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Development the Focus at CBL

CHATTANOOGA, TN-Cap rates, competition curb acquisitions, one million sf expected to open in Q4.

By Debra Hazel | Updated on November 06, 2006

CHATTANOOGA, TN-Development is ongoing and even will pick up, but don’t look for CBL & Associates Properties to re-enter the buyers’ market in a big way, an executive said at its third quarter conference call. Multiple projects are in the development pipeline, and sales and traffic remain high.

“Our project pipeline is robust, but there are still opportunities to increase that,” said John Foy, chief financial officer. The company remains on track with earlier predictions of between $400 million and $600 million in planned developments and renovations, Foy said. The company has one million square feet scheduled to open in the fourth quarter, and 2.5 million square feet in the pipeline for next year. Concerns about banks’ heavy investment in real estate are leading tenants to approach CBL about joint ventures to grow, Foy added.

However, the acquisition market remains tight. CBL examined an acquisition in South Florida earlier in the year, only to drop out early when bidding got too high. “We aren’t seeing cap rates adjusting. I don’t see us getting more active in acquisitions with pricing at these levels,” said Stephen D. Lebovitz, president.

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