CBL Plans Redevelopment of Eastland Mall in Midst of Retail Collapse
Forging ahead with development
The collapse of brick and mortar stores across the US is hitting Bloomington's Eastland Mall. The Mall's owner, CBL Properties, still plans to redevelop the mall.
Eastland Mall owner CBL Properties may soon announce plans to redevelop the mall’s vacant anchor sites. In order to keep up with changing trends, CBL plans to diversify Eastland Mall to offer more than just retail stores.
CBL Marketing Director Melissa Cavanaugh said plans for the former JC Penney location include the addition of a lifestyle and fitness center and new-to-market retail. Cavanaugh also said plans are in the works for the former Macy’s location, with an announcement likely in the coming months.
In March, JCPenney announced the closing of 138 stores nationwide, including the Eastland Mall location, due to declining traffic and sales. Macy’s also closed its doors at Eastland Mall in March.
Although Sears is still operating, the company has closed nearly 400 stores this year between its flagship Sears and Kmart stores. The company is closing another 60 stores in January. Sears disclosed to investors in January 2017 that the company had "substantial doubt" that they would continue to operate. The long-term viability of the Eastland Mall location is unclear.
At the end of last year, Eastland Mall had 94% occupancy rate. The current occupancy rate of the mall—following the closures of both JC Penney and Macy’s—is unknown.
Chattanooga, Tennessee-based CBL owns 119 properties, including 63 malls, across the US. Cavanaugh said CBL has a “long track record of successfully replacing or redeveloping anchor locations,” completing over 20 redevelopment projects since 2013.
For example, the former Sears at CBL-owned CoolSprings Galleria in Franklin, Tennessee now houses The Cheesecake Factory, American Girl and H&M, among other tenants. The Franklin-based Williamson Herald reported the year-long redevelopment project created 160,000 square feet of new retail space at the regional mall.
CBL-owned Janesville Mall in Janesville, Wisconsin also lost its JCPenney in 2014. Since then the mall added Dick’s Sporting Goods and Ulta Beauty, filling about half the former retail space. However, according to Janesville’s GazetteXtra, the mall is now on the market, with indications that a sale may be pending. The Gazette was unable to confirm an impending sale with CBL, The Janesville Mall or the broker that listed the property online.
Earlier this year, CBL announced that it had sold two Tennessee malls, College Square in Morristown and Foothills Mall in Maryville, for a combined $53.5M. Proceeds from the sale went toward CBL’s outstanding debts, according to a press release.
A November 2017 investor presentation stated that the sale of the Tennessee malls marked the end of the company’s “portfolio transformation strategy,” beginning in 2014 and including 20 transactions with a total value of nearly $800 million. More than half of those transactions ($423.1M) were made with CBL’s lenders in exchange for loan forgiveness.
In addition to selling some of its properties, CBL has invested $137M into 19 different malls as part of its redevelopment plan. The company has also added a significant amount of unsecured debt, with $1.375B due between 2023 and 2026, according to the investor presentation. In November The Wall Street Journal reported that the company’s debt was downgraded below investment-grade.
The Wall Street Journal also reported that CBL forfeited its Wausau, Wisconsin property last year. The JCPenney in the Wausau Center closed in 2014, followed by Sears in 2016. The report suggested that closures at the Wausau Center were caused in part by a shift in shoppers’ attentions to Wausau’s Downtown shopping district.
Cavanaugh said it's a different story in Bloomington.
“Each property in CBL’s portfolio has unique characteristics - regionally, demographically, and economically,” said Cavanaugh. “Eastland Mall is located in a dynamic and growing market and we have received excellent demand from new tenants.
Time will tell whether Eastland Mall will be successfully redeveloped by CBL.