CBL Properties Acquires Joint Venture Partner’s Interest in Three of Its Top Properties

Rhea-AI Summary

CBL Properties (NYSE: CBL) has acquired its partner's 50% joint venture interests in three major malls for $22.5 million in cash: CoolSprings Galleria (Nashville), Oak Park Mall (Kansas City), and West County Center (St. Louis). The transaction includes assuming $266.7 million in non-recourse loans secured by the properties. CBL has also extended loan terms for West County Center (to December 2026) and Oak Park Mall (to October 2030, 5% fixed rate). CoolSprings Galleria's existing financing has a 4.84% interest rate, maturing in May 2028.

Positive

• Full ownership acquisition of three high-performing mall properties
• Immediately accretive transaction
• Secured favorable loan extensions for two properties
• Competitive fixed interest rates (5% for Oak Park Mall, 4.84% for CoolSprings)
• Enhanced control over property development and future financial gains

Negative

• Assumed $266.7 million in additional debt obligations
• Required $22.5 million cash outlay

Insights

Real Estate Investment Analyst

This acquisition represents a strategic consolidation play by CBL Properties, gaining full ownership of three premium retail assets for a relatively modest cash outlay of $22.5 million. The deal structure is particularly noteworthy - while assuming $266.7 million in non-recourse loans, the secured financing terms are quite favorable in the current high-rate environment, with Oak Park Mall locked at 5% until 2030 and CoolSprings Galleria at 4.84% until 2028.

The transaction's value proposition is compelling: CBL gains complete control over three high-performing malls while maintaining conservative leverage through property-specific non-recourse debt. The immediate accretion to earnings and cash flow is enhanced by the ability to capture 100% of the upside from planned densification initiatives, particularly at CoolSprings Galleria. For a REIT with a market cap around $900 million, this $22.5 million investment to double their economic interest in premium assets represents efficient capital allocation.

Portfolio Manager

The strategic timing and structure of this deal warrant attention. In an era where many question the future of traditional malls, CBL is doubling down on three of its strongest performing assets at what appears to be an attractive valuation. The $22.5 million cash consideration for 50% ownership implies these properties are being valued well below replacement cost, considering the scale and quality of these regional malls.

The secured debt terms are particularly advantageous - locking in fixed rates below current market levels provides significant interest expense certainty and potential savings over the next 4-7 years. The non-recourse nature of the loans also limits CBL's corporate-level risk while the extended maturities provide ample runway for value-creation initiatives. This transaction effectively increases CBL's exposure to three of its best assets while maintaining balance sheet flexibility.

CoolSprings Galleria in Nashville, TN, Oak Park Mall in Kansas City, KS, and West County Center in St. Louis, MO, Now Wholly Owned by CBL

CHATTANOOGA, Tenn.--(BUSINESS WIRE)-- CBL Properties (NYSE: CBL) today announced that it had closed on the acquisition of its partner’s 50% joint venture interests in CoolSprings Galleria in Nashville, TN, Oak Park Mall in Kansas City, KC, and West County Center in St. Louis, MO. The interests were acquired for a total cash consideration of $22.5 million. CBL also assumed an aggregate $266.7 million in three non-recourse loans, secured individually by each of the assets.

“We are pleased to gain full control of these high-performing assets, which will allow us to more fully execute our vision for growth as well as reap 100% of the future financial gains,” said Stephen D. Lebovitz, CBL’s Chief Executive Officer. “These malls are among the most productive properties in our portfolio and owning 100% of them is a major step forward for CBL. The transaction is immediately accretive and provides both near and long-term value-creation opportunities, most notably the comprehensive densification plans which are underway at CoolSprings Galleria. In addition to this transaction, we have also completed the extension of the non-recourse loans secured by West County Center, (to December 2026, at the existing interest rate) and Oak Park Mall, (to October 2030, at a 5% fixed interest rate). CoolSprings Galleria enjoys favorable in-place non-recourse financing with an interest rate of 4.84% that matures in May 2028.”

About CoolSprings Galleria

CoolSprings Galleria is a more than one million square-foot super-regional shopping destination featuring more than 150 stores including Apple, American Girl, The Cheesecake Factory, Connors Steak & Seafood, H&M, Kings Dining & Entertainment, Pottery Barn, and Williams-Sonoma. CoolSprings Galleria is anchored by Belk, Dillard’s, JCPenney and Macy’s and is conveniently located off I-65 at exits 68 and 69, just fifteen miles south of Nashville. Recent additions to the center include Garage, The Normal Brand, and Barnes & Noble, with Primark opening at the center in 2025. For additional information, find us on Facebook at www.Facebook.com/CoolSpringsGalleria follow us on Twitter @ShopCoolSprings or visit www.CoolSpringsGalleria.com.

About Oak Park Mall

Oak Park Mall is conveniently located in Overland Park, Kansas, just off of Highway 69 at West 95th Street. The shopping center is the exclusive home in the Kansas City metro area to Nordstrom, LUSH, Oakley, and more than 185 specialty stores, boutiques and eateries. For more information find us on Facebook at www.facebook.com/OakParkMall or visit www.ShopOakParkMall.com.

About West County Center

West County Center is the premier shopping destination in the St. Louis region. It features a broad mix of exceptional retail and restaurants including Apple, lululemon, California Pizza Company, Dry Goods, Garage, J. Gilberts Wood Fired Steaks and Seafood, Nordstrom, Sephora and more. The center is located conveniently at the intersection of I-270 and Manchester Road. For more information, find us on Facebook at www.facebook.com/WestCountyCenter or visit www.ShopWestCountyCenter.com.

About CBL Properties

Headquartered in Chattanooga, TN, CBL Properties owns and manages a national portfolio of market-dominant properties located in dynamic and growing communities. CBL’s owned and managed portfolio is comprised of 91 properties totaling 57.7 million square feet across 21 states, including 55 high-quality enclosed malls, outlet centers and lifestyle retail centers as well as more than 30 open-air centers and other assets. CBL seeks to continuously strengthen its company and portfolio through active management, aggressive leasing and profitable reinvestment in its properties. For more information visit cblproperties.com.

Information included herein contains “forward-looking statements” within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual events, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. The reader is directed to the Company’s various filings with the Securities and Exchange Commission, including without limitation the Company’s Annual Report on Form 10-K and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included therein, for a discussion of such risks and uncertainties.

CBL_Corp

View source version on businesswire.com: https://www.businesswire.com/news/home/20241223155336/en/

Investor Contact: Katie Reinsmidt, Executive Vice President & Chief Operating Officer, 423.490.8301, Katie.Reinsmidt@cblproperties.com

Source: CBL Properties

FAQ

How much did CBL Properties pay for the 50% joint venture interests in the three malls?

CBL Properties paid $22.5 million in cash for the 50% joint venture interests in CoolSprings Galleria, Oak Park Mall, and West County Center.

What is the total debt CBL assumed in the mall acquisitions?

CBL assumed $266.7 million in non-recourse loans secured individually by the three properties.

What are the loan terms for Oak Park Mall after CBL's acquisition?

The loan for Oak Park Mall was extended to October 2030 with a 5% fixed interest rate.

What are the financing terms for CoolSprings Galleria under CBL's ownership?

CoolSprings Galleria has in-place non-recourse financing with a 4.84% interest rate, maturing in May 2028.

Which three malls did CBL Properties acquire full ownership of?

CBL acquired full ownership of CoolSprings Galleria in Nashville, TN, Oak Park Mall in Kansas City, KS, and West County Center in St. Louis, MO.