Hours after President Trump said Sunday he had "second thoughts" about escalating the trade war with China, the White House sought to explain his remark because it was...Politicsread more
Clouding the G-7 gathering, which represents the world's major industrial economies, are the tit-for-tat tariffs between Washington and Beijing.Politicsread more
President Donald Trump said that he would have a major trade deal with U.K. after it leaves the European Union.Politicsread more
President Donald Trump said Sunday he was not happy after North Korea launched short-range ballistic missiles over the weekend.Politicsread more
The Goldman Sachs technology M&A team, led by Sam Britton, has cashed in on its software focus and decades of experience to dominate 2019's biggest deals.Technologyread more
Carl Medlock used to work at Tesla. Now he's one of the few people in the U.S. that can fix the company's original Roadster electric vehicles.Technologyread more
American small and medium-size companies that rely on China are scrambling to adjust their business plans in response to the escalating trade war.Traderead more
Here are the products that stand to be the most affected by China's new tariffs on $75 billion worth of U.S. goods.Marketsread more
The summit comes amid fears over a global economic slowdown, and U.S. tensions over trade allies, Iran and Russia.Politicsread more
The world's second biggest economy is past a point where it cannot ignore its enormous debt anymore, according to an analyst.China Economyread more
Trump does have some powerful tools that would not require approval from U.S. Congress.Politicsread more
Malls are changing.
As specialty tenants, like Gymboree and Wet Seal, file for bankruptcy, and as department store chains, like Sears and J.C. Penney, scale back their physical footprints, those real estate landlords are left with boxes to fill and room for innovation.
Like its peers, CBL & Associates Properties, a Tennessee-based retail real estate investment trust, has been fighting the idea that malls are "dying."
To be sure, malls have been the worst REIT performers year to date, "as investors have latched onto the negative retail narrative," Boenning & Scattergood analyst Floris van Dijkum wrote in a recent note to clients.
Hedge funds have wagered $6.7 billion, betting against the mall sector, with short interest at a five-year high of 7.6 percent, Dijkum said. "Bears believe cash flows and asset values will be pressured for all retail real estate."
On Thursday, CBL announced that it will be rebranding itself to better fit its strategy in an evolving retail market. The company's full name, CBL & Associates Properties, will be cut to CBL Properties. It's also debuted a new website, and will use updated "communications tools and messaging" to reach investors.
"Our properties are not just about retail or shopping — they serve as gathering places for their respective communities," said CEO Stephen Lebovitz in prepared remarks.
"They are evolving through the addition of more food, entertainment, service, fitness and other new uses and we are actively exploring adding hotels, medical, office, residential and education components," he added.
Lebovitz told analysts earlier this year that CBL has been transforming its real estate into "vibrant town centers." And it's true — more restaurants, grocery stores, gyms and movie cinemas are popping up in malls across America.
At the same time, Boenning & Scattergood's Dijkum pointed out that apparel tenants — which have struggled more than other retail subsets to grow sales — are being "meaningfully reduced and replaced in REIT-owned malls."
His firm estimated that apparel exposure has dropped to 50 percent from 70 percent of mall in-line space over the last eight years. Meantime, "food and entertainment" tenants now take up 10 percent of mall space, up from 5 percent.
General Growth Properties, an Illinois-based mall landlord, is focused on turning some of its mall properties into "mixed-use" developments, even adding residential options, like an apartment complex, atop excess parking lot space. GGP is also working with Germany-based supermarket chain Lidl — a new entrant to the U.S. grocery market — to open Lidl stores at some of GGP's properties.
It's going to take some heavy lifting for retail REITs to convince the Street that there's still life to their properties. CBL hopes its rebrand is a start.
"As technology continues to drive change, CBL must not only adjust its operations to compete and grow market share, but also connect more directly with consumers and other partners," added Lebovitz.
Shares of CBL have fallen more than 25 percent in 2017. GGP's stock is down about 13 percent over the same period, while Simon Property Group, another mall owner, has watched its shares drop more than 8 percent.
"If these [apparel] tenants all go dark at once, it could create a glut of space that mall owners would have to re-tenant," Dijkum said. "However, most malls owners have minimal rental exposure to these tenants."
The obstacle remains convincing Wall Street that a transformation in the mall REIT sector will prove successful.