CBL & Associates Properties Inc.'s leadership on Feb. 2 characterized the repositioning of the Macy's locations set to close at its properties as an occasion to reinvent the property rather than as merely a releasing liability.
"Each market stands on its own, but we've got roughly 20 to 30 acres of prime real estate at our top malls for development," President and CEO Stephen Lebovitz said on the company's 2016 year-end earnings call. "And in all cases, it's pretty much a blank canvas [what] we can do, not with just with the buildings, but with the land."
In January, Macy's made public a list of the stores it planned to close in 2017 as part of an effort to streamline operations after another lackluster holiday sales season for the ailing department store. CBL & Associates and GGP Inc. were the two REITs most affected by the closures.
Lebovitz on the Feb. 2 earnings call announced that the department store chain Dillard's will be taking over space leased to Macy's at one of the affected properties, the Layton Hills Mall in Salt Lake City, with plans to open in the fall.
At the other locations, the company may go the big box route it has taken in the past and bring in a sporting goods store like Dick's, or an off-price apparel retailer like T.J. Maxx or Ross. But Lebovitz said there is ample demand also from restaurants, movie theaters and fitness centers, as well as non-retail users like hotels and multifamily players.
"Our goal is to move these ahead expeditiously, on as quick a basis as we can," Lebovitz said of the redevelopments. "But on the other hand, it takes some time. And we want to get them teed up and get them right."
On Jan. 30, the mall REIT said it bought, in sale-leaseback deals, five department stores from Sears, another struggling player in the department store space, as well as two Sears Auto Centers located at its malls for $72.5 million.