8-K: CBL Properties Reports Strong Q4, Full-Year 2025 Results

CBL Properties announced outstanding financial and operational results for the fourth quarter and full-year ended December 31, 2025, with FFO and NOI near the high-end of guidance.

Summary

• Q4 2025 FFO, as adjusted, per share was $2.25, compared with $1.92 per share for the prior-year period.
• Full-year 2025 FFO, as adjusted, per share was $7.21, compared with $6.69 for the year ended December 31, 2024, with full-year results near the high-end of the guidance range.
• Same-center Net Operating Income (NOI) for Q4 2025 increased 3.3% compared with the prior-year period, and grew 0.5% for the full year 2025.
• Same-center occupancy for malls, lifestyle centers, and outlet centers was 88.6%, flat from the prior year-end.
• Portfolio occupancy declined 30 basis points to 90.0% as of December 31, 2025, primarily due to bankruptcy-related store closures (approximately 107,000 square feet).
• Over 4.0 million square feet of leases were executed in 2025, including 2.4 million square feet of comparable new and renewal leases signed at a 2.6% increase in average rents.
• In Q4 2025, comparable new and renewal leases (759,000 square feet) saw a 2.9% decline in average rents, driven by mall renewal spreads of (5.3)% partially offset by a nearly 15% increase in spreads on new mall leases.
• Same-center tenant sales per square foot for Q4 2025 increased approximately 3.7%, and for the full year 2025, sales were $437, up 2.8%.
• The company had $335.4 million of unrestricted cash and marketable securities as of December 31, 2025.
• Dispositions in 2025 generated approximately $240.7 million of gross proceeds, including the sale of Fremaux Town Center for $30.77 million cash proceeds and elimination of $35.0 million debt.
• Acquired four dominant enclosed regional malls for $178.9 million from Washington Prime Group.
• Initiating FFO, as adjusted, guidance for 2026 in the range of $6.74 $7.06 per share, and anticipates same-center NOI for full-year 2026 in the range of (1.2)% to 1.1%.
• A cash dividend of $0.45 per common share was announced for the quarter ending March 31, 2026, equating to an annual dividend of $1.80 per share.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a generally positive report, demonstrating strong operational performance and proactive balance sheet management, despite some occupancy challenges and anticipated property returns. The guidance for 2026, while slightly lower on FFO, reflects a realistic approach to ongoing portfolio optimization.

Positives

• Q4 2025 FFO, as adjusted, per share increased to $2.25 from $1.92 in the prior-year period.
• Full-year 2025 FFO, as adjusted, per share increased to $7.21 from $6.69 in 2024, near the high-end of guidance.
• Q4 2025 same-center NOI increased 3.3% compared to the prior-year period.
• Full-year 2025 same-center NOI grew 0.5%, meeting the high-end of guidance.
• Same-center occupancy for malls, lifestyle, and outlet centers remained flat at 88.6% year-over-year.
• Executed over 4.0 million square feet of leases in 2025, with comparable new and renewal leases signed at a 2.6% increase in average rents.
• New mall leases in Q4 2025 saw a nearly 15% increase in spreads compared to expiring rents.
• Same-center tenant sales per square foot for Q4 2025 increased approximately 3.7%.
• Full-year 2025 same-center tenant sales per square foot increased 2.8% to $437.
• Generated approximately $240.7 million of gross proceeds from dispositions in 2025.
• Acquired four dominant enclosed regional malls for $178.9 million at mid-teens cap rates.
• Successfully extended the maturity of its non-recourse term loan to November 2026, with anticipation of a further extension to November 2027.
• Closed on a new $43.0 million loan for The Pavilion at Port Orange with a 160-bps interest rate improvement (5.9% fixed vs 7.57%).
• Reduced principal balance by $5.0 million and extended maturity to August 2028 for Coastal Grand and Crossing loan, improving the initial effective fixed interest rate to 5.09%.
• Closed on a new $78.0 million loan for Cross Creek Mall, improving the rate by over 130 bps (6.856% fixed vs 8.19%).
• Authorized a new stock repurchase program for up to $25 million, replacing the prior program, and acquired 573,998 shares for $18.0 million in 2025.

Negatives

• FFO per diluted share for Q4 2025 was $1.91, a decline from $2.42 in Q4 2024.
• Portfolio occupancy declined 30 basis points to 90.0% as of December 31, 2025, from 90.3% in 2024.
• Bankruptcy-related store closures (Forever21, JoAnn, Claire's, Party City) negatively impacted mall occupancy by nearly 75 basis points (107,000 square feet).
• Comparable new and renewal leases in Q4 2025 saw a 2.9% decline in average rents versus prior rents.
• Mall renewal spreads in Q4 2025 declined by (5.3)%, impacted by maturing leases with higher occupancy costs.
• Total operating expense for the year ended December 31, 2025, increased $6.0 million, driven by one-time real estate/franchise tax refunds in the prior year and higher utility/maintenance expenses.
• Percentage rents declined by $1.3 million for the full year.
• Southpark Mall was placed into receivership in July 2025 and deconsolidated due to loss of control, secured by a $48.3 million non-recourse loan.
• The company anticipates returning properties to lenders for Jefferson Mall ($48.99 million), Arbor Place Mall ($85.5 million), and The Outlet Shoppes at Gettysburg ($19.4 million) in satisfaction of debt.
• The Outlet Shoppes at Gettysburg loan was in maturity default in October 2025, and the company anticipates returning the property to the lender.
• Jefferson Mall loan was in default subsequent to December 31, 2025, and the company anticipates returning the property to the lender.
• 2026 guidance for same-center NOI is a range of (1.2)% to 1.1%, indicating potential negative growth.
• 2026 FFO, as adjusted, guidance of $6.74 $7.06 per share is lower than the $7.21 achieved in 2025.

Risks

• Bankruptcy-related store closures (Forever21, JoAnn, Claire's, Party City) negatively impacting mall occupancy.
• Decline in average rents for comparable new and renewal leases in Q4 2025, particularly mall renewal spreads.
• Potential for increased operating expenses in 2026.
• Unbudgeted reserve for tenants that may file for bankruptcy/close stores in 2026.
• Estimated impact of a variance in the estimate for uncollectable revenues in 2026.
• Properties under major redevelopment or being considered for repositioning, where the company intends to renegotiate debt terms or return the property to the lender (e.g., Arbor Place Mall, Jefferson Mall, The Outlet Shoppes at Gettysburg).
• Southpark Mall was placed into receivership and deconsolidated due to loss of control, indicating potential loss of asset.
• Loans in maturity default or default (The Outlet Shoppes at Gettysburg, Jefferson Mall) with anticipation of returning properties to lenders.
• Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy.

Future Outlook

CBL Properties is initiating FFO, as adjusted, guidance for 2026 in the range of $6.74 $7.06 per share. Management anticipates same-center NOI for full-year 2026 in the range of (1.2)% to 1.1%. The company is focused on further strengthening its balance sheet, pursuing portfolio optimization, and sustaining operational momentum to drive improvements in occupancy and rent.

Management Comments

• "2025 was an exceptional year for CBL, with strong operating performance and meaningful progress on our key strategic priorities." Stephen D. Lebovitz, CEO.
• "We were particularly proud of the more than 34% total return to shareholders for the year including $2.50 per share in total dividends." Stephen D. Lebovitz, CEO.
• "Operationally, our portfolio performed strongly, highlighted by fourth-quarter same-center NOI growth of 3.3% and full year growth of 50 bps, at the high-end of our guidance range." Stephen D. Lebovitz, CEO.
• "While bankruptcy-related store closures offset occupancy gains, leasing momentum remained solid with nearly 1.3 million square feet signed in the fourth quarter and strong demand from tenants such as Barnes & Noble, Carhartt, and Total Wine." Stephen D. Lebovitz, CEO.
• "The positive holiday sales season contributed to full-year tenant sales growth of approximately 3%." Stephen D. Lebovitz, CEO.
• "We also made major progress improving our balance sheet and positioning our company for solid cash flow generation and long-term growth." Stephen D. Lebovitz, CEO.
• "We generated approximately $240 million of disposition proceeds at attractive valuations in 2025. In addition to reducing leverage, we redeployed this capital into the acquisition of four dominant enclosed malls at mid-teens cap rates, further strengthening our position as the preeminent owner and operator of successful enclosed malls in dynamic middle markets." Stephen D. Lebovitz, CEO.
• "We financed this transaction by expanding our existing loan with Beal Bank, improving the terms and extending the maturity. Our balance sheet also benefited from a number of notable loan transactions in 2025, including the extension of our term loan maturity, the closing of a new $78 million non-recourse loan secured by Cross Creek Mall in Fayetteville, NC, improving the rate by more than 130 bps, and the closing of a new $43.0 million loan secured by The Pavilion at Port Orange in Port Orange, FL, which generated a more than 160-bps improvement in the rate." Stephen D. Lebovitz, CEO.
• "As we look ahead to 2026, we are focused on building on the progress achieved in 2025 by further strengthening our balance sheet, pursuing our portfolio optimization strategy to enhance the quality and growth profile of our assets, and sustaining operational momentum to drive improvements in occupancy and rent." Stephen D. Lebovitz, CEO.
• "We have made incredible progress in recent years in positioning CBL to take advantage of opportunities in our industry and to continue creating significant return of capital and value for our shareholders." Stephen D. Lebovitz, CEO.

Industry Context

StockSavvy.ai notes that CBL Properties' focus on acquiring dominant enclosed malls in "dynamic middle markets" and divesting non-core assets aligns with a broader trend in the retail real estate sector where well-located, high-performing malls are outperforming weaker, less differentiated properties. The challenges with occupancy due to bankruptcy-related store closures reflect ongoing pressures on brick-and-mortar retail, but the strong tenant sales growth and positive leasing momentum for new mall leases suggest resilience in specific segments of the market. The proactive debt management and refinancing efforts are crucial in the current interest rate environment, demonstrating a strategic approach to capital structure optimization.

Comparison to Industry Standards

• CBL's full-year 2025 same-center NOI growth of 0.5% is modest but positive, especially when compared to some struggling mall REITs that have reported negative NOI growth or significant declines in occupancy. For instance, some regional mall operators have seen NOI declines of 2-5% in recent periods.
• The 2.6% increase in average rents for comparable new and renewal leases for the full year 2025 is a solid performance, particularly given the challenging retail environment. This compares favorably to some peers who might be offering significant rent concessions to maintain occupancy.
• The decline in Q4 2025 mall renewal spreads by (5.3)% indicates specific challenges in retaining certain tenants at previous rates, which is a common pressure point across the mall industry, where older leases often need to be re-priced to current market conditions.
• The acquisition of four regional malls at "mid-teens cap rates" suggests a strategy of acquiring value-add properties, potentially at higher yields than prime assets in major metropolitan areas, which aligns with a strategy seen in other opportunistic real estate investors.
• The 2026 FFO guidance of $6.74 $7.06 per share, while lower than 2025, reflects a realistic outlook given potential headwinds and the company's ongoing portfolio adjustments, contrasting with companies that might project overly optimistic growth without clear drivers.

Legal Proceedings

• A credit to litigation settlement expense related to claim amounts released pursuant to the terms of a class action lawsuit settlement.

Stakeholder Impact

• Shareholders: Positive impact from strong operating performance, 34% total return in 2025, $2.50 per share in total dividends, and a new $0.45 quarterly dividend. Stock repurchase program also benefits shareholders.
• Creditors: Positive impact from proactive debt management, refinancing at improved rates, and maturity extensions, reducing immediate refinancing risk. However, some properties are being returned to lenders, indicating potential losses for those specific lenders.
• Tenants: Mixed impact; some new and renewal leases saw rent increases, while others (mall renewals) experienced declines, suggesting a dynamic and competitive leasing environment. Bankruptcy-related closures indicate challenges for some tenants.
• Employees: No direct impact mentioned, but a healthy company generally provides more stable employment.

Next Steps

• Further strengthening the balance sheet.
• Pursuing portfolio optimization strategy to enhance asset quality and growth profile.
• Sustaining operational momentum to drive improvements in occupancy and rent.
• Meeting the second extension test for the non-recourse term loan (principal balance of $615 million) in November 2026 to enable another one-year extension to November 2027.
• Cooperating with lenders to facilitate foreclosure or conveyance of Jefferson Mall, Arbor Place Mall, and The Outlet Shoppes at Gettysburg in satisfaction of debt.
• Payment of $0.45 per common share dividend on March 31, 2026.

Key Dates

Recommendation

CBL Properties delivered strong operational results for 2025, exceeding guidance for FFO and NOI, and demonstrated proactive balance sheet management through strategic dispositions, acquisitions, and debt refinancing. The dividend declaration and stock repurchase program are positive for shareholders. However, the 2026 FFO guidance is lower than 2025, and the potential for negative same-center NOI growth, coupled with ongoing challenges from tenant bankruptcies and the planned return of several properties to lenders, introduces headwinds. While the company is making progress in optimizing its portfolio and strengthening its financial position, these factors suggest a "hold" recommendation as the market digests the mixed outlook and the execution of the portfolio optimization strategy unfolds.

Keywords

CBL Properties, CBL, REIT, Retail Real Estate, Shopping Malls, Financial Results, Earnings, FFO, NOI, Occupancy, Leasing Activity, Tenant Sales, Dispositions, Acquisitions, Debt Management, Stock Repurchase, Guidance, Q4 2025, Full Year 2025, 2026 Outlook, Commercial Real Estate