5Qs for Stephen Lebovitz on retail’s rebound
Sales are up, rent payments are up, and tenants including a hotel and a medical office building are opening up at CBL Properties, the big mall owner that filed for Chapter 11 bankruptcy protection and underwent a financial restructuring last summer. Sales increased 12.5% at CBL malls during the first quarter and several nontraditional mall tenants have been knocking on the doors of CBL’s leasing department.
CEO Stephen Lebovitz, who has installed a Live! Casino at Westmoreland Mall outside of Pittsburgh and will open another at the Galleria in York, Pa., predicts a retail rebound in the year ahead. We got on the phone with him to find out more.
It’s been a tough year for you, Stephen. Is it all over?
A year ago, in the spring of 2020, there was so much uncertainty and fear. I had regular calls with retail CEOs and no one knew what was in store. Things stabilized in the summer. Essential businesses showed real increases, but everything else suffered from restrictions and the downturn in travel. Retailers that had too much leverage and tenuous financials had the toughest time. Then the vaccines got out there and a lot of people with cabin fever got out, too.
There were a lot of rent deferrals. How did that work out for you?
Rent collections have picked up considerably--with the exception of theaters. Now they’re getting back open. We feel good with where we’re at now, but it was a tough time because so many companies were on the brink financially and couldn’t survive the pandemic.
CBL had begun remaking their properties with nontraditional tenants like hotels and medical centers years before COVID-19. Did a lot of that get stalled?
There was a pause, but most projects that started continued. We’re opening a hotel in Chattanooga in a former Sears building that was delayed. The Von Maur at West Towne in Madison was delayed a year but is going forward. The first Casino opened, and the second casino in York will be opening in August.
How have retailers at Westmoreland reacted to a casino anchor? Are they satisfied with the traffic?
It’s definitely driving traffic in addition to sales. We’ve seen a bump in jewelry stores sales, but for some other stores it hasn’t yet been much of a factor. Still, it’s too early to tell. The casino could only open gaming. Remaining closed have been its restaurants and concert venue that are more family oriented. But we’re really excited about gaming. It draws a young customer and we believe we’ll see a positive impact in conjunction with other brands in the mall.
How are retailers’ mindsets running now? Are they getting more positive?
They’re very expansion-oriented. Just really positive. Certain categories are really benefitting. Men’s suits are flying out of stores because there are all these weddings happening all of a sudden. It’s really interesting, the uses coming into the malls now. The business has changed so much. It was always the big nationals that filled them. But now its specialty gifts, art, local and regional brands. We have several spaces where we have three or four uses that want to come in. We haven’t seen that for a while.