Citi Global REIT CEO Conference Hollywood Beach, FL March 3-5, 2013
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Citi Global REIT CEO Conference Hollywood Beach, FL March 3-5, 2013 1 Safe Harbor Statement The information included herein contains "forward-looking statements" within the meaning of the Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or incorporated by reference in this presentation that address ongoing or projected activities, events or trends that the Company expects, believes or anticipates will or may occur in the future, including such matters as future capital expenditures, prospective development projects, distributions and acquisitions (including the amount and nature thereof), expansion and other trends of the real estate industry, business strategies, expansion and growth of the Company's operations and other such matters are forward-looking statements. Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Prospective investors are cautioned that any such statements are not guarantees of future performance and that future events and actual events, financial and otherwise, may differ materially from the events and results discussed in forward-looking statements. The reader is directed to the Company's various filings with the Securities and Exchange Commission, including without limitation the Company's Annual Report on Form 10K and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" incorporated therein, for a discussion of such risks and uncertainties. 2 CBL History CBL and Horizon Group Properties form a joint venture CBL opens a regional office in CBL acquires 23 properties CBL celebrates the grand and invest in four outlet centers. Boston, Massachusetts, to focus from The R.E. Jacobs Group opening of its first mall on the The Outlet Shoppes at Oklahoma on developing properties in the - the largest acquisition in the West Coast, Imperial Valley City opens fully leased with 83 New England region and company's history to date. Mall in El Centro, California. stores and is the only outlet throughout the Northeast. center in the state. Charles Lebovitz and five CBL becomes a Real Estate associates form CBL & Investment Trust (REIT) Associates, Inc. to develop named CBL & Associates CBL achieves new regional malls and community Properties, Inc. and is listed on record in acquisitions, centers. The newly formed the New York Stock Exchange. investing more than company developed its first $1.4 billion in two shopping mall, Plaza del Sol, portfolios located in in Del Rio, Texas, which St. Louis, MO and opened in March 1979. Greensboro, NC. CBL and TIAA- CREF form a $1.09 billion joint venture. CBL enters the acquisition arena with the purchase of WestGate Mall in Spartanburg, SC. 19781988 1993 1995 2001 20052007 2009 2011 2012 3 Properties # Sq. Ft (M) Total 162 91.3 Malls/Open-air 82 71.7 Centers Outlet Centers 3 1.0 Associated Centers 32 4.9 Community Centers 10 3.0 Offices 19 1.2 3rd Party/Other 16 9.8 4 Diversified Portfolio in Growing Cities Outlet centers CBL is Well Positioned for Growth: According to Forbes, over the past decade, the largest migration in the US has been to cities with between 100,000 and one million residents. 5 The Dominant Mall Strategy Operate the only or dominant mall in a strong and stable market Owning the only or dominant mall / open-air center within a broad radius provides sales stability and significant barriers to entry from competition Underserved markets provide an attractive growth opportunity for retailers: “The smaller market stores that we have opened to date have achieved a higher performance level than even we expected in terms of sales, customer capture and profitability, all without cannibalizing the existing fleet, confirming for us that these smaller markets can and will be a strong separate growth engine for us.” ~ David Dyer, president & CEO of Chico’s, Q4 ‘11 Conference Call Lower cost of occupancy contributes to retailer profitability. Strategically positions properties to capture additional market share in a recessionary economy. Well-positioned malls are supported by markets with a strong and diversified employment base including government, healthcare and higher education. 6 Value Opportunity • CBL currently trades at a severe discount relative to the peer group average FFO 20.7X multiple.* 18.5X 17.4X 17.7X • A move to only 13 times Peer Average: 15.6X 15.4X Consensus FFO (17% discount to average) yields a gain of over 10.1X 29%. 9.8X • Currently offering one of the highest yields in the REIT sector with growing income stream – Q1 2013 common dividend increased CBL SPG GGP TCO MAC PEI GRT 4.5%. *Stock Price and 2013 FFO Mean Consensus as of February 26, 2013 7 Improving Metrics 2009 2010 2011 2012 Portfolio 90.4% 92.4% 93.6% 94.6% Occupancy Sales PSF* $314 $322 $336 $346 / $353 Same Center (1.3%) (1.3%) +1.4% +2.0% NOI Growth Avg. Leasing (12.2%) (7.5%) 6.3% 8.4% Spread Total Debt $6.2B $5.8B $5.3B $5.4B Financing $1.6B $469.7M $2.1B $2.1B Activity *Sales PSF for 2012 reflects Sales including and excluding the impact of reporting License Agreements 8 Provide Resilient and Growing Operating Performance Year-End Stabilized Mall Occupancy Rate Average: 93.8% 100% 95% 95% 94% 95% 95% 92% 90% 85% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Annual Sales PSF 1 $350 $341 $346/$353 $283 $300 $313 $250 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Data shown as reported in respective year’s10K 1 1 Same-store sales per square foot for mall tenants 10,000 square feet or less for stabilized malls including reporting License Agreements.9 For 2012, sales are reflected including and excluding the impact of reporting License Agreements. Generate Stable Income Stream Total FFO ($mm) CAGR: 10.0% $500 $400 $300 $200 $100 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total NOI ($mm) and Same Center NOI Growth (%) CAGR: 9.7% 7.0% NOI SC NOI Growth $750 5.0% 5.8% 8% $500 2.7% 3.1% 5% 1.4% 1.9% 1.7% 1.4% 2.0% $250 3% $0 -1.8% -1.3% -1.3% 0% -$250 (3)% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Data as reported in respective period’s 10K or 8K 10 Tenant Diversification • More than 8,000 mall stores portfolio-wide with National and Top Tenants % of Revenue Regional retailers comprising Limited Brands 3.20% approximately 81% of Foot Locker, Inc. 2.38% Occupied GLA. AE Outfitters Retail Company 2.06% The Gap, Inc. 1.73% Signet Group PLC 1.72% • Over 72% of Total Genesco, Inc. 1.60% Revenues are derived JCPenney Co. Inc. 1.58% from tenants that individually contribute Abercrombie & Fitch, Co. 1.56% less than 1.0% of Dick's Sporting Goods 1.44% revenues. Luxottica Group, S.P.A. 1.35% Total 18.62% As of December 31, 2012 11 Positive Retail Trends • More than 6.0 million square feet leased in 2012. • Positive Stabilized Mall Lease Spreads: +8.4% in 2012. • Twelve consecutive quarterly increases in sales psf * Avg Spread 12 New Retailers to CBL in 2012 • Armani Exchange • Love Culture • American Girl • Michael Kors • Altar’d State • Microsoft • Clarks • Oakley • Crocs • Pandora • Garage • Plow & Hearth • J. Crew • Tilly’s • Lego • Versona 13 Update on Major Retailers • 13 Best Buy Stores – 12 Box Locations, 20 – 45K sf – 55 Best Buy Mobile Locations – 1.02% of Total Annualized Revenues • 70 Sears Locations – 50 Owned Stores – 20 Leased Stores (Avg. Occ Cost ~3%) – 0.76% of Total Annualized Revenues • 75 JCPenney Locations – 36 Owned Stores – 39 Leased Stores – 1.58% of Total Annualized Revenues As of December 31, 2012 14 Strategic Priorities Internal External Achieve IG Growth Growth Rating De-lever through Non-Core Drive Sales through Event Enhance Existing Portfolio and Mature Asset focused Marketing through Value-Added Dispositions; Natural Redevelopment and Amortization; JV Expansion opportunities High Occupancy Levels Increase unencumbered Ground-up Development Aggressive Leasing NOI through payoff of Including Outlet Centers maturing mortgages Increase Branding & Specialty Leasing Create an optimal financial Opportunistic Acquisitions of structure using both Core Retail and Outlets secured and unsecured Property Renovations debt 15 Acquisitions • Selectively pursuing acquisitions of high quality assets with growth opportunities. • Since 1998, CBL has invested ~$6.8 billion to acquire ~62 million sq. ft. representing Est. Cap interests in 114 Date Property Acquisition Price properties. Rate Northgate Mall, Chattanooga, 10/11 $11.0M 20.0% + • CBL’s strong TN relationships has The Outlet Shoppes at El Paso $108.7M (Incl. allowed it to source off- 4/12 (75%) and The Outlet Shoppes 7.5 – 8% $70.5M of loans) market transactions at Gettysburg (50%) achieving favorable $91.5M (incl. 5/12 Dakota Square Mall, Minot, ND 8.1% pricing. $59.0M loan) Kirkwood Mall, $121.5 (incl. $40.4M 12/12 Low 7% Bismarck, ND* loan) Imperial Valley Mall, $36.5 (incl. $21M 12/12 NA El Centro, CA loan) *CBL acquired 49% at 12/31/12. The remaining 51% will be acquired in 2013, subject to lender approval. 16 2012 Acquisition Kirkwood Mall, Bismarck, ND • December 2012: In an off-market transaction, acquired 49% interest in Kirkwood Mall in Bismarck, ND. • Anchors: JCPenney, Scheel’s All-Sports, Herberger’s, I. Keating Furniture and Target • 40,000-sq.