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Mar 31, 2020
CBL & Associates Q1 2020 Earnings Report
CBL Properties reported results for the first quarter of 2020, impacted by the COVID-19 pandemic.
Key Takeaways
CBL Properties reported a net loss of $133.9 million, or $0.75 per diluted share, for the first quarter of 2020. FFO per diluted share, as adjusted, was $0.26, compared to $0.30 in the prior year. The company has taken steps to improve liquidity and reduce costs in response to the COVID-19 pandemic, including drawing $280 million on its line of credit and deferring capital expenditures.
FFO per diluted share, as adjusted, was $0.26 for the first quarter 2020, compared with $0.30 per share for the first quarter 2019. First quarter 2020 FFO per share was impacted by $0.02 per share of dilution from asset sales completed since the prior-year period and $0.07 per share of lower property NOI offset by $0.02 per share lower interest expense and $0.02 per share lower net G&A expense.
Same-center sales per square foot for the twelve-months ended February 29, 2020, increased 3% to $392 per square foot compared with the prior-year period ended February 28, 2019. The majority of stores in the CBL portfolio closed during the month of March 2020, which resulted in a decline in reported same-center sales per square foot for the month of 45% compared with the prior year month.
Total Portfolio same-center NOI declined 8.7% for the three months ended March 31, 2020, as compared with the prior‑year period.
Portfolio occupancy as of March 31, 2020, was 89.5%, representing a 180-basis point decline compared with 91.3% as of March 31, 2019. Same-center mall occupancy was 87.8% as of March 31, 2020, a 200-basis point decline compared with 89.8% as of March 31, 2019.
CBL & Associates
CBL & Associates
Forward Guidance
Due to the extraordinary governmental actions taken to contain COVID-19, the Company is unable to predict the full extent of the pandemic’s impact to the Company’s results of operations for the remainder of 2020. As a result, on March 25, 2020, CBL withdrew its full-year 2020 FFO per share, as adjusted, guidance and underlying assumptions and does not plan to reinstate full-year 2020 guidance until there is further clarity on the financial impact of the pandemic.
Positive Outlook
- The majority of the properties in our portfolio closed during March due to government mandates. As of May 25th, 66 of 68 CBL owned or managed malls have re-opened, subject to certain health and safety restrictions, including a dozen properties that are offering curbside or exterior-only service.
- As properties re-open, we have worked in cooperation with our tenants to institute strict guidelines, following CDC and health department recommendations, to help ensure the safety of our employees, tenants and customers.
- We anticipate a significant portion of April and May rents will be collected later in 2020 and into 2021 under agreed upon deferral plans.
- We announced significant steps to improve our liquidity position, including drawing down the available amount on our line of credit.
- We have been successful in deferring or halting approximately $60 - $80 million in planned capital expenditures, including redevelopment investments, for 2020.
Challenges Ahead
- The COVID-19 pandemic significantly shifted our expectations for the remainder of the year.
- For the month of April, we received approximately 27% of billed cash rents. We estimate a collection rate for the month of May in the range of 25-30% based on preliminary cash receipts and conversations with retailers.
- The majority of our tenants requested rent relief, either in the form of rent deferrals or abatements.
- We have placed a number of tenants in default for non-payment of rent.
- Negotiations are ongoing, and it is premature to estimate a recovery rate at this time.