About Michael Lebovitz
In a September 2023 interview, CBL Properties CEO Stephen Lebovitz discussed the company's post-reorganization financial position and the evolution of its mall properties. Lebovitz stated that the company had strengthened its balance sheet, reduced debt, and increased free cash flow following a major reorganization, which he said positioned the company well for the current environment. He noted that debt to EBITDA was in the low six times and that interest costs had been reduced through financings.
Lebovitz described significant changes to the traditional mall model, saying the definition of an anchor tenant has expanded to include casinos, entertainment venues, and non-retail uses, and that the tenant mix now includes more local and regional stores. He said the company is adding charging stations and external activities in parking lots, and that the mall is "changing more today than it ever has" due to evolving customer preferences. Regarding foot traffic, Lebovitz reported that traffic was above 2019 levels and sales had held up, though he expressed concern about the potential lag effect of higher interest rates on the financing markets in the coming year.
Source: AI-verified profile updated from Michael Lebovitz's recent appearances.
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Transcript (7 segments)
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Michael Lebovitz0:00
The mall has evolved. We have a lot more external activities in the parking lots and activations, and we're adding charging stations at a lot of the properties because there's so much demand for that. So the mall is changing more today than it ever has.
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Diane0:15
I'm here today with Steven Lebovitz, CEO of CBL Properties. Last year saw CBL complete a major balance sheet reorganization. How has that positioned the company for today's environment?
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Steven Lebovitz0:27
Thank you, Diane. It's actually been very helpful for us because we've strengthened our balance sheet. We have significant free cash flow, which is good to have in this environment. Most of our corporate guarantees were removed as part of the reorganization, and we also reduced our debt significantly. So as a result, our debt to EBITDA is in the low six times. Like I said, our free cash flow is up. We did some financings earlier this year that allowed us to reduce our interest costs. So all in all, it's been very helpful to us as we look ahead to the future.
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Diane1:03
And what are some of the changes CBL has made to the traditional mall model, and do you see further evolution ahead?
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Steven Lebovitz1:10
Yeah, absolutely. We've been in the mall business for basically 50 years, so our company was one of the pioneers in the business. One thing about malls is they've always been changing, but in the last 10 years the change has been unprecedented. We have changed the definition of an anchor. Now we have casinos, entertainment users, big boxes, and non-retail uses that we brought into the malls. We have different kinds of stores, more locals and regionals compared to a predominance of national stores. So the mall has evolved. We have a lot more external activities in the parking lots and activations, and we're adding charging stations at a lot of the properties because there's so much demand for that. So the mall is changing more today than it ever has, and that's going to continue because the customer is changing.
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Diane2:00
And how concerned are you about the impact of inflation and high interest rates on foot traffic across your property?
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Steven Lebovitz2:08
Sure. So far our foot traffic has held up; we're above 2019 levels. Our sales have held up. We are concerned about next year and the lag effect from higher interest rates. It's definitely impacted the financing markets, but we think we're well positioned. We've diversified the types of uses. People still have cabin fever from COVID; they like to get out. We've added more experiential aspects to going to the mall. So with that combination, we think we'll be able to hold on to traffic and that sales will continue to be strong.
