CBL & Associates Q1 2022 Earnings Report
Key Takeaways
CBL Properties reported strong first quarter results with an increase in total portfolio same-center NOI of 10.7%. The company increased its full year 2022 same-center NOI guidance to $416 - $430 million and FFO, as adjusted, per share guidance to a range of $7.18 -$7.67 per diluted share.
Increases in percentage rent and operating expense controls contributed to an increase in total portfolio same-center NOI of 10.7% for the three months ended March 31, 2022, compared with the prior year period.
First quarter outperformance and revised outlook contribute to full year 2022 same-center NOI guidance increasing to $416 - $430 million from prior guidance of $400 - $413 million and FFO, as adjusted, per share guidance increasing to a range of $7.18 -$7.67 per diluted share compared with prior guidance of $7.00 - $7.50 per diluted share.
Portfolio occupancy as of March 31, 2022, was 88.3%, representing a 290-basis point improvement compared with 85.4% as of March 31, 2021. Same-center occupancy for malls, lifestyle centers and outlet centers was 86.5% as of March 31, 2022, representing a 330-basis point improvement compared with 83.2% as of March 31, 2021.
Same-center sales per square foot for the trailing 12-months ended March 31, 2022, increased 12.6% as compared to the trailing 12-months (excluding 2020) ended March 31, 2021. Same-center sales per square foot for the first quarter 2022 increased 0.9% as compared with the first quarter 2021.
CBL & Associates
CBL & Associates
CBL & Associates Revenue by Segment
Forward Guidance
After incorporating results for the first quarter 2022 and Management’s revised full year outlook, CBL is providing updated guidance for 2022 FFO, as adjusted, in the range of $222 million - $237 million or $7.18 - $7.67 per diluted share, which assumes same-center NOI in the range of $416.0 million to $430.0 million.
Positive Outlook
- New rent from stores that opened in 2021 or expected to open in 2022 and net increases from existing tenants including contractual rent bumps and variable rent.
- Improved expectation following first quarter results, including higher expected percentage rents, and stronger leasing momentum.
- Improved expectation due to lower stores closures in 2022 following positive tenant sales and stronger leasing activity year-to-date.
- Improved expectation following strong leasing activity year-to-date.
- Improved expectation of operating expense for 2022 following first quarter results and expense management.
Challenges Ahead
- Represents rent lost in 2022 related to stores that terminated leases in 2021.
- Represents rent lost in 2022 related to stores that closed for a partial year in 2021 or are expected to close before year-end 2022.
- Impact of negative rent spreads related to renewals or lease modifications completed in 2021 and budgeted for 2022.
- Increases in operating expenses are primarily driven by the return to normal operating hours versus the shortened operating hours in 2021 due to the impact of COVID, higher contract wage rates (security/janitorial) due to the tight labor market and inflation and higher maintenance and repair expense related to projects that were delayed in 2021, primarily due to labor shortages.
- Represents credit loss related to tenants that may file for bankruptcy and/or close stores due to underperformance.
Revenue & Expenses
Visualization of income flow from segment revenue to net income