CBL & Assoc. Spends $21M on Partnership Units

CHATTANOOGA, TN-CBL & Associates Properties Inc. has repurchased 460,083 common units of its operating partnership for approximately $21 million. The repurchase increases CBL’s interest in the operating partnership to 54.5% and management’s ownership interest to 19.9%. Following the repurchase, the total number of units outstanding is approximately 55.4 million.

The acquired partnership units represent remaining interests of a former executive of the Company who retired in 1997. The $45.15 per-unit repurchase price represented a 3.5% discount off of the trailing five-day average of the closing price on the New York Stock Exchange of the Company’s common stock from July 28. On Tuesday, shares of CBL were trading at $49.95, off $0.15 from Monday’s close but still within $0.60 of the company’s 52-week high.

CBL has 57 enclosed regional malls in its 61.1-million-sf portfolio of 163 properties in 25 states, which includes 2.6 million sf of non-owned shopping centers managed for third parties. The Company also has four projects under construction totaling approximately 1.6 million sf.

On Sept. 3, responding to a report that CBL and Australia-based Galileo Funds Management have retained Merrill Lynch to raise up to A$500 million to form a property trust that would be listed on the Australian Stock Exchange, the company acknowledged that it is “exploring a transaction with an Australia-based real estate company that would involve the company’s existing community center portfolio,” adding that the contemplated transaction “would not involve any of the company’s regional malls and associated centers nor affect its development programs.” In its March annual report, CBL reported owning a controlling interest in 61 community centers with a combined leasable area of 5.1 million sf and an average occupancy of 94.7%.

On the acquisition side, CBL last week said it has begun closing on a $340-million acquisition of four regional malls from partnerships managed by Faison Enterprises, a Charlotte, NC-based real estate holding company. The four malls, three in Virginia and one in North Carolina, range in size from 626,806 sf to 1.05 million sf. The transaction includes the assumption of $170 million in non-recourse fixed-rate debt with an average interest rate of 7.71%, while the properties are expected to generate an initial yield of 8.56%.