REIT CBL & Associates Attracts Activist Investor

September 26, 2019 | Activist Updates, News

Beleaguered mall REIT CBL & Associates Properties (CBL) has attracted an activist investor.

Mall REIT CBL & Associates could face pressure in the board room. Noted distressed debt and restructuring investor Michael Ashner has filed a 14D stating that he now owns 5.97% of the REIT.

In the filing, Ashner says his firm “purchased the securities of the Issuer based on the Reporting Persons’ belief that such securities, when purchased, were undervalued and represented an attractive investment opportunity.”

He goes onto state that he intends to discuss matters with Board members and executives. These issues include the underperformance of the shares and possible strategic alternatives.

REIT CBL & Associates and an Activist

In an interview after the filing,  Ashner said, “CBL has a long runway to transform the properties for the 21st-century consumer. We are seriously hopeful that we can work together with management to exploit all the opportunities for shareholders that we see here.”

CBL has been trying to revamp the portfolio by selling underperforming malls and repurposing many properties. In their Chattanooga Hamilton Place Mall, it has partnered to develop a hotel in a former Sears property.

CBL has added entertainment options to many malls. It hopes to stimulate traffic, drive revenues, and hopefully raise profits. The company recently announced that it executed leases with entertainment users for approximately 825,000 square feet.

In a press release BBL said, “The scope of entertainment users that CBL is adding to its portfolio include nationally known names like Round1 Bowling and Amusement, Dave & Buster’s and Main Event as well as regional operators such as WhirlyBall and High Caliber Karting & Entertainment. CBL is also adding casinos as part of anchor redevelopment projects at two properties in Pennsylvania.”

The Company’s 2019 Struggles Continue

REIT CBL & Associates has seen it is stock price fall by more than 60% in the past year. The company has struggled to deal with the tertial apocalypse that has hit malls around the country.

So far this year, the company has sold 120.2 million in asset sales. These divestitures include the sale of a community center, an office building, and a hotel to raise cash. It is also keeping the remaining locations open and funding the repurposing of these malls.

Currently, the firm owns 108 properties totaling 68.2 million square feet across 26 states.

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