HOUSTON – (Realty News Report) – CBL & Associates Properties, which owns 107 malls including one in Pearland, has filed for Chapter 11 bankruptcy in Houston.
CBL, which is based in Chattanooga, Tenn. has been under press because the coronavirus demolished mall traffic, reducing sales and forcing mall tenants into bankruptcy. About 30 of CBL mall tenant stores have filed for Chapter 11 so far this year, including JC Penney and other significant retailers.
CBL filed for reorganization in the U.S. Bankruptcy Court for the Southern District of Texas, in Houston
“After months of discussions and consideration of a number of alternatives, CBL’s management and the Board of Directors firmly believe that implementing the comprehensive restructuring … through a Chapter 11 voluntary bankruptcy filing will provide CBL with the best plan to emerge as a stronger and more stable company,” said Stephen D. Lebovitz, CEO of CBL. “With an aggregate of approximately $1.5 billion in unsecured debt and preferred obligations eliminated and a significant increase to net cash flow, upon emergence, CBL will be in a better position to execute on our strategies and move forward as a stable and profitable business.”
Lebovitz has held a prominent position in the industry, serving as chairman of the ICSC (International Council of Shopping Centers) organization in 2015-2016.
CBL’s Pearland Town Center, located 110 acres at Highway 288 and FM 518 is anchored by Dillard’s and Macy’s and it has 644,920 SF of gross leasing area.
CBL’s portfolio is comprised of 107 properties totaling 68 million square feet across 26 states, including 68 high-quality enclosed, outlet and open-air retail centers and nine properties managed for third parties.
Even before the Covid hit, shopping centers and retailers faced competition from online shopping.
Retail centers are losing tenants as stores and restaurants shut down or seek bankruptcy under Covid pressure. Troubled retailers closing stores include Stein Mart, JC Penney, Men’s Warehouse, Victoria Secret, Lord & Taylor and Sears.
“The retail property sector must right-size and reinvent. Retailers and shopping centers were already struggling before COVID-19, and now conditions threaten to worsen materially as the pandemic and its economic fallout acceleratethe pace and magnitude of preexisting issues,” says the Emerging Trends in Real Estate report by the Urban Land Institute and PwC. The report says retail property “faces a painful shakeout as millions of small businesses and familiar national brands shutter their doors, shrinking the ranks of tenants for shopping centers and driving down occupancy and rents.”
In Houston, retail vacancy has been rising. The retail vacancy rate was 6.4 percent in the third quarter, up from 5.6 percent a year earlier, NAI Partners reported.
Nov. 2, 2020 Realty News Report Copyright 2020
File: CBL Mall Owner Files Chapter 11
File: (2) ICSC. Stein Mart, JC Penney, Men’s Warehouse, Victoria Secret, Lord & Taylor CBL Mall Owner Files Chapter 11.