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IKEA terminates contract to purchase land from CBL Associates in North Carolina

IKEA terminated a contract with CBL & Associates Properties Inc. to purchase land at Cary Towne Center, in Cary, N.C., on which it intended to build a store, due to a shift in corporate strategy.

According to a filing, the $46.7 million interest-only nonrecourse loan, secured by the mall, will expire on the date the contract is terminated if it occurs prior to the loan's slated maturity of March 5, 2019.

The retail real estate investment trust, after talks with the lender regarding a potential restructuring of the loan, believes an impairment is required because it is unlikely that the asset's net carrying value of $87.4 million will be recovered through future cash flows.

The noncash impairment is projected to be in the range of $52 million to $62 million and will be recorded in the second quarter.