Chattanooga-based CBL Properties reported strong results for the first quarter.
- CBL reported an increase in same-center NOI of 3.6% for first quarter 2024 compared with the prior-year period, and FFO, as adjusted, per share of $1.50, compared with $1.56 for first quarter 2023. Results were in-line with the previously issued guidance range for 2024 same-center NOI in the range of $428 million - $442 million and after adjusting for year-to-date share repurchase activity, 2024 FFO, as adjusted, per share guidance in the range of $6.24 - $6.69.
- Over 1.1 million square feet of leases were executed in first quarter 2024. First quarter 2024 leasing results included comparable leases of approximately 775,000 square feet signed at a 10.2% increase in average rents versus the prior leases.
- Portfolio occupancy was 89.4% as of March 31, 2024, a 50 basis point decline compared with portfolio occupancy of 89.9% as of March 31, 2023. Same-center occupancy for malls, lifestyle centers and outlet centers was 87.7% as of March 31, 2024, a 50-basis-point decline from 88.2% as of March 31, 2023.
- Same-center tenant sales per square foot for the first quarter 2024 increased 0.2%, a reversal of previous sales trends. Same-center tenant sales per square foot for the 12-months ended March 31, 2024, declined 3.7% to $417, compared with $433 for the prior period.
- As of March 31, 2024, the Company had $295.3 million of unrestricted cash and marketable securities.
- More than $9.1 million in share repurchases completed year-to-date, continuing CBL's commitment to return capital to shareholders.
- CBL's Board of Directors declared a cash dividend of $0.40 per common share for the quarter ending June 30, 2024. The dividend equates to an annual dividend payment of $1.60 per common share.
“As demonstrated by first quarter results, CBL is off to a solid start in 2024," said CBL's chief executive officer, Stephen D. Lebovitz. "We are pleased with the strong 3.6% growth in same-center NOI for the quarter. This growth reflects the improving fundamentals and overall quality of the CBL portfolio. NOI results also include the realization of a multi-year effort to reduce real estate taxes in certain markets, which was anticipated in our original guidance provided last quarter. In addition, results benefited from lower third-party contract expense related to the new contracts signed in third quarter 2023. Maintenance and repair expense was also lower in the quarter, primarily due to timing of projects which are expected to occur later in the year.
“Leasing volumes remained strong this quarter as we signed more than 220,000-square-feet of new leases, highlighted by new locations for Barnes & Noble's in-line mall concept, fast-growing global lifestyle retailer MINISO, Five Below, and food court stores for Popeye's. Comparable leasing spreads were notably up more than 10% as we replaced several spaces with below market prior rents. While we are pleased with this quarter’s leasing spreads, we anticipate experiencing some pressure going forward due to certain national tenants with higher occupancy costs. We were encouraged to see portfolio tenant sales improve modestly during the quarter. Although occupancy declined modestly in the quarter, the overall tenant environment is healthy, and we remain focused on capitalizing on tenant demand for new locations across the portfolio to generate occupancy growth.
"Interest rate volatility and its impact on the overall financing market remains a concern; however, we are benefiting from our well-laddered maturity schedule with only three major loan maturities in 2024. Financing plans for all three are actively in process. We are also exploring various avenues, including potential sales of term loan properties, to meet our term loan extension test in 2025 while minimizing use of our corporate cash reserve.
"Our focus through the remainder of the year is to build on the strong momentum generated in the first quarter while working to improve our debt maturity profile and grow our strong cash position."