Chattanooga, Tenn. — CBL & Associates Properties has announced future redevelopment and replacement plans for J.C. Penney anchor locations in the CBL portfolio that are expected to close this year.
J.C. Penney intends to close four locations in the CBL portfolio. They include stores at Hickory Point Mall in Forsyth, Ill., Janesville Mall in Janesville, Wis., Wausau Center in Wausau, Wis., and Northgate Mall in Chattanooga, Tenn. CBL anticipates the closures to occur in the second quarter of this year.
Three of the locations are leased from CBL. The Northgate Mall store is leased from a third part, and CBL plans to work with the building owner to facilitate redevelopment. The stores encompass about 499,000 sq. ft. and remit $1.4 million in gross annual rent. J.C. Penney will continue to pay rent until the leases expire.
CBL analyzed co-tenancy provisions in other leases at these properties and determined that the financial exposure would be immaterial.
Over the past three years, CBL has added or redeveloped more than 75 anchor and junior anchor locations spanning 2.2 million sq. ft. Today, other than locations under redevelopment, CBL has no vacant anchor locations in its core portfolio.
Based on CBL's record of successful anchor redevelopment, similar projects have generally required 12-24 months to complete and an investment of $5-10 million generating initial unleveraged returns in the range of 7-10%. More specific cost and return information regarding the four locations will be announced as plans are finalized.