CBL & Associates Properties, Inc. announced results for the first quarter ended March 31, including lower profits but rise in store sales.
CBL’s President and Chief Executive Officer Stephen Lebovitz said, “First quarter highlights include an impressive 7 percent increase in same-center sales and the continuation of double-digit lease spreads.
Same-center NOI and occupancy were impacted by the lost income from bankruptcy-related store closures; however, continued healthy demand from higher quality retailers will result in a stronger tenant mix across the CBL portfolio.
“We are making solid progress in executing our disposition program. We closed on the sale of one mall this week and expect to make additional announcements in the near future. We are growing our portfolio with Fremaux Town Center Phase II and Ambassador Town Center now under construction as well as expansions to our Atlanta and Bluegrass outlets. Redevelopments, such as the former Sears at CoolSprings Galleria and Fayette Mall, bring exciting new retailers and restaurants to our centers and enhance our long-term growth rate.”
FFO allocable to common shareholders, as adjusted, for the first quarter 2015 was $87.9 million, or $0.52 per diluted share, compared with $87.7 million, or $0.52 per diluted share, for the first quarter 2014. FFO of the Operating Partnership, as adjusted, for the first quarter 2015 was $102.9 million compared with $102.9 million for the first quarter of 2014.
Net income attributable to common shareholders for the first quarter of 2015 was $34.9 million, or $0.20 per diluted share, compared with net income of $44.1 million, or $0.26 per diluted share, for the first quarter of 2014.
MAJOR VARIANCES IMPACTING SAME-CENTER NOI RESULTS FOR THE QUARTER ENDED MARCH 31, 2015
New leasing and positive renewal spreads contributed to a $0.9 million increase in same-center minimum rents. Minimum rents were impacted by lost income from bankruptcy related store closures.
Percentage rents increased by $0.4 million due to positive sales growth.
Tenant reimbursement of real estate tax expense increased by $1.4 million, offset by a $2.3 million increase in real estate tax expense.
Property operating expense increased by $0.8 million, primarily as a result of a negative variance of $1.1 million due to an insurance adjustment in the prior year period and a $0.4 million increase in bad debt expense.
Maintenance and repairs declined by $1.2 million, primarily as a result of a $0.5 million decline in snow removal expense and a decline in other expenses.
TRANSACTIONS
Subsequent to the quarter-end, CBL completed the sale of Madison Square Mall in Huntsville, AL for $5.0 million, cash.
CBL has additional transactions in various stages. Further updates on the disposition program will be provided on its conference call.
OUTLOOK AND GUIDANCE
Based on its current outlook, the company is reiterating FFO guidance to the range of $2.24 - $2.31 per diluted share. CBL’s guidance assumes a same-center NOI growth range of 0-2.0 percent in 2015.
The guidance also assumes the following:
$2.0 million to $4.0 million of outparcel sales;
No additional unannounced acquisition or disposition activity;
No unannounced capital markets activity.