CBL announces plans for former JC Penney properties, sees opportunity
CBL & Associates Properites (CBL) has announced redevelopment plans for the JC Penney (JCP) locations set to close in 2014. Stephen Lebovitz commented:
“While we have been encouraged by JCPenney’s recent improvements in sales and traffic, we have been anticipating certain store closures to occur. As we said in our most recent earnings call, we have been proactively engaging in discussions and gauging retail demand with this in mind and are pleased to announce strong interest for the locations expected to close in 2014. Our next steps will be to move forward with negotiations with retailers and finalize redevelopment plans. Once leases are signed, we will share specific retail names joining each mall, as well as construction and opening timelines. The list of retailers interested in these specific locations includes sporting goods, arts and crafts and other box retailers, as well as a traditional department store for one location, all of which will enhance the performance of the malls overall.”
JCPenney announced its intention to close four locations in the CBL portfolio at Hickory Point Mall in Forsyth, IL, Janesville Mall in Janesville, WI, Wausau Center in Wausau, WI, and Northgate Mall in Chattanooga, TN. CBL anticipates store closures to occur in the second quarter. Three locations are leased from CBL.
CBL has clearly been anticipated closures for big box retailers like JC Penney (JCP) and is prepared. Later on Lebovitz says:
“As part of our review process, we analyzed the co-tenancy provisions in small shops leases at these properties and determined that the financial exposure is immaterial. The significant and diverse retail demand for each location demonstrates the strength and resilience of our dominant mall properties. We look forward to the improved growth rates generated from these enhancements.”
It sounds like CBL is looking forward to the opportunity tennants like JC Penney leaving posed. We've seen mention in other Mall Reit earnings that the space is highly desired despite the slow down for stores like JC Penney and this is just more evidence of it. “Today, other than locations under redevelopment, CBL has no vacant anchor locations in its core portfolio.”