CBL Properties has opened over 1.4 million square feet of new retail, dining, and other space — including a casino — in 2020 as it targets a transformation of its malls into suburban town centers.
Despite the pandemic that shut its properties for six weeks early this year and a later bankruptcy filing, the Chattanooga-based company sees more leasing to unique users in 2021, including another casino, to renew its centers, said CBL Chief Executive Stephen Lebovitz.
“We’ve got a lot of positive things we’ve done across the portfolio,” he said in a telephone interview on Thursday. “There’s so much negativity in general we felt like we have the facts that back up the opposite case.”
Lebovitz said CBL, which operates more than 100 properties in 26 states including Hamilton Place and Northgate malls in Chattanooga, has seen a pickup in some categories which have done well in the pandemic such as furniture, food-related companies, wholesale clubs and supermarkets.
“We’ve had a lot interest in former anchor locations for those kind of uses, including home-related categories,” he said.
Also, there’s continued interest from hotels and the residential sector that’s allowing CBL to continue its diversification strategy and adding mixed uses to its properties, Lebovitz said.
He said the opening last month of Live! Casino Pittsburgh at its Westmoreland Mall in Pennsylvania “really got me fired up.”
“That was amazing,” Lebovitz said about the opening of the casino in former Bon-Ton department store space. “It was the most exciting redevelopment of a former anchor.”
Lebovitz said the redeveloper stripped the former Bon-Ton store space to a shell, rebuilt the inside and outside, and put up new signage, lighting, displays and digital screens for the casino.
“It’s going to bring in so many people,” he said. “It will expand the trade area to be a more regional draw. It’s super-exciting.”
Another casino is slated to open in York, Pennsylvania, at York Galleria later this year, he said.
The company CEO said other new openings include a Main Event entertainment complex and arcade at Mall del Norte in Laredo, Texas, and a Southern Live Music and Entertainment site at Post Oak Mall in College Station, Texas.
Other creative users include the opening of the first Offline by American Eagle apparel location in the country at CoolSprings Galleria in Nashville, one-of-a-kind boutiques at CoolSprings and Fayette Mall in Lexington, Kentucky, and sporting goods locations, such as a Dick’s clearance concept in Monroeville, Pennsylvania.
Also, in time for the holidays, more than a dozen CBL sites will see new Bath & Body Works buy-online-pick-up-in-store locations designed to ease the rush.
“CBL’s team has delivered amazing and highly creative uses across the CBL portfolio this year, including a first-class mix of national brands as well as regional and local operators,” Lebovitz said.
Despite the challenges of the pandemic, expanding brands and new businesses “recognize the value of CBL’s dominant properties as they open new locations,” he said.
Lebovitz cited an Aloft Hotel going up on a parking lot at Hamilton Place mall developed by Chattanooga-based Vision Hospitality Group. That property is to open in March, he said.
“It’s going to be a really nice facility and complement everything we’re doing at Hamilton Place,” he said.
Lebovitz said CBL officials still are confident about its suburban town center strategy.
“I see a bright future for the company and for the properties,” he said.
As the company exits Chapter 11 bankruptcy next year, CBL will hold a stronger balance sheet and have more capital available for investing in redeveloping its properties, the CEO said.
With a vaccine on the horizon, he said, business is expected to come back in a normal way to CBL’s centers.
“I think people are tired of being cooped up in their homes and not being able to get out and be a part of events,” Lebovitz said. “There’s a lot of pent-up demand we’ll be able to benefit from.”
CBL began 42 years ago by a group that included Stephen Lebovitz’s father, Charles, and now also has his two brothers in senior posts so CBL’s struggles in 2020 have been challenging for the entire family.
“No one had ever lived through anything like that before,” Stephen Lebovitz said of the pandemic, adding it forced the company to operate in an environment that was unprecedented.
But Lebovitz said “everyone has risen to the challenge.”
“We’ll get through this,” he said. “We’ll be stronger, and how can we be creative. I’ve never worked harder.”
CBL filed bankruptcy Nov. 1 to reorganize its debts amid the coronavirus pandemic, which ravaged revenues at its centers due to the earlier lockdown, store closings, and a slow return to face-to-face shopping.
But even before the outbreak, CBL was grappling with the changing tastes of shoppers when it comes to malls and department stores along with more online buying.
Chris Kuiper, vice president of equity research at the firm CFRA Research, said CBL will have a better balance sheet as it moves past the bankruptcy filing.
But the key question is did CBL just get “over its skis” in terms of debt load, or will there be enough cash coming in from tenants to remake its malls into more financially reliable properties, he said.
Contact Mike Pare at [email protected] Follow him on Twitter @MikePareTFP.