CBL Acquires 980,000 SF for $78M

AKRON, OH-CBL & Associates Properties Inc. is the new owner of the 862,000-sf Chapel Hill Mall and the associated 117,000-sf Chapel Hill Suburban retail center. The publicly traded shopping center investor from Chattanooga, TN, acquired the assets from Cleveland, OH-based Forest City Enterprises for $78.1 million, according to an SEC filing on the matter. The investment will generate an initial yield of 8.3% based upon current income. CBL has financed $66.5-million of the purchase price at 100 basis points over Libor.Chapel Hill Mall was built in 1966 an upgraded in 1995. The one-story mall is located on 80 acres at the southwest intersection of Howe and Brittain roads, with access to State Route 8 approximately one mile to the west. JCPenney, Kaufmann’s and Sears anchor Chapel Hill Mall, which has about 100 additional retailers. Value City and HH Gregg anchor Chapel Hill Suburban.Chapel Hill Mall is currently 85.6% occupied with average mall shop sales of $307 per sf in 2003, and Chapel Hill Suburban is 100% occupied. According to CBL, the properties are “the primary retail focal point of eastern Akron” and are “relatively insulated from other malls by geography, the road network and distance, located over thirty miles from Cleveland.” The 85% financing has an initial two-year term and three one-year extension options, according to the SEC filing. With 67.3 million sf in 166 properties in 27 states, CBL is one of the top five owners of shopping centers in North America and the largest owner of malls and shopping centers in the Southeast, ranked by GLA owned.