CHATTANOOGA, Tenn.--(BUSINESS WIRE)--CBL & Associates Properties, Inc. (NYSE:CBL) announced future redevelopment/replacement plans for JCPenney anchor locations in the CBL portfolio that are expected to close in 2015 and provided an update on current redevelopment projects.
“As we mentioned on our last earnings call, we fully anticipated these closures by JCPenney and have already made significant progress on our plans to redevelop with new stores and restaurants that will generate higher traffic and productivity,” said Stephen Lebovitz, president & CEO. “With the closures officially announced, we can now move forward towards signing leases and construction timelines.”
Lebovitz added, “The closure of underperforming anchor stores continues to be one of the best value-creation opportunities we have today. Each mall serves as the primary retail hub in their markets and attracts strong retail demand. These closures will allow us to take space that is underperforming and convert it into fresh new retail, driving increased traffic, sales and growth to the entire property as well as generating strong returns to CBL.”
Today, JCPenney announced its intention to close four locations in the CBL portfolio at York Galleria, York, PA; Walnut Square, Dalton, GA; Regency Mall, Racine, WI and Randolph Mall in Asheboro, NC. CBL anticipates store closures to occur in the second quarter. Three locations are leased from CBL. The Regency Mall store was owned by JCPenney and recently sold to a third party as a redevelopment opportunity. The leased stores aggregate approximately 212,000 square feet and $0.9 million in gross annual rent. JCPenney will continue to pay rent until lease expiration.
Based on CBL’s extensive track record of successful anchor redevelopment, similar projects have generally required 12-24 months to complete and an investment of $3–10 million generating initial unleveraged returns in the range of 7-10%. More specific cost and return information regarding the three JCPenney locations closing this year will be announced as plans are finalized.
In 2014, CBL added or redeveloped more than 25 anchor and junior anchor locations to its portfolio comprising more than 600,000 square feet. CBL currently has three anchor redevelopment projects on tap to begin construction in the coming months. These projects include the redevelopment of a former JCPenney location at Janesville Mall in Janesville, WI into Dick’s Sporting Goods and ULTA and the redevelopment of a former JCPenney at Hickory Point in Forsyth, IL into Hobby Lobby.
About CBL & Associates Properties, Inc.
CBL is one of the largest and most active owners and developers of malls and shopping centers in the United States. CBL owns, holds interests in or manages 148 properties, including 89 regional malls/open-air centers. The properties are located in 30 states and total 84.2 million square feet including 6.5 million square feet of non-owned shopping centers managed for third parties. Headquartered in Chattanooga, TN, CBL has regional offices in Boston (Waltham), MA, Dallas (Irving), TX, and St. Louis, MO. Additional information can be found at cblproperties.com.
Information included herein contains "forward-looking statements" within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual events, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. The reader is directed to the Company's various filings with the Securities and Exchange Commission, including without limitation the Company's Annual Report on Form 10-K and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" included therein, for a discussion of such risks and uncertainties.