CBL Properties (CBL) Q3 2026 earnings review
CBL raised its profit outlook, but renewal rents barely moved
CBL's malls are filling with tenants, but the rents existing stores pay to stay have hardly changed. The mall landlord lifted income from the properties it held a year ago by 3.8%, and by our math a swing in bad-debt charges supplied over half that gain. Chief executive Stephen D. Lebovitz raised the full-year profit target again.
| Rental income at properties owned a year ago | +3.8% about +1.7% excluding a bad-debt swing, by our math |
|---|---|
| Portfolio occupancy | 91.5% 90.2% a year ago |
| Profit per share, excluding one-offs | $1.90 $1.55 a year ago |
| Full-year profit outlook | Raised 19 cents middle of the range: $7.39 a share |
⚖️ Verdict: 🟢 Bullish
The standing case got better, because CBL has finished refinancing its loans and now keeps more of the rent it collects. Nearly $1.0 billion of new financings leaves no large loan falling due soon, Lebovitz said. One caution: the quarter's income growth leaned on that bad-debt swing, and tenants renewing leases agreed to pay barely more than before.
The question now is whether the rent base can grow without one-off help. One answer: new leases signed at 27% above previous rents lift the roll as they begin. The other: renewals near 2% hold the gain close to zero. February's property-income figure settles it.
🐂 Bull Case
Refinancing Freed Over $45 Million a Year
Lenders had been sweeping the rent from several CBL malls straight into debt service, which left the landlord little spare cash. Chief executive Stephen D. Lebovitz spent the year undoing that. In October his team refinanced West County Center, "a dominant regional mall located in St. Louis, MO", with a $135.0 million five-year loan at 7.4%.
The new loan "removes the cash management sweep, unlocking more than $7.0 million of annual free cash flow", Lebovitz said. Nearly $1.0 billion of financings this year leave CBL with "no major maturities until 2028 and added over $45.0 million in annual free cash flow". Cash from operations over nine months reached $224.3 million.
- Variable-rate share of debt: 11.0%, against 28.7% at the end of 2025
- Planned 2026 principal repayments: $58 million to $63 million, cut from $90 million to $95 million a year ago
- Quarterly dividend: $0.625 a share, up from $0.45 a year ago
What to watch: the interest bill in February's annual report. Over nine months CBL paid $101.7 million of interest, barely changed from a year earlier, even though the average rate on its debt reached 6.44%. Should that bill climb, the freed cash flows back to the lenders instead of to shareholders.
More of CBL's Space Has a Paying Tenant
Occupancy measures how much of the rentable space carries a paying tenant. Across CBL's centres it reached 91.5% at the end of September, from 90.2% a year earlier. Mall occupancy gained 2.1 percentage points even after "bankruptcy-related store closures of approximately 68,000 square feet", which the landlord said cost it nearly half a point.
The gain reached the rent line. Rental revenue rose $9.1 million. Properties CBL held through both periods supplied $5.8 million of that, a little ahead of the $5.7 million from recently bought malls. Three months ago those same properties had added only $0.9 million, so the engine no longer depends on purchases.
What to watch: the comparable-property figure in February's results. Lebovitz credited "embedded rent increases, rental increases in renewal leasing and higher occupancy", and his leasing team signed more than 930,000 square feet in the quarter, "adding $4.6 million in net new annual rent". A repeat near $5 million would confirm the quarter was not a one-off.
CBL Lifted Its Full-Year Profit Target Again
Landlords report funds from operations, a rent-based profit measure that leaves out property depreciation and sale gains. Excluding one-offs, CBL earned $1.90 a share on that measure, against $1.55 a year earlier. Lebovitz said the group is lifting both its property-income and profit targets "for the second time this year".
The middle of the full-year profit range has travelled from $6.90 last February to $7.39 now. Each step rests on money already banked rather than on a better final quarter, and CBL finished inside its own yearly range in each of the last two years, above the middle both times.
What to watch: whether February's full-year figure lands above $7.44. The quarter came in about 29% above what August's plan pointed to, by our math, which says that plan was cautious rather than that the business sped up.
More Asset Sales, and a New Buyback Plan
CBL keeps selling what it calls non-core property and recycling the cash. Gross proceeds at its share passed $101.3 million this year, counting Hammock Landing, York Town Center and Old Hickory Mall, which went for $5.5 million in early November. Ten land parcels went to apartment developers.
Eastland Mall in Bloomington sits under firm contract for $11.3 million with a deposit the buyer cannot reclaim. "By exiting non-core assets that contribute little to earnings, CBL is improving the overall quality of its portfolio", the group said. On November 4 the board approved repurchasing up to $25.0 million of shares.
What to watch: how much of that $25.0 million CBL spends by February. The previous programme used $12.0 million of its $25.0 million in a year, so the new one tests whether directors prefer buybacks or the $2.50 annual dividend.
🐻 Bear Case
Half the Income Growth Came From Bad Debt
CBL leads with same-center net operating income: the rent minus running costs at properties it has held through both years. That rose 3.8%, or $3.5 million. The same table shows the estimate for uncollectable revenues "favorably impacted the quarter by approximately $1.9 million", so over half the gain came from that swing.
Strip the swing out and the underlying gain is about 1.7%, by our math, which sits inside the range the landlord now plans for the full year. Lebovitz credited rent escalators, renewals and occupancy. The renewal part stays thin, and renewals are where the bulk of the square footage sits.
- Renewal leases: average rent 2.0% above the old rent, and 0.4% higher at the start of the lease
- New leases: 27.0% above the old rent, but on only 49,215 square feet of small-shop space
- New leases signed: 169,248 square feet, against 203,948 a year earlier
- Occupancy at the same-center malls, lifestyle and outlet centres: 90.6%, from 90.4%
What to watch: the renewal rent change in February, and the bad-debt line beside it. Renewals cover 764,535 of the 933,783 square feet signed in the quarter, so a renewal number near 2% caps how fast the rent base can grow once the bad-debt comparison turns.
The Outlook Points to a Weaker Fourth Quarter
The higher full-year target still leaves a soft finish. Nine months in, CBL has earned $5.52 a share on its one-off-adjusted measure. By our math the new range leaves about $1.87 a share for the final quarter, against $2.25 a year earlier. That is a fall of roughly 17%.
Lebovitz names the reason himself: "While fourth quarter comparisons will reflect tax refunds and bad debt recoveries recognized in the prior-year period". Those credits do not return. The same arithmetic applied to property income points to a final quarter between a 4.3% fall and a 1.2% gain, after 3.8% growth now.
What to watch: February's property-income figure, measured against the 0.75% to 2.25% full-year range. A reading at the bottom would say this quarter's result was the exception, while one at the top would show the rent base carrying the year on its own.
Risks the Quarter Did Not Settle
Four standing worries collected new facts but no conclusion. CBL is handing defaulted malls back to lenders, refinancing the rest at higher rates, and reporting operating figures that leave its weakest properties out of the pool.
- Loans in sale, foreclosure or conveyance: six, about $266.7 million at CBL's share. The group "intends to cooperate"; Arbor Place and Parkdale were still only in discussions at September 30, so the next filing's deconsolidation note settles it.
- Short extensions: The Outlet Shoppes at Laredo runs to November 2026 and Volusia Mall to January 2027. A fresh default, rather than another extension, would move this.
- Cost of new money: Northwoods Mall refinanced at 9.1% and West County Center at 7.4%, against older loans near 5%. The 2028 maturities set the next test.
- Measurement: "Volusia Mall has been removed from the same-center pool" and 13 properties count as non-core, so the headline occupancy and sales figures describe a curated set.
👓 Other Themes
Shoppers at CBL's Malls Spent More
Sales per square foot at CBL's smaller stores reached $463 over the last twelve months, 3.6% above a year ago, and the quarterly figure gained about 3.0%. Traffic "continues to increase across our portfolio", Lebovitz said. Percentage rents, which move with tenant sales, added $0.4 million.
A Bankruptcy-Era Tax Limit Has Expired
The five-year window that followed CBL's 2021 bankruptcy exit closed on November 1, so tax rules no longer cap the deductions it may claim. "CBL now has flexibility to optimize its portfolio composition, monetize non-core assets, and return capital to shareholders more tax efficiently", the group said. Selling loss-making assets in 2027 could turn part of the dividend into a return of capital, which shareholders are not taxed on when they receive it.
💲 Other KPIs
Reported profit fell to $11.8 million from $75.1 million. Last year's quarter carried a $33.9 million gain from handing Southpark Mall to its lender, plus $51.2 million from property sales. This year CBL booked $5.4 million of sale gains and a non-cash charge of $25.3 million for interest on defaulted loans.
Outlays on tenant allowances and upkeep rose to $25.0 million from $16.3 million a year earlier. That equals 16.9% of revenue, against 11.7%. Tenant allowances alone more than doubled, to $11.9 million, as newly signed leases started and landlords funded the fit-out.
Borrowings at CBL's share fell 6.5% from a year ago to $2.50 billion, and have come down at every reporting date in that year, as foreclosures and sales took loans off the books. Fixed rates now cover 89% of the total. The average remaining term stretched to 3.4 years from 2.6 years.
Unrestricted cash and US Treasury holdings, including $15.8 million at CBL's share inside joint ventures, stood at $366.7 million, against $322.7 million three months earlier. Asset sales and the refinancings supplied the increase. A further $98.1 million sits in escrow accounts that lenders control.
🔮 Guidance
Raised. The middle of the range moved up 19 cents, to 2.5% growth over last year. By our math that leaves about $1.87 a share for the fourth quarter, roughly 17% below the $2.25 earned a year ago, because last year's final quarter held tax refunds and bad-debt recoveries. Third move since February: plus 23, 8 and 19 cents.
Raised. The middle of the range moved up $5.1 million. Nine months delivered $170.4 million, so by our math the fourth quarter carries $56.3 million to $59.4 million against $70.1 million a year ago. Each raise this year has followed money already earned rather than a stronger view of the months ahead.
Raised. The plan now has property income growing up to 2.25% this year, after 2.6% over nine months. By our math the fourth quarter falls between a 4.3% decline and a 1.2% gain. CBL also states that "Volusia Mall has been removed from the same-center pool", which lowers both this year's and last year's comparison base.
Lower in dollars, higher in percentage terms. Taking Volusia Mall out of the pool removed roughly $5.8 million from the measured base, which is why the dollar range slipped while the growth range climbed. Readers comparing the two ranges across quarters are not comparing the same set of properties.
Raised. Nine months already produced $104.6 million, above the top of the range set in August, mostly on $41.2 million of gains from malls handed to lenders. The new range implies $7.6 million to $10.6 million for the fourth quarter, against $48.3 million a year ago, because those gains do not repeat.
Raised by 59 cents at the middle, tracking the net income line. The middle sits 15% below last year's $4.34, since 2025 carried larger property sale gains. By our math the fourth quarter holds about 37 cents. Accounting profit swings with disposals here, which is why CBL leads with its rent-based measure.
Trimmed by 0.1 million. Buybacks and shares withheld for tax have taken the count down, and the new $25.0 million authorisation could cut it further. Each 1% reduction adds about 7 cents to the full-year per-share figure, by our math, so the lever is real but small.
Unchanged. Spending has picked up sharply, with $11.9 million of tenant allowances in this quarter alone, so the top half of the range now looks the relevant part. The figure excludes properties whose cash flow lenders control, which keeps the defaulted malls out of the number.
Cut again. The envelope has fallen from $15.0-$20.0 million a year ago to $5.0-$7.0 million now, a third reduction in four quarters. CBL is spending on filling existing space rather than building new, and selling land to apartment developers instead of redeveloping it itself.
Unchanged for a third quarter, and far below the $90.0-$95.0 million planned a year ago. Ending the old term loan's cash sweep in March did most of that work. The gap, about $32 million at the middle, is the clearest measure of what the refinancing hands back to shareholders.
❓ Key Questions
How much of last year's fourth quarter repeats?
Lebovitz flags tax refunds and bad-debt recoveries in the prior-year period but gives no figure. Without one, readers cannot tell how much of the implied 17% fall is a comparison effect and how much is lost rent.
What rent do the 13 non-core properties carry?
They sit outside the occupancy, sales and property-income figures, yet they still carry debt and tenants. A rent and debt figure for the group would show how much income disappears as each one goes to a lender.
When do Arbor Place and Parkdale leave the books?
Both loans entered maturity default in the spring and were still only in discussions at the end of September. Each handover produces an accounting gain and removes rent, so the timing moves two lines at once.
What will Laredo and Volusia cost to settle?
One loan runs to November 2026 and the other to January 2027. CBL lists sale, refinancing and conveyance as options without naming a preferred one or the cash each path needs.
Why do renewal rents barely move?
New leases came in 27.0% above previous rents while renewals managed 2.0%. The gap suggests sitting tenants hold the stronger hand, and CBL has not explained what changes that.