CBL Puts the Experiential in Retail

Fresh takes on mall anchors, entertainment and more are driving strategy at the REIT's properties, CEO Stephen Lebovitz reports.
Stephen Lebovitz
Stephen Lebovitz

“Experiential” is the buzzword in retail as consumers shift their focus and overextended retailers in waning categories downsize or shut down. The shift—perhaps not entirely unusual in the ever-changing retail sector but seemingly more extreme in its redirection—is forcing owners of malls and shopping centers to rethink their tenant mix.

Just how significant is the shift in tenancy? In a Q&A session during the National Association of Real Estate Editors annual real estate journalism conference in Las Vegas dubbed “The Retail Armageddon—Is It Real?” CBL Properties CEO Stephen Lebovitz noted that 70 percent of his company’s first-quarter leasing was not to apparel firms. “It’s a very creative process,” he said. New additions have included American Girl, Ulta Beauty and a number of sporting-goods stores that feature interactive elements.

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Among changes at CBL properties has been the buyback of five Sears sale-leasebacks for conversion to a variety of entertainment and restaurant uses, and it is in the process of replacing other department stores, as well. At its Brookfield Square in Milwaukee, the Sears will become a mix of a new entertainment concept called WhirlyBall and a Marcus Theatres BistroPlex. A redevelopment underway at the Jefferson Mall in Louisville, Ky., includes replacement of a Macy’s store with Round1 Bowling & Amusement, marking the nearly 40-year-old multi-entertainment activity provider’s entrée into the state. The mall’s Sears store will be replaced with a to-be-announced combination of dining, entertainment and retail.

Mixing Uses

CBL is also introducing hotel and office elements in some cases, and is examining underutilized parking lots. “We’re looking hard at every type of mixed-use,” Lebovitz noted. That entails a whole new skill set, and while CBL employees are expanding their capabilities, CBL is also partnering with firms in other sectors to ensure mixed uses are addressed appropriately.

While appealing to consumers is the ultimate goal, remaining competitive also means “Amazon-proofing” a property’s composition—or at least devising complementary offerings. Success also means coming up with uses that will be relevant for the next 20 years.

“Malls were pretty cookie-cutter … and now we’re deconstructing them. … It’s a process that’s going to take a lot of years,” Lebovitz said.

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