Exhibit 99.1
[CBL & ASSOCIATES PROPERTIES, INC. LETTERHEAD]
Investor Contact: Katie Reinsmidt Media Contact: Deborah Gibb
Director of Investor Director of Corporate
Relations Relations
(423) 490-8301 (423) 490-8315
CBL & ASSOCIATES PROPERTIES TO ACQUIRE THREE-MALL
PORTFOLIO FOR $516.9 MILLION
CHATTANOOGA, Tenn. (October 17, 2005) - CBL & Associates Properties, Inc. (NYSE:
CBL) today announced that it has entered into a definitive agreement to acquire
three malls from a group of investors advised by Eastdil Realty Company. CBL
will purchase Oak Park Mall in Overland Park (Kansas City), KS; Hickory Point
Mall in Decatur, IL; and Eastland Mall in Bloomington, IL, for a total
consideration of approximately $516.9 million, including estimated closing
costs. The transaction is expected to close in November, subject to the
Company's completion of due diligence and other customary closing conditions.
The initial blended cap rate, based on income in place and after management fees
and a structural reserve, is estimated at 5.7%.
The Company will fund the acquisition through $79.3 million of cash,
assumption of approximately $386.0 million of new long-term, fixed-rate
non-recourse mortgage debt and the issuance of $51.7 million in Special Common
Units (SCUs) of the Company's Operating Partnership. The Company expects to
issue approximately 1.09 million SCUs at a value of $47.50 per unit. The SCUs
will pay a dividend at a rate of 6.0% of the issue price for the first two years
following the close of the transaction and 6.25% thereafter.
"Each property offers numerous possibilities to grow income and sales and
we are excited to add these three, market-dominant malls to our portfolio. The
prospects for near-term and long-term income growth at the properties include
increases in occupancy, enhancement of the current specialty leasing program,
and redevelopment and expansion opportunities," said Charles B. Lebovitz,
chairman and chief executive officer of CBL & Associates Properties, Inc. "Oak
Park has a reputation as one of the premier malls in the United States and both
Hickory Point and Eastland draw from very impressive trade areas with their
nearest competition over 40 miles away. Our leasing and development teams are
excited to begin their efforts on these three malls, and we look forward to
achieving the long-term potential of these malls."
Oak Park Mall is the leading shopping, dining and entertainment destination
in the greater Kansas City area, and is located near Interstates 35 and 435 on
West 95th Street at Quivera in Overland Park, KS. The City of Overland Park is
one of Kansas City's fastest growing suburbs with the five-year growth average
approaching 10.0% and average income levels 38.0% above the national average.
The 1.5 million-square-foot, two-level, super-regional mall is currently 96.8%
occupied and provides shoppers with approximately 470,000 square feet of mall
shop retailers, including Ann Taylor, Aveda, Banana Republic, Crabtree & Evelyn,
J. Crew, and many more. Originally built in 1974, the mall was expanded in 1998
and fully renovated in 2001. Average mall shop sales were $455 per square foot
in 2004. The mall is anchored by Dillard's North, Dillard's South, Nordstrom,
JCPenney, and The Jones Store. Oak Park Mall is a popular entertainment and
dining destination for Overland Park residents, boasting a Rain Forest Cafe,
Mimi's Cafe, Outback Steakhouse, Ruby Tuesday's, T.G.I. Friday's, and a
freestanding AMC Theater.
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CBL to Acquire Three-Mall Portfolio
Page 2
October 17, 2005
Eastland Mall is located at the intersection of Business I-55 and East
Empire Street in the rapidly expanding city of Bloomington, IL. Bloomington is
located in central Illinois, approximately 130 miles southwest of Chicago and is
home to two major universities and three hospitals. The 737,000-square-foot,
single-level mall was built in 1967 and most recently renovated in 2000. The
mall is anchored by Bergner's, Famous Barr, Kohl's, JCPenney, and Sears and
offers more than 225,000 square feet of mall shop retailers. Eastland mall
produced mall shop sales of $322 per square foot in 2004 and is currently 85.8%
occupied.
Hickory Point Mall is located in Forsyth (Decatur), IL, near US Route 51
and Interstate 72. Decatur serves as the medical and financial hub to a broad
agricultural trade area. Originally built in 1977, the 743,000-square-foot mall
was last renovated in 2000. Hickory Point's five anchors include Bergner's,
JCPenney, Kohl's, Sears, and Von Maur. The mall includes more than 243,000
square feet of mall shops, which produced $201 in sales per square foot in 2004.
Hickory Point is currently 68.0% occupied.
CBL is the fourth largest mall REIT in North America and the largest owner
of malls and shopping centers in the Southeast, ranked by GLA. CBL owns, holds
interests in or manages 124 properties, including 73 regional malls/open-air
centers. The properties are located in 24 states and total 68.0 million square
feet including 2.0 million square feet of non-owned shopping centers managed for
third parties. CBL currently has six projects under construction totaling 1.1
million square feet including an open-air shopping center located in Ft. Myers,
FL, three community centers and two expansions. In addition to its office in
Chattanooga, TN, CBL has a regional office in Boston (Waltham), MA. Additional
information can be found at cblproperties.com.
Information included herein contains "forward-looking statements" within
the meaning of the federal securities laws. Such statements are inherently
subject to risks and uncertainties, many of which cannot be predicted with
accuracy and some of which might not even be anticipated. Future events and
actual events, financial and otherwise, may differ materially from the events
and results discussed in the forward-looking statements. The reader is directed
to the Company's various filings with the Securities and Exchange Commission,
including without limitation the Company's Annual Report on Form 10-K and the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" incorporated by reference therein, for a discussion of such risks
and uncertainties.
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