CBL Properties To Revamp Two Malls, Diversifies Tenant Lineup
Zacks Investment Research | May 15, 2019 07:40AM ET
CBL Properties (NYSE:CBL) is making every effort to keep its malls relevant, in pursuit of which, it recently announced redevelopment plans at the company’s Northwoods Mall in North Charleston, SC, and South County Center in St. Louis, MO.
Through the redevelopment, CBL Properties will add a new-to-market entertainment venue, Round1 Bowling & Amusement, at both properties.
In fact, Round1 at Northwoods Mall will occupy nearly 46,000 square feet of reconfigured small shop space and around 50,000 square feet at South County Center. Construction on both projects is expected to start later this year.
Management believes that addition of this new tenant will offer unparalleled family entertainment experience, making both properties premier entertainment destinations. This will help attract mall footfall from surrounding neighborhoods.
Notably, retail REITs are avoiding dependence on apparel and accessories, and rather expanding their dining options, opening movie theaters and fitness centers, as well as offering recreational and entertainment facilities, in particular.
In this context, per CBL Properties management, 80% of new leases signed during the first quarter were with non-apparel tenants. This indicates the company’s efforts to diversify its tenant roster and improve properties. Further, the company has resorted to numerous redevelopment initiatives for revamping its properties in order to boost productivity of retail assets, and grab attention from new and productive tenants.
Eventually, such efforts will boost mall traffic and enable the company to keep its retail centers relevant amid declining footfall at brick-and-mortar spaces.
Specifically, the dominance of e-commerce and online retail sales has compelled retailers to rationalize their physical footprint. This has resulted in widespread store closures and those unable to compete with e-retailers are filing for bankruptcies. This retail apocalypse has become a major growth hurdle for retail REITs like CBL Properties, Cedar Realty Trust, Inc. (NYSE:CDR) , The Macerich Company (NYSE:MAC) and Kimco Realty Corp. (NYSE:KIM) .
CBL Properties currently has a Zacks Rank #3 (Hold). The company’s shares have plunged 46.2% in the past six months compared to the Zacks Investment Research
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