CBL & Associates Properties, Inc. (
- a real estate investment trust (REIT) - announced its intention
to buy full ownership of an enclosed regional shopping mall -
Kirkwood Mall - located in Bismarck from Radiant Partners. The
acquisition of this second-biggest mall in North Dakota district
will boost CBL's portfolio of high-quality market-dominant
Last month, CBL bought the 49% non-controlling interest in
Kirkwood Mall and inked a deal to gain the remaining 51%
interest. The company will assume a non-recourse loan worth $40.4
million that was securitized through WFRBS Commercial Mortgage
Trust. The debt has a fixed interest rate of 5.75% and matures in
April 2018. The company expects the deal to close within 90 days,
subject to lenders approval of loan assumption.
Developed in 1971, Kirkwood Mall spans 850,000 square feet and is
a premier shopping center. The property is suitably located near
Bismarck Expressway and 7th Street with direct access to I-94.
The mall is also enjoying significantly increasing revenue mainly
due to its proximity to the Bakken Formation oil reserves. In
2012, the sales per square feet at the mal increased over 15% to
over $400 per square feet.
As of September 30, 2012, the mall was 87.9% occupied and
sheltered some industry-leading tenants such as
J. C. Penney Company, Inc. (
Target Corp. (
Chico's FAS Inc. (
, Herberger's and Keating Furniture. Additionally, the mall
offers both near and long-term growth opportunities through low
occupancy cost as well as lease-up of remaining space.
We remain upbeat regarding the acquisition intended as this will
likely benefit the company by capitalizing on the continuous
growth opportunities in the Bismarck market. Moreover, the
ongoing aggressive expansion plans and existing property
extension activity of CBL will prove accretive to its earnings
Accordingly, in November 2012, CBL inked a joint venture with
Horizon Group Properties, Inc. (
for Grand Opening of a 27,800 square-feet expansion at The Outlet
Shoppes at Oklahoma City. Also, last month, the company announced
the 46,000 square-feet expansion of Cross Creek Mall in
CBL is expected to release its fourth-quarter 2012 results on
February 5, 2013. The Zacks Consensus Estimate for the company's
fourth quarter FFO is currently pegged at 58 cents per share.
The Earnings ESP (Expected Surprise Prediction), the percentage
difference between the Most Accurate Estimate and the Zacks
Consensus Estimate, for CBL is positive 3.45%. This, combined
with its Zacks Rank #3 (Hold), reflects that the company will
definitely beat the Zacks Consensus Estimate in the fourth
We presently have a long-term 'Neutral' recommendation on CBL.
Note: FFO, a widely accepted and reported measure of the
performance of REITs, is derived by adding depreciation,
amortization and other non-cash expenses to net income.
CBL&ASSOC PPTYS (CBL): Free Stock Analysis
CHICOS FAS INC (CHS): Free Stock Analysis
(HGPI): ETF Research Reports
PENNEY (JC) INC (JCP): Free Stock Analysis
TARGET CORP (TGT): Free Stock Analysis Report
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