CBL's FFO Up 26%

CHATTANOOGA, TN-CBL & Associates Inc. ends 2005 with increases in revenue, FFO, earnings, same-store NOI and occupancy. “In 2005, our focus and hardwork paid off, allowing CBL to post another strong year,” said CBL’s president Stephen Lebovitz during the REIT’s earnings conference call.Total revenues increased 16.3% in 2005 to $908.7 million from $781 million in 2004. FFO increased 25.6% to $390 million during the 12-month period ending Dec. 31, 2005 from $310 million for the same period in 2004. FFO per share increased 23.2% on a diluted basis to $3.34 from $2.71 per share in the prior year.FFO included gains and fee income of 26 cents per share from the recent transaction with Galileo America LLC as well as a one-time charge of approximately .05 cents per share for prepayment penalties and the write-off of refinancing costs. Earnings for the year jumped 28.3% to $131.9 million compared to $102.8 million for the same period last year. Same center NOI for the portfolio improved during 2005 by 5.8%, compared with a 3.1%-increase for the prior-year period. Same-store sales for mall tenants of 10,000 sf or less increased 4.1% to $331 per sf, compared with a 2.8%-increase for the previous year. The mall REIT’s year-end portfolio was 94.5% occupied, an increase of 50 basis points from the same period a year ago. During 2005, CBL signed 2.7 million sf of leases including 1.1 million sf of new leases and 1.6 million sf of renewals, Lebovitz said. He added: “In our new leases, we’ve been able to achieve substantial double-digit increases in rent.”However, 2006 is starting out on a bumpy note, as Minneapolis-based Musicland, which operates under the Sam Goody and Suncoast names, filed for bankruptcy protection. The REIT will take a hit of $1.8 million annually since the retailer plans to close 21 stores in CBL’s portfolio. “2005 was a phenomenal year for CBL on the development front,” Lebovitz said. During the year, the REIT opened 2.5 million sf of new developments and expansions with initial unleveraged returns ranging from 9% to 11%. Total development investment in 2005 was $250 million and included CBL’s first California property, Imperial Valley Mall in El Centro, CA.The REIT already has 1.6 million sf of development planned for 2006, representing an investment of $220 million, Lebovitz said during the call. Moreover, CBL will renovate eight malls this year for $69.2 million.