CBL & Associates Properties Inc: Form 10-Q for the period ended Jun 30, 2025

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and accompanying notes that are included in this Form 10-Q. Capitalized terms used, but not defined, in this Management’s Discussion and Analysis of Financial Condition and Results of Operations have the same meanings as defined in the notes to the condensed consolidated financial statements. Unless stated otherwise or the context otherwise requires, references to the “Company,” “we,” “us” and “our” mean CBL & Associates Properties, Inc. and its subsidiaries.

Certain statements made in this section or elsewhere in this report may be deemed “forward-looking statements” within the meaning of the federal securities laws. All statements other than statements of historical fact should be considered to be forward-looking statements. In many cases, these forward-looking statements may be identified by the use of words such as “will,” “may,” “should,” “could,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “projects,” “goals,” “objectives,” “targets,” “predicts,” “plans,” “seeks,” and variations of these words and similar expressions. Any forward-looking statement speaks only as of the date on which it is made and is qualified in its entirety by reference to the factors discussed throughout this report.

Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, forward-looking statements are not guarantees of future performance or results and we can give no assurance that these expectations will be attained. It is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of known and unknown risks and uncertainties. In addition to the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, such known risks and uncertainties include, without limitation:

• general industry, economic and business conditions;
• interest rate fluctuations;
• costs and availability of capital, including debt, and capital requirements;
• the ability to obtain suitable equity and/or debt financing and the continued availability of financing, in the amounts and on the terms necessary to support our future refinancing requirements and business;
• costs and availability of real estate;
• inability to consummate acquisition or disposition opportunities and other risks associated with acquisitions and dispositions;
• competition from other companies and retail formats;
• changes in retail demand and rental rates in our markets;
• shifts in customer demands including the impact of online shopping;
• tenant bankruptcies or store closings;
• changes in vacancy rates at our properties;
• changes in operating expenses;
• changes in applicable laws, rules and regulations;
• cyberattacks or acts of cyberterrorism;
• uncertainty and economic impact of pandemics, epidemics or other public health emergencies or fear of such events; and
• other risks referenced from time to time in filings with the Securities and Exchange Commission (“SEC”) and those factors listed or incorporated by reference into this report.

This list of risks and uncertainties is only a summary and is not intended to be exhaustive. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.

Executive Overview

We are a self-managed, self-administered, fully integrated REIT that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, outlet centers, lifestyle centers, open-air centers and other properties. See Note 1 to the condensed consolidated financial statements for information on our property interests as of June 30, 2025. We have elected to be taxed as a REIT for federal income tax purposes.

The following summarizes our net income and net income attributable to common shareholders (in thousands):

Significant items that affected comparability between the three-month periods include:

• Items increasing net income for the three months ended June 30, 2025 compared to the prior-year period:
• Rental revenues were $12.4 million higher; and
• Gain on sales of real estate assets was $1.4 million higher.
• Items decreasing net income for the three months ended June 30, 2025 compared to the prior-year period:
• Depreciation and amortization expense was $1.0 million higher;
• Real estate taxes were $2.0 million higher;
• Interest expense was $4.6 million higher;
• Maintenance and repairs expense was $1.2 million higher; and
• Property operating expense was $2.8 million higher.

Significant items that affected comparability between the six-month periods include:

• Items increasing net income for the six months ended June 30, 2025 compared to the prior-year period:
• Rental revenues were $25.7 million higher; and
• Gain on sales of real estate assets was $19.2 million higher.
• Items decreasing net income for the six months ended June 30, 2025 compared to the prior-year period:
• Depreciation and amortization expense was $8.5 million higher;
• Real estate taxes were $8.5 million higher;
• Interest expense was $9.0 million higher;
• Maintenance and repairs expense was $4.7 million higher; and
• Property operating expense was $4.9 million higher.

Our focus is on continuing to execute our strategy to improve occupancy, drive rent growth and transform the offerings available at our properties to include a targeted mix of retail, service, dining, entertainment and other non-retail uses, primarily through the re-tenanting of former anchor locations as well as diversification of in-line tenancy. This operational strategy is also supported by our balance sheet strategy of reducing overall debt, extending our debt maturity schedule and lowering our overall cost of borrowings to limit maturity risk, as well as improving net cash flow and enhancing enterprise value. In July 2025, we closed on the acquisition of four enclosed malls for $178.9 million (the "WPG acquisition"). The malls include Ashland Town Center in Ashland, KY, Mesa Mall in Grand Junction, CO, Paddock Mall in Ocala, FL, and Southgate Mall in Missoula, MT. The WPG acquisition represents significant progress in the execution of our portfolio optimization strategy as we utilize proceeds from non-core asset sales at single-digit cap rates, such as the $83.1 million sale of The Promenade completed in July 2025, to invest in stable market-dominant malls that generate immediate accretion to our portfolio's free cash flow.

The WPG acquisition also furthers our goal of enhancing returns to shareholders. Supported by the incremental cash flow growth from the WPG acquisition, our board of directors has authorized a 12.5% increase in the regular common dividend to an annualized rate of $1.80 per share. This is in addition to the special cash dividend of $0.80 per share paid in March 2025 and the board of director's authorization of a new $25 million stock repurchase program in May 2025.

Additionally, we have made significant progress on our balance sheet in recent months. In July 2025, we announced a new $78.0 million non-recourse loan secured by Cross Creek Mall in Fayetteville, NC. The new five-year loan bears a fixed interest rate of 6.856%, a more than 130 basis point improvement over the prior rate. We also expanded our existing non-recourse open-air centers and outparcels loan with the WPG acquisition, extending the overall loan maturity by seven years and fixing the rate on the majority of the loan amount. These financings strengthen our balance sheet by extending our maturities, reducing interest rate risk, locking in attractive returns and increasing cash flow generation. While the industry and our Company continue to face challenges, some of which may not be in our control, we believe that the strategies in place to improve occupancy, diversify our tenant mix and redevelop our properties will continue to contribute to stabilization of our portfolio and revenues in future years.

Same-center NOI and FFO are non-GAAP measures. For a description of same-center NOI, a reconciliation from net income (loss) to same-center NOI, and an explanation of why we believe this is a useful performance measure, see Non-GAAP Measure - Same-center Net Operating Income in Results of Operations. For a description of FFO, a reconciliation from net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders, and an explanation of why we believe this is a useful performance measure, see Non-GAAP Measure - Funds from Operations.

Results of Operations

Properties that were in operation for the entire year during 2024 and the six months ended June 30, 2025 are referred to as the "Comparable Properties." Since January 2024, we have opened, consolidated, acquired, deconsolidated and disposed of the following properties:

Properties Opened

(1) The property is owned by a joint venture that is accounted for using the equity method of accounting and is included in equity in earnings of unconsolidated affiliates in the accompanying condensed consolidated statements of operations.

Consolidations

Acquisitions

(1) The transaction occurred subsequent to June 30, 2025. See Note 15 for more information.

Deconsolidations

(1) The transaction occurred subsequent to June 30, 2025. See Note 15 for more information.

Dispositions

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(1) The transaction occurred subsequent to June 30, 2025. See Note 15 for more information.

We consider properties undergoing major redevelopment, properties being considered for repositioning, properties where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender as non-core. As of June 30, 2025, Brookfield Square, Harford Mall, Laurel Park Place and Southpark Mall were designated as non-core. Additionally, The Promenade was in the process of being sold and therefore was designated as non-core as of June 30, 2025.

Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024

Revenues

Rental revenues increased primarily due to the consolidation of CoolSprings Galleria, Oak Park Mall and West County Center in December 2024, which resulted in an increase of $21.0 million during the current-year period. The increase was partially offset by $8.5 million of rental revenues associated with properties sold since the prior-year period. Rental revenues at the comparable properties were flat compared to the prior-year period.

Operating Expenses

Total property operating expenses increased primarily due to the consolidation of CoolSprings Galleria, Oak Park Mall and West County Center in December 2024, which resulted in an increase of $7.7 million during the current-year period. Also, the increase was impacted by state franchise tax rebates received in the prior-year period. The increase was partially offset by $3.7 million of total property operating expenses associated with properties sold since the prior-year period.

Depreciation and amortization expense increased primarily due to the addition of tangible assets and intangible lease assets recognized upon the consolidation of CoolSprings Galleria, Oak Park Mall and West County Center in December 2024, which resulted in an increase of $13.2 million during the current-year period. The increase was partially offset by tenant improvement and intangible in-place lease assets recognized upon the adoption of fresh start accounting on November 1, 2021 becoming fully depreciated or amortized since the prior-year period. Also, dispositions accounted for a $2.1 million decrease in the current-year period as compared to the prior-year period.

Other Income and Expenses

Interest expense increased $4.6 million during the three months ended June 30, 2025 as compared to the prior-year period. The increase was primarily due to higher accretion of property-level debt discounts and property-level interest expense associated with the consolidation of CoolSprings Galleria, Oak Park Mall and West County Center in December 2024. The increase was partially offset by lower interest expense on the secured term loan due to paydowns that have occurred since the prior-year period, as well as a lower variable interest rate in the current-year period.

During the three months ended June 30, 2025, we recognized a $1.3 million gain on sales of real estate assets primarily related to the sale of an outparcel.

Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

Revenues

Rental revenues increased primarily due to the consolidation of CoolSprings Galleria, Oak Park Mall and West County Center in December 2024, which resulted in an increase of $41.8 million during the current-year period. The increase was partially offset by $14.7 million of rental revenues associated with properties sold since the prior-year period.

Operating Expenses

Total property operating expenses increased primarily due to the consolidation of CoolSprings Galleria, Oak Park Mall and West County Center in December 2024, which resulted in an increase of $15.8 million during the current-year period. Also, the increase was impacted by state franchise tax rebates received in the prior-year period, as well as an increase in non-contract exterior maintenance costs, primarily driven by an increase in snow removal expense across our properties. The increase was partially offset by $2.2 million of total property operating expenses associated with properties sold since the prior-year period.

Depreciation and amortization expense increased primarily due to the addition of tangible assets and intangible lease assets recognized upon the consolidation of CoolSprings Galleria, Oak Park Mall and West County Center in December 2024, which resulted in an increase of $30.4 million during the current-year period. The increase was partially offset by tenant improvement and intangible in-place lease assets recognized upon the adoption of fresh start accounting on November 1, 2021 becoming fully depreciated or amortized since the prior-year period. Also, dispositions accounted for a $3.8 million decrease in the current-year period as compared to the prior-year period.

Other Income and Expenses

Interest expense increased $9.0 million during the six months ended June 30, 2025 as compared to the prior-year period. The increase was primarily due to higher accretion of property-level debt discounts and property-level interest expense associated with the consolidation of CoolSprings Galleria, Oak Park Mall and West County Center in December

2024. The increase was partially offset by lower interest expense on the secured term loan due to paydowns that have occurred since the prior-year period, as well as a lower variable interest rate in the current-year period.

During the six months ended June 30, 2025, we recognized a $22.9 million gain on sales of real estate assets related to the sales of Imperial Valley Mall, Monroeville Mall, Annex at Monroeville, three outparcels associated with the Monroeville Mall properties, a land parcel associated with Imperial Valley Mall and an outparcel. During the six months ended June 30, 2024 we recognized a $3.7 million gain on sales of real estate assets related to the sale of an anchor parcel.

Non-GAAP Measure

Same-center Net Operating Income

NOI is a supplemental non-GAAP measure of the operating performance of our shopping centers and other properties. We define NOI as property operating revenues (rental revenues and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs).

We compute NOI based on the Operating Partnership's pro rata share of both consolidated and unconsolidated properties. We believe that presenting NOI and same-center NOI (described below) based on our Operating Partnership’s pro rata share of both consolidated and unconsolidated properties is useful since we conduct substantially all our business through our Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of our common shareholders and the noncontrolling interest in the Operating Partnership. Our definition of NOI may be different than that used by other companies, and accordingly, our calculation of NOI may not be comparable to that of other companies.

Since NOI includes only those revenues and expenses related to the operations of our shopping center properties, we believe that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates, sales at our properties and operating costs and the impact of those trends on our results of operations. Our calculation of same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets in order to enhance the comparability of results from one period to another.

We include a property in our same-center pool when we have owned all or a portion of the property since January 1 of the preceding calendar year and it has been in operation for both the entire preceding calendar year and current year-to-date period. New properties are excluded from same-center NOI until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these criteria are categorized as excluded properties. We exclude properties which are under major redevelopment or are being considered for repositioning, and where we are working or intend to work with the lender on a restructure of the terms of the loan secured by the property or convey the secured property to the lender (“Excluded Properties”). As of June 30, 2025, Brookfield Square, Harford Mall, Laurel Park Place, and Southpark Mall were classified as Excluded Properties. The Promenade also was considered an Excluded Property because it was in the process of being sold.

Due to the exclusions noted above, same-center NOI should only be used as a supplemental measure of our performance and not as an alternative to GAAP operating income (loss) or net income (loss).

A reconciliation of our same-center NOI to net income for the three- and six-month periods ended June 30, 2025 and 2024 is as follows (in thousands):

(1) Adjustments are based on our Operating Partnership's pro rata ownership share, including our share of unconsolidated affiliates and excluding noncontrolling interests' share of consolidated properties.

Same-center NOI decreased 0.5% for the three months ended June 30, 2025 as compared to the prior-year period. The $0.5 million decrease for the three months ended June 30, 2025 compared to the same period in 2024 primarily consisted of a $2.7 million increase in revenues offset by a $3.2 million increase in operating expenses. Rental revenues were $2.6 million higher primarily due to higher minimum rents, percentage rents and tenant reimbursements in the current-year period. The increase in rental revenues was also impacted by a favorable variance in the estimate for uncollectable revenues during the current-year period as compared to the prior-year period. Property operating expenses increased in the current-year period primarily due to one-time real estate and franchise tax refunds received in the prior-year period, as well as higher non-contract exterior maintenance costs.

Same-center NOI decreased 1.4% for the six months ended June 30, 2025 as compared to the prior-year period. The $2.9 million decrease for the six months ended June 30, 2025 compared to the same period in 2024 primarily consisted of a $4.0 million increase in revenues offset by a $6.9 million increase in operating expenses. Rental revenues were $3.9 million higher primarily due to higher minimum rents and tenant reimbursements in the current-year period. The increase in rental revenues was also impacted by a favorable variance in the estimate for uncollectable revenues during the current-year period as compared to the prior-year period. Property operating expenses increased in the current-year period primarily due to one-time real estate and franchise tax refunds received in the prior-year period, as well as higher non-contract exterior maintenance costs.

Operational Review

The shopping center business is, to some extent, seasonal in nature with tenants typically achieving the highest levels of sales during the fourth quarter due to the holiday season, which generally results in higher percentage rents in the fourth quarter. Additionally, malls, lifestyle centers and outlet centers earn a large portion of their rents from short-term tenants during the holiday period. Thus, occupancy levels and revenue production are generally the highest in the fourth quarter of each year. Results of operations realized in any one quarter may not be indicative of the results likely to be experienced over the course of the fiscal year.

We derive the majority of our revenues from the malls, lifestyle centers and outlet centers. The sources of our revenues by property type were as follows:

Inline and Adjacent Freestanding Tenant Store Sales

Inline and adjacent freestanding tenant store sales include reporting mall, lifestyle center and outlet center tenants of 10,000 square feet or less and exclude license agreements, which are retail leases that are temporary or short-term in nature and generally last more than three months but less than twelve months. The following is a comparison of our same-center tenant sales per square foot for mall, lifestyle center and outlet center tenants of 10,000 square feet or less (Excluded Properties are not included in sales metrics):

Occupancy

Our portfolio occupancy is summarized in the following table (Excluded Properties are not included in occupancy metrics):

Leasing

The following is a summary of the total square feet of leases signed in the three- and six-month periods ended June 30, 2025 and 2024:

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Average annual base rents per square foot are based on contractual rents in effect as of June 30, 2025 and 2024, including the impact of any rent concessions. Average annual base rents per square foot for comparable small shop space of less than 10,000 square feet were as follows for each property type:

(1) Excluded Properties are not included.

Results from new and renewal leasing of comparable small shop space of less than 10,000 square feet during the three- and six-month periods ended June 30, 2025 for spaces that were previously occupied, based on the contractual terms of the related leases inclusive of the impact of any rent concessions, are set forth below. Rent concessions typically consist of periods of free rent. The impact of such concessions was not material for the period presented below.

(1) Includes malls, lifestyle centers, outlet centers, open-air centers and other.

(2) The change is primarily driven by malls.

New and renewal leasing activity of comparable small shop space of less than 10,000 square feet based on the lease commencement date is as follows:

Liquidity and Capital Resources

As of June 30, 2025, we had $288.0 million available in unrestricted cash and U.S. Treasury securities. Our total pro rata share of debt, excluding unamortized deferred financing costs and debt discounts, at June 30, 2025 was $2,598.9 million. We had $76.0 million in restricted cash at June 30, 2025 related to cash held in escrow accounts for insurance, real estate taxes, capital expenditures and tenant allowances as required by the terms of certain mortgage notes payable, as well as amounts related to cash management agreements with lenders of certain property-level mortgage indebtedness, which are designated for debt service and operating expense obligations. We also had restricted cash of $28.2 million related to the properties that secure the corporate term loan and the open-air centers and outparcels loan of which we may receive a portion via distributions semiannually and quarterly in accordance with the provisions of the term loan and the open-air centers and outparcels loan, respectively.

During the six months ended June 30, 2025, we continued to reinvest the cash from maturing U.S. Treasury securities into new U.S. Treasury securities. We designated our U.S. Treasury securities as available-for-sale. As of June 30, 2025, our U.S. Treasury securities have maturities through May 2026. Subsequent to June 30, 2025, we redeemed and purchased additional U.S. Treasury securities. See Note 15 for more information.

In January 2025, we acquired four Macy's stores for $6.2 million, which include land, buildings and improvements, for future redevelopment at the respective properties. Subsequent to June 30, 2025, we closed on the WPG acquisition for $178.9 million. See Note 15.

In January 2025, we sold Monroeville Mall and the Annex at Monroeville for $34.0 million. A portion of the proceeds from the sale were used to paydown the open-air centers and outparcels loan by $7.1 million. In February 2025, we sold Imperial Valley Mall for $38.1 million. Net proceeds from the sale were used to paydown the secured term loan principal balance by $41.1 million. In June 2025, we sold 840 Greenbrier Circle for $3.5 million. Also, during the six months ended June 30, 2025, we sold three outparcels which generated $4.0 million in gross proceeds at our share. Subsequent to June 30, 2025, we sold The Promenade for $83.1 million. Proceeds from the sale of The Promenade were used to fund the WPG acquisition. See Note 15.

During the six months ended June 30, 2025, we exercised the extension options on two loans and entered short-term loan extensions for two loans. In March 2025, we were notified by the lender that the loan secured by The Outlet Shoppes at Laredo was in default and we are in discussions with the lender regarding a loan modification. In March 2025, the Alamance Crossing East foreclosure process was completed. Alamance Crossing East had an outstanding loan balance of $41.1 million prior to completion of the foreclosure process. Subsequent to June 30, 2025, we closed on a new $78.0 million, five-year non-recourse loan secured by Cross Creek Mall and the loan secured by Southpark Mall entered default and the property was placed into receivership. See Note 15. Subsequent to June 30, 2025, we completed a modification and extension of the existing $333.0 million non-recourse open-air centers and outparcels loan, which was scheduled to initially mature in June 2027. The loan was modified to include the WPG acquisition properties, increasing the principal balance by $110.0 million to $443.0 million and extending the initial maturity through October 2030, with one, two-year extension option for a final maturity in October 2032. See Note 15 for more information.

We paid common stock dividends of $0.40 per share in each of the first and second quarters of 2025. Additionally, our board of directors declared a special dividend of $0.80 per share of common stock, which was paid in cash during the first quarter of 2025. The special dividend was made to ensure that we meet the minimum requirement to maintain our status as a REIT. Subsequent to June 30, 2025, our board of directors authorized a 12.5% increase in the regular common dividend to an annualized rate of $1.80 per share for the quarter ending September 30, 2025. See Note 15.

As of June 30, 2025, our total share of consolidated, unconsolidated and other outstanding debt, excluding debt discounts and deferred financing costs, maturing during 2025, assuming all extension options are elected, is $127.7 million, and our total share of consolidated, unconsolidated and other outstanding debt, excluding debt discounts and deferred financing costs, that matured prior to 2025, which remains outstanding at June 30, 2025, is $46.9 million, consisting of two property-level loans.

Cash Flows - Operating, Investing and Financing Activities

There was $204.5 million of cash, cash equivalents and restricted cash as of June 30, 2025, an increase of $63.3 million from June 30, 2024. Of this amount, $100.3 million was unrestricted cash and cash equivalents as of June 30, 2025. Also, at June 30, 2025, we had $187.7 million in U.S. Treasuries with maturities through May 2026.

Our net cash flows are summarized as follows (in thousands):

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Cash Provided By Operating Activities

Cash provided by operating activities increased primarily due to the consolidation of CoolSprings Galleria, Oak Park Mall and West County Center in December 2024. The increase was partially offset by the sales of the Layton Hills properties, the Monroeville properties and Imperial Valley Mall since the prior-year period.

Cash Provided By Investing Activities

Cash provided by investing activities increased primarily due to the sales of the Layton Hills properties, the Monroeville properties, Imperial Valley Mall and 840 Greenbrier Circle since the prior-year period, as well as a higher amount of net redemptions of U.S. Treasury securities during the current-year period. The increase was partially offset by a higher amount of additions and acquisitions of real estate assets during the current-year period.

Cash Used In Financing Activities

Cash used in financing activities increased primarily due to an increase in principal payments and the payment of a first quarter 2025 special dividend during the current-year period as compared to the prior-year period. This increase was partially offset by repurchases of common stock that occurred in the prior-year period under the previous stock repurchase program.

Debt

The following tables summarize debt based on our pro rata ownership share, including our pro rata share of unconsolidated affiliates and excluding noncontrolling interests’ share of consolidated properties. Prior to consideration of unamortized deferred financing costs or debt discounts, of our $2,598.9 million outstanding debt at June 30, 2025, $2,575.3 million constituted non-recourse debt obligations and $23.6 million constituted recourse debt obligations. We believe the tables below provide investors and lenders a clearer understanding of our total debt obligations and liquidity (in thousands):

(1) As of December 31, 2024, represents the outstanding loan balances for Alamance Crossing East. The property was deconsolidated due to a loss of control when the property was placed into receivership in connection with the foreclosure process. The foreclosure process was completed in March 2025.

(2) Weighted-average interest rate excludes amortization of deferred financing costs.

(3) The interest rate is a fixed 6.95% for half of the outstanding loan balance, with the other half of the loan bearing a variable interest rate based on the 30-day SOFR plus 4.10%. The Operating Partnership has an interest rate swap on a notional amount of $32,000 related to the variable portion of the loan to effectively fix the interest rate at 7.3975%. Subsequent to June 30, 2025, we completed a modification and extension of the existing loan. See Note 15 for more information.

(4) In conjunction with the acquisition of the Company's partner's 50% joint venture interests in CoolSprings Galleria, Oak Park Mall and West County Center and the implementation of fresh start accounting upon emergence from bankruptcy, the Company estimated the fair value of its mortgage notes with the assistance of a third-party valuation advisor. This resulted in recognizing a debt discount, which is accreted over the term of the respective debt using the effective interest method.

The weighted-average remaining term of our total share of consolidated and unconsolidated debt, excluding debt discounts and deferred financing costs, was 2.0 years and 2.4 years at June 30, 2025 and December 31, 2024, respectively. The weighted-average remaining term of our pro rata share of fixed-rate debt, excluding debt discounts and deferred financing costs, was 2.7 years and 3.0 years at June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 and December 31, 2024, our total share of consolidated and unconsolidated variable-rate debt, excluding debt discounts and deferred financing costs, represented 34.0% and 34.5%, respectively, of our total pro rata share of debt, excluding debt discounts and deferred financing costs.

See Note 8 to the condensed consolidated financial statements for information concerning activity related to unconsolidated affiliates. Subsequent to June 30, 2025, we closed on a new $78.0 million, five-year non-recourse loan secured by Cross Creek Mall and the loan secured by Southpark Mall entered default and the property was placed into receivership. See Note 15. Subsequent to June 30, 2025, we completed a modification and extension of the existing $333.0 million non-recourse open-air centers and outparcels loan, which was scheduled to initially mature in June 2027. The loan was modified to include the WPG acquisition properties, increasing the principal balance by $110.0 million to $443.0 million and extending the initial maturity through October 2030, with one, two-year extension option for a final maturity in October 2032. See Note 15 for more information.

Equity

We paid common stock dividends of $0.40 per share in each of the first and second quarters of 2025. Additionally, our board of directors declared a special dividend of $0.80 per share of common stock, which was paid in cash during the first quarter of 2025. The special dividend was made to ensure that we meet the minimum requirement to maintain our status as a REIT. The decision to declare and pay dividends on any outstanding shares of our common stock, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our board of directors and will depend on our earnings, taxable income, FFO, liquidity, financial condition, capital requirements, contractual prohibitions or other limitations under our then-current indebtedness, the annual distribution requirements under the REIT provisions of the Internal Revenue Code, Delaware law and such other factors as our board of directors deems relevant. Any dividends payable will be determined by our board of directors based upon the circumstances at the time of declaration. Our actual results of operations will be affected by a number of factors, including the revenues received from our properties, our operating expenses, interest expense, capital expenditures and the ability of the anchors and tenants at our properties to meet their obligations for payment of rents and tenant reimbursements.

Subsequent to June 30, 2025, our board of directors authorized a 12.5% increase in the regular common dividend to an annualized rate of $1.80 per share for the quarter ending September 30, 2025. See Note 15.

Capital Expenditures

The following table, which excludes expenditures for developments, redevelopments and expansions, summarizes our capital expenditures, including our share of unconsolidated affiliates' capital expenditures, for the three and six months ended June 30 2025 compared to the same period in 2024 (in thousands):

(1) Tenant allowances primarily relate to new leases. Tenant allowances related to renewal leases were not material for the periods presented.

Annual capital expenditures budgets are prepared for each of our properties that are intended to provide for all necessary recurring and non-recurring capital expenditures. We believe that property operating cash flows, which include reimbursements from tenants for certain expenses, and readily available cash on hand will provide the necessary funding for these expenditures.

Developments

Properties Under Development at June 30, 2025

(Dollars in thousands)

(1) Total Cost is presented net of reimbursements to be received.

(2) Cost to Date does not reflect reimbursements until they are received.

Off-Balance Sheet Arrangements

Unconsolidated Affiliates

We have ownership interests in 23 unconsolidated affiliates as of June 30, 2025 that are described in Note 8 to the condensed consolidated financial statements. The unconsolidated affiliates are accounted for using the equity method of accounting and are reflected in the condensed consolidated balance sheets as investments in unconsolidated affiliates.

The following are circumstances when we may consider entering into a joint venture with a third party:

• Third parties may approach us with opportunities in which they have obtained land and performed some pre-development activities, but they may not have sufficient access to the capital resources or the development and leasing expertise to bring the project to fruition. We enter into such arrangements when we determine such a project is viable and we can achieve a satisfactory return on our investment. We typically earn development fees from the joint venture and provide management and leasing services to the property for a fee once the property is placed in operation.
• We determine that we may have the opportunity to capitalize on the value we have created in a property by selling an interest in the property to a third party. This provides us with an additional source of capital that can be used to develop or acquire additional real estate assets that we believe will provide greater potential for growth. When we retain an interest in an asset rather than selling a 100% interest, it is typically because this allows us to continue to manage the property, which provides us the ability to earn fees for management, leasing, development and financing services provided to the joint venture.
• We also pursue opportunities to contribute available land at our properties into joint venture partnerships for development of primarily non-retail uses such as hotels, office, self-storage and multifamily. We typically partner with developers who have expertise in the non-retail property types.

Guarantees

We may guarantee the debt of a joint venture primarily because it allows the joint venture to obtain funding at a lower cost than could be obtained otherwise. This results in a higher return for the joint venture on its investment, and a higher return on our investment in the joint venture. We may receive a fee from the joint venture for providing the guaranty. Additionally, when we issue a guaranty, the terms of the joint venture agreement typically provide that we may receive indemnification from the joint venture or have the ability to increase our ownership interest.

See Note 12 to the condensed consolidated financial statements for information related to our guarantees of unconsolidated affiliates' debt as of June 30, 2025 and December 31, 2024.

Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the financial statements and disclosures. Some of these estimates and assumptions require application of difficult, subjective, and/or complex judgment about the effect of matters that are inherently uncertain and that may change in subsequent periods. We evaluate our estimates and assumptions on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our Annual Report on Form 10-K for the year ended December 31, 2024 contains a discussion of our critical accounting policies and estimates in the Management's Discussion and Analysis of Financial Condition and Results of Operations section. There have been no material changes to these policies and estimates during the six months ended June 30, 2025. Our significant accounting policies are disclosed in Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Non-GAAP Measure

Funds from Operations

FFO is a widely used non-GAAP measure of the operating performance of real estate companies that supplements net income (loss) determined in accordance with GAAP. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) (computed in accordance with GAAP) excluding gains or losses on sales of depreciable operating properties and impairment losses of depreciable properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests. Adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests are calculated on the same basis. We define FFO as defined above by NAREIT. Our method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

We believe that FFO provides an additional indicator of the operating performance of our properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of real estate assets have historically risen or fallen with market conditions, we believe that FFO enhances investors’ understanding of our operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of our properties and interest rates, but also by our capital structure.

We believe FFO allocable to Operating Partnership common unitholders is a useful performance measure since we conduct substantially all our business through our Operating Partnership and, therefore, it reflects the performance of our properties in absolute terms regardless of the ratio of ownership interests of our common shareholders and the noncontrolling interest in our Operating Partnership.

In our reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders that is presented below, we make an adjustment to add back noncontrolling interest in income (loss) of our Operating Partnership in order to arrive at FFO of the Operating Partnership common unitholders.

FFO does not represent cash flows from operations as defined by GAAP, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income (loss) for purposes of evaluating our operating performance or to cash flow as a measure of liquidity.

We believe that it is important to identify the impact of certain significant items on our FFO measures for a reader to have a complete understanding of our results of operations. Therefore, we have also presented adjusted FFO measures excluding these significant items from the applicable periods. Please refer to the reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders below for a description of these adjustments.

The reconciliation of net income attributable to common shareholders to FFO allocable to Operating Partnership common unitholders for the three and six months ended June 30, 2025 and 2024 is as follows (in thousands):

(1) In conjunction with the acquisition of our partners' 50% joint venture interests in CoolSprings Galleria, Oak Park Mall and West County Center and the implementation of fresh start accounting upon emergence from bankruptcy, we recognized debt discounts equal to the difference between the outstanding balance of mortgage notes payable and the estimated fair value of such mortgage notes payable. The debt discounts are accreted as additional interest expense over the terms of the respective mortgage notes payable using the effective interest method. We began recognizing the debt discount accretion associated with the consolidation of CoolSprings Galleria, Oak Park Mall and West County Center during the six months ended June 30, 2025.

(2) Represents our share of the earnings (losses) before depreciation and amortization expense of unconsolidated affiliates where we are not recognizing equity in earnings (losses) because our investment in the unconsolidated affiliate is below zero.

(3) Represents a credit to litigation settlement expense related to claim amounts that were released pursuant to the terms of the settlement agreement related to the settlement of a class action lawsuit.

(4) The three and six months ended June30, 2025 includes default interest on loans past their maturity dates.

(5) During the six months ended June 30, 2025, we made a partial paydown on the open-air centers and outparcels loan and recognized loss on extinguishment of debt related to a prepayment fee.

The increase in FFO, as adjusted, for the three and six months ended June 30, 2025 was primarily driven by the consolidation of CoolSprings Galleria, Oak Park Mall and West County Center in December 2024. The increase was partially offset by the sales of Imperial Valley Mall, the Layton Hills properties, Annex at Monroeville and Monroeville Mall.

We are exposed to various market risk exposures, including interest rate risk. The following discussion regarding our risk management activities includes forward-looking statements that involve risk and uncertainties. Estimates of future performance and economic conditions are reflected assuming certain changes in interest rates. Caution should be used in evaluating our overall market risk from the information presented below, as actual results may differ.

Interest Rate Risk

As discussed in greater detail in Note 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, the Company uses interest rate swaps to manage its interest rate risk. Based on our proportionate share of consolidated and unconsolidated variable-rate debt at June 30, 2025, a 0.5% increase or decrease in interest rates on variable-rate debt would increase or decrease annual interest expense by approximately $4.4 million.

Based on our proportionate share of total consolidated, unconsolidated and other debt at June 30, 2025, a 0.5% increase in interest rates would decrease the fair value of debt by approximately $14.9 million, while a 0.5% decrease in interest rates would increase the fair value of debt by approximately $15.3 million.

Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report, an evaluation was performed under the supervision of our Chief Executive Officer and Chief Financial Officer and with the participation of our management, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. The Company's disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and to ensure that information we are required to disclose is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other information set forth in this report, you should carefully consider the risks that could materially affect our business, financial condition or results of operations that are discussed under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024. The risk factor set forth below updates, and should be read together with, such risk factors.

International trade disputes, including U.S. trade tariffs and retaliatory tariffs, could adversely impact our business.

International trade disputes, including threatened or implemented tariffs imposed by the United States and threatened or implemented tariffs imposed by foreign countries in retaliation, could adversely impact our business. Many of our tenants sell imported goods, and tariffs or other trade restrictions could materially increase costs for these tenants. To the extent our tenants are unable to pass these costs on to their customers, our tenants’ operations could be adversely impacted, which among other things, could weaken demand by those tenants for our real estate. If the operations of potential future tenants are similarly adversely impacted, overall demand for our real estate may also weaken. In addition, international trade disputes, including those related to tariffs, could result in inflationary pressures that directly impact our costs, such as costs for steel, lumber and other materials applicable to our redevelopment projects. Trade disputes could also adversely impact global supply chains which could further increase costs for us and our tenants or delay delivery of key inventories and supplies.