The Tennessee real estate investment trust that owns Burnsville Center said it would cooperate with foreclosure proceedings for the suburban mall and three of its other shopping centers.
CBL Properties said in public financial filings earlier this year that Burnsville Center had experienced a decline in income due to store closures and rent reductions.
According to second-quarter results released last week, CBL Properties’ overall same-center net operating income declined 32% for the three months ended June 30.
“Our financial and operating results for the second quarter reflect the temporary closure of the CBL portfolio for a significant period due to government mandates,” said Stephen Lebovitz, CBL Properties chief executive, in a statement. “Revenues for the quarter were impacted by a major increase in the estimate for uncollectible revenue related to rents due from tenants that recently filed for bankruptcy or are struggling financially, as well as amounts that were abated as part of negotiations. Store closures and rent loss from prior tenant bankruptcies and lower percentage rent related to lower retail sales also impacted revenue.”
CBL Properties has been working with tenants to address rent-deferral requests and collected a little more than 54% of the overall rent due by tenants from April through July.
Earlier this year, CBL Properties had been in talks with lenders to try to modify the loans of several of its malls, including Burnsville Center. At the same time, the company had cut expenses by furloughing about 300 employees, or 60% of its workforce, reducing pay for executives and other staff and other cost deferrals.
According to data firm Trepp, CBL owed about $63 million on the loan and had started missing its mortgage payments in April.
Last week, the company announced that after discussions with lenders it anticipated cooperating with foreclosure or conveyance proceedings for Burnsville Center, the Park Plaza in Little Rock, Ark., Hickory Point in Forsyth, Ill., and EastGate Mall in Cincinnati.
CBL Properties spokeswoman Stacey Keating confirmed the Burnsville Center’s pending foreclosure, but she said shoppers wouldn’t see an immediate change at the center.
“Customers can continue to expect business as usual at Burnsville Center,” she said in an e-mail.
Many malls throughout the country have suffered during the coronavirus pandemic that forced stores to temporarily close for months with some tenants unable to pay their rents due to the drop in sales. The owners of the Mall of America have fallen three months behind on paying the megamall’s mortgage.