UPDATE: CBL & Assoc. Properties (CBL) reports Q1 FFO of $0.26, estimates collection rate for the month of May in the range of 25-30%
CBL & Assoc. Properties (NYSE: CBL) reported Q1 FFO of $0.26, versus $30.00 reported last year. Revenue for the quarter came in at $167.6 million, versus $198.03 million reported last year.
“While first quarter results were largely as anticipated, the COVID-19 pandemic significantly shifted our expectations for the remainder of the year,” said Stephen D. Lebovitz, Chief Executive Officer. “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.
“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. We anticipate a significant portion of April and May rents will be collected later in 2020 and into 2021 under agreed upon deferral plans. However, negotiations are ongoing, and it is premature to estimate a recovery rate at this time.
“Our priority during this time of uncertainty has been to preserve cash. We announced significant steps to improve our liquidity position, including drawing down the available amount on our line of credit. In addition, we instituted a significant cost reduction program. We have been successful in deferring or halting approximately $60 - $80 million in planned capital expenditures, including redevelopment investments, for 2020. While we have paused several major projects, we are pursuing capital lite solutions for backfilling our remaining available anchors, including joint venture partnerships, favorable lease structures and third-party arrangements – all of which benefit our portfolio while preserving capital. Additionally, we were able to achieve debt service payment deferrals for a portion of our secured loans. Securitized lenders in general have shown minimal flexibility in amending loan payments.
“We have addressed nearly all of our major debt maturities for 2020 and are in discussions with existing lenders for certain 2021 secured loan maturities. As a reminder, we have no significant unsecured debt maturities until December 2023, and have time to evaluate the optimal financial roadmap for CBL. We are being proactive to determine the best strategies for addressing these future maturities and significantly reducing leverage.”
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