have been no material changes to these policies and estimates during the three months ended March 31, 2024. Our significant accounting policies are disclosed in Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Non-GAAP Measure
Funds from Operations
FFO is a widely used non-GAAP measure of the operating performance of real estate companies that supplements net income (loss) determined in accordance with GAAP. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) (computed in accordance with GAAP) excluding gains or losses on sales of depreciable operating properties and impairment losses of depreciable properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests. Adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests are calculated on the same basis. We define FFO as defined above by NAREIT. Our method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
We believe that FFO provides an additional indicator of the operating performance of our properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of real estate assets have historically risen or fallen with market conditions, we believe that FFO enhances investors’ understanding of our operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of our properties and interest rates, but also by our capital structure.
We believe FFO allocable to Operating Partnership common unitholders is a useful performance measure since we conduct substantially all our business through our Operating Partnership and, therefore, it reflects the performance of our properties in absolute terms regardless of the ratio of ownership interests of our common shareholders and the noncontrolling interest in our Operating Partnership.
In our reconciliation of net (loss) income attributable to common shareholders to FFO allocable to Operating Partnership common unitholders that is presented below, we make an adjustment to add back noncontrolling interest in income (loss) of our Operating Partnership in order to arrive at FFO of the Operating Partnership common unitholders.
FFO does not represent cash flows from operations as defined by GAAP, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income (loss) for purposes of evaluating our operating performance or to cash flow as a measure of liquidity.
We believe that it is important to identify the impact of certain significant items on our FFO measures for a reader to have a complete understanding of our results of operations. Therefore, we have also presented adjusted FFO measures excluding these significant items from the applicable periods. Please refer to the reconciliation of net (loss) income attributable to common shareholders to FFO allocable to Operating Partnership common unitholders below for a description of these adjustments.
31
The reconciliation of net (loss) income attributable to common shareholders to FFO allocable to Operating Partnership common unitholders for the three months ended March 31, 2024 and 2023 is as follows (in thousands):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net (loss) income attributable to common shareholders |
|
$ |
(209 |
) |
|
$ |
1,979 |
|
Earnings allocable to unvested restricted stock |
|
|
259 |
|
|
|
280 |
|
Depreciation and amortization expense of: |
|
|
|
|
|
|
||
Consolidated properties |
|
|
38,040 |
|
|
|
53,269 |
|
Unconsolidated affiliates |
|
|
3,989 |
|
|
|
4,638 |
|
Non-real estate assets |
|
|
(259 |
) |
|
|
(148 |
) |
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries |
|
|
(560 |
) |
|
|
(665 |
) |
Loss on impairment, net of taxes |
|
|
619 |
|
|
|
— |
|
Gain on depreciable property |
|
|
(3,721 |
) |
|
|
— |
|
FFO allocable to Operating Partnership common unitholders |
|
|
38,158 |
|
|
|
59,353 |
|
Debt discount accretion, including our share of unconsolidated affiliates and net of noncontrolling interests' share (1) |
|
|
11,795 |
|
|
|
16,616 |
|
Adjustment for unconsolidated affiliates with negative investment (2) |
|
|
(2,568 |
) |
|
|
1,591 |
|
Litigation settlement (3) |
|
|
(68 |
) |
|
|
(44 |
) |
Non-cash default interest expense (4) |
|
|
— |
|
|
|
494 |
|
Gain on deconsolidation (5) |
|
|
— |
|
|
|
(28,151 |
) |
FFO allocable to Operating Partnership common unitholders, as adjusted |
|
$ |
47,317 |
|
|
$ |
49,859 |
|
The decrease in FFO, as adjusted, for the three months ended March 31, 2024 was primarily driven by an unfavorable variance in the estimate for uncollectable revenues in the current-year period as compared to the prior-year period, as well as lower tenant reimbursements and percentage rents. The decrease was partially offset by lower real estate taxes related to reduced assessments and refunds received from successful appeals, lower janitorial and security costs and increased interest income on our U.S. Treasury securities.
32
ITEM 3: Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risk exposures, including interest rate risk. The following discussion regarding our risk management activities includes forward-looking statements that involve risk and uncertainties. Estimates of future performance and economic conditions are reflected assuming certain changes in interest rates. Caution should be used in evaluating our overall market risk from the information presented below, as actual results may differ.
Interest Rate Risk
Based on our proportionate share of consolidated and unconsolidated variable-rate debt at March 31, 2024, a 0.5% increase or decrease in interest rates on variable-rate debt would increase or decrease annual interest expense by approximately $5.2 million.
Based on our proportionate share of total consolidated, unconsolidated and other debt at March 31, 2024, a 0.5% increase in interest rates would decrease the fair value of debt by approximately $11.0 million, while a 0.5% decrease in interest rates would increase the fair value of debt by approximately $11.3 million.
ITEM 4: Controls and Procedures
Disclosure Controls and Procedures
As of the end of the period covered by this quarterly report, an evaluation was performed under the supervision of our Chief Executive Officer and Chief Financial Officer and with the participation of our management, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. The Company's disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and to ensure that information we are required to disclose is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
33
PART II - OTHER INFORMATION
ITEM 1: Legal Proceedings
The information in this Item 1 is incorporated by reference herein from Note 11.
ITEM 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the risks that could materially affect our business, financial condition or results of operations that are discussed under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to such risk factors since the filing of our Annual Report.
ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds
Period |
|
Total |
|
|
Average |
|
|
Total Number of |
|
|
Approximate Dollar |
|
||||
January 1–31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
23,893,054 |
|
February 1–29, 2024 |
|
|
71,895 |
|
(2) |
|
23.77 |
|
(3) |
|
59,411 |
|
|
|
22,476,850 |
|
March 1–31, 2024 |
|
|
180,000 |
|
|
|
22.59 |
|
|
|
180,000 |
|
|
|
18,411,455 |
|
Total |
|
|
251,895 |
|
|
|
|
|
|
239,411 |
|
|
|
|
||
ITEM 3: Defaults Upon Senior Securities
Not applicable.
ITEM 4: Mine Safety Disclosures
Not applicable.
ITEM 5: Other Information
34
ITEM 6: Exhibits
INDEX TO EXHIBITS
Exhibit Number |
|
Description |
10.1 |
|
|
10.2 |
|
|
10.3 |
|
|
10.4 |
|
|
10.5 |
|
|
31.1 |
|
|
31.2 |
|
|
32.1 |
|
|
32.2 |
|
|
101.INS |
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. (Filed herewith.) |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document. (Filed herewith.) |
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document. (Filed herewith.) |
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document. (Filed herewith.) |
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document. (Filed herewith.) |
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document. (Filed herewith.) |
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*). (Filed herewith.) |
35
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
CBL & ASSOCIATES PROPERTIES, INC. |
|
|
Date: May 10, 2024 |
/s/ Benjamin W. Jaenicke |
|
Benjamin W. Jaenicke |
|
Executive Vice President - |
|
Chief Financial Officer and Treasurer |
|
(Authorized Officer and Principal Financial Officer) |
36
Exhibit 31.1
CERTIFICATION
I, Stephen D. Lebovitz, certify that:
Date: May 10, 2024
/s/ Stephen D. Lebovitz |
Stephen D. Lebovitz, Director and |
Chief Executive Officer |
Exhibit 31.2
CERTIFICATION
I, Benjamin W. Jaenicke, certify that:
Date: May 10, 2024
/s/ Benjamin W. Jaenicke |
Benjamin W. Jaenicke, Executive Vice President - |
Chief Financial Officer and Treasurer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of CBL & Associates Properties, Inc. (the “Company”) on Form 10‑Q for the period ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen D. Lebovitz, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350 (as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002), that:
/s/ Stephen D. Lebovitz |
|
Stephen D. Lebovitz, Director and |
|
Chief Executive Officer |
|
|
|
May 10, 2024 |
|
Date |
|
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of CBL & Associates Properties, Inc. (the “Company”) on Form 10‑Q for the period ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Benjamin W. Jaenicke, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350 (as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002), that:
/s/ Benjamin W. Jaenicke |
|
Benjamin W. Jaenicke, Executive Vice President - |
|
Chief Financial Officer and Treasurer |
|
|
|
May 10, 2024 |
|
Date |
|