Good morning and welcome to the CBL & Associates Fourth Quarter 2015 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note today’s event is being recorded. I’d now like to turn the conference over to Katie Reinsmidt, Senior Vice President of Investor Relations and Corporate Investments. Please go ahead ma'am.

Thank you, and good morning. We appreciate your participation in the CBL & Associates Properties, Inc. conference call to discuss fourth quarter and full-year results. Joining me today are Stephen Lebovitz, President and CEO; and Farzana Mitchell, Executive Vice President and CFO. I’ll begin by reading our Safe Harbor disclosure and then will turn it over to Stephen for his remarks. This conference call contains forward-looking statements within the meaning of the Federal Securities Laws. Such statements are inherently subject to risks and uncertainties. Future events and actual results, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. We direct you to the Company’s various filings with the Securities and Exchange Commission, including without limitation, the Company’s most recent Annual Report on Form 10-K. During our discussion today, references made to per share amounts are based on a fully diluted converted share basis. During this call, the Company may discuss non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each non-GAAP financial measure to the comparable GAAP financial measure will be included in today’s earnings release that is furnished on Form 8-K along with the transcript of today’s comments and additional supplemental schedule. This call will also be available for replay on the Internet through a link on our Web site at cblproperties.com.

Thank you, Katie, and good morning, everyone. CBL’s year-end 2015 results clearly demonstrate the ongoing strength of our Company and our portfolio. I’m proud of our organization for what we accomplished. As a result of hard work and dedication, we overcame significant obstacles and end of year with solid results. We are in the process of transforming CBL by transforming our portfolio and our properties. Contrary to what many analysts have written, we’ve not abandoned our plans to dispose a slower growth properties. In fact, we’re just as committed to this plan as when we made our announcement in April 2014. While the investment community likes to simplify malls as letter grades to determine viability, the reality is that our shopping centers are more than just places to shop. We are in the real estate business, not the retailing business. Our properties are the suburban Town Centers for their communities, with market dominant franchise locations. And we have tremendous opportunities to create significant value, the redevelopment, expansions, and densification. We ended 2015 with strong results, generating same-center NOI growth of 2% for the fourth quarter, bringing full-year growth to 70 basis points. We showcased our operating expertise by overcoming the more than $15 million impact from the major retail bankruptcies we saw in Q1 and releasing more than 70% of these locations. We also significantly narrowed the occupancy impact of these bankruptcies. We started the year with a decline of 320 basis points in the first quarter. We ended the year with mall occupancy of 93.3% representing 160 basis point decline from last year and 170 basis point increase from third quarter. Overall portfolio occupancy ended 2015 at 93.6%, a decrease of 110 basis points compared to 2014 and 120 basis point increase from third quarter. We executed more than…

Thank you, Stephen. We are upgrading our properties with exciting new stores and restaurants. In 2015 alone we added more than two dozen boxes and junior anchors we opened 10 H&M stores, including five in the first quarter and have 10 more on Gap for 2016. We also opened two Dick’s Sporting Goods, four ULTA’s, Dunham Sporting Goods and academy sports and Hobby Lobby, just to name a few. New restaurants joined our center such as Cheddar's, Travinia's, and Panera Bread. And our portfolio continues to offer excellent opportunities to create value through merchandising upgrades as well as redevelopments in exchange. And our portfolio continues to offer excellent opportunities to create value through merchandising upgrades, as well as redevelopments and expansion. For any doublers of the power of an the power of anchor redevelopment, a great example of our investment at Northgate mall which was elevated to a Tier 2 mall in 2015. We redeveloped under utilized portions of the mall adding a 60,000 square foot Burlington in October 2014, as well as additional shops and restaurants. We invested in a renovation with new floors, paints in entrances among other improvements. As a result of these initiatives, the occupancy at Northgate has increased from 71% at year-end 2013 to 96% at the end of 2015. Sales had increased from $291 per square foot to $326, and NOI has increased significantly. Using Green Street’s cap rate scale for consistency, the increased NOI and cap rate compression generated by the reader Laverne activity has created value of more than 1.5 times our $16 million investment. We are also proactively reducing exposure to traditional anchors where they are underperforming. At College Square in Morristown, Tennessee we worked with JC Penney to negotiate a lease termination. We have leases out for signature with two…

Thank you, Katie. 2015 ended on a strong note for CBL, especially given the more than $15 million impact from store closures at the start of the year. Same-center NOI increased by 2% for the quarter and .7% for the year. Adjusted FFO increased 6% for the quarter to $0.71 per share and we achieved adjusted FFO of $2.32 per share for the year, meeting the high-end of our guidance range. Major drivers in the quarter and for the year included growth and minimum rents from increased rental rates and new openings. Percentage rents declined in the quarter as retail sales moderated, but ended the year positive. We also reported a decline in tenant reimbursement for the quarter and year, correlated to lower operating expenses including snow removal expense as well as utility and central energy. FFO benefited from $4.8 million in interest expense savings in the quarter and over $10 million for the year. FFO growth from our existing properties and New Centers more than offset the dilution from asset sales. D&A for the -- for 2015 was in line with our guidance range, discussed last quarter at approximately $59 million net of litigation expense. The increase during the year was primarily a result of one-time items including consulting expense for operational improvements. Our Cost recovery ratio for the fourth quarter was 108.6% compared with 102.1% in the prior year period. While fourth quarter 2015 was higher than our typical run rate, it benefited from improved recoverable expenses. For the year, our cost recovery ratio was in line at 101.7% compared with 98.9% in 2014. Same-center NOI growth in the quarter increased 2% for the total portfolio and 1.6% in the mall portfolio. Full-year same-center NOI growth was 70 basis points with malls up 20 basis points. Same-center revenue…

Thank you, Farzana. Well, 2015 started with tremendous challenges. Today we are a stronger company with a better portfolio and a more flexible balance sheet, and we remain focused on becoming an even stronger company. We are transforming the organization in our portfolio for the better and we are focused on making the right decisions for the long-term growth of CBL. As senior management and 11.5% shareholders, our goal is to help the market recognize the value that we know is in our portfolio and Company. We expect to demonstrate this value as we execute on our strategic objectives. Thank you again for joining us this morning and we will be happy to take questions.

Thank you, sir. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Christy McElroy of Citi. Please go ahead.

Hi, good morning. Just regarding the decline in percentage rents year-over-year in Q4, can you break out your sales growth isolating Q4 ’15 over Q4 ’14? And Farzana, you mentioned softer sales growth potentially impacting percentage rents in 2016. What are you forecasting within your guidance for percentage rent growth?

Hi, Christy. For percentage rent growth for 2016 and the guidance of the low end, we're flat to down as I’ve mentioned in my comments. And so on the higher end, hopefully we'll make up percentage rents and sales will continue the trends and get better and we will pickup some more percentage rents at the higher end. That’s one of the pressures we mentioned for the guidance at the low end of the range.

And then on the fourth quarter this year versus last year, we’re up 1.6%. So like I’ve said, we saw some deceleration in sales growth as we got into the fourth quarter compared to the earlier part of the year.

Okay. And then just thinking about your occupancy expectations, I think you mentioned that -- correct me if I'm wrong, but Stephen I think you mentioned 70% of the bankruptcy pace has been addressed. But then when you think about the 160 basis point negative occupancy Delta for malls at year-end, and I think you’re talking about 25 to 75 basis points of upside in 2016. It looks like by year-end, you’re still not sort of getting back to that 2014 level pre-bankruptcy. So maybe you can kind of give us some color on the release and progress of that space. And maybe what you’re expecting in terms of further store closings this year, despite that there is not many bankruptcies.

Sure. Well, the 70% -- a lot of that is kicking in for next year, but we are replacing stores that have closed. So that's not helping us gain over where we had been before. So it's getting us back to where we have been and with the 75 basis points where within 40 basis points of were we were at the beginning of last year. So we're not saying we will be a 100% done with the backfill by the end of this year, but will most of the 70% will kick in and then at 30% we will see towards the end of this year into next year. So we’re chipping away and obviously the ones that are tougher to do are the ones that get on last and that were very focused on getting those basis backfilled and getting the right mix of stores in there and trying to have a stronger credit quality in our retail mix going forward like I’ve talked about. And also like I said, we haven’t had the bankruptcies this year knock on wood so far and we’re hoping it will continue that way. It seems like there have been more in the big boxes this year compared to some of the specialty stores which is a positive for us. We are seeing good activity on the leasing front. Yes, there is the documented Gaps and Finish Line closures, in Abercrombie and they’re continuing to downsize their fleet, but at the same time we’ve got our strongest retailers that are expanding. Well, there it’s L Brands or foot Locker or the Jewelry or Cosmetics categories, there is a lot of positives that we’re seeing. We are seeing a lot of just new activity in general from -- just this new types of retailers. We are seeing more locals and regionals that are adding stores and we’ve seen in the past and that’s a positive and it differentiates the properties just to have something different in there. So it's a positive outlook that we have as far as leasing for this year.

And just lastly, Stephen, it seems like both within the release and in your comments, you’re definitely taking a little bit more of a cautious tone, given the current environment. Have you had in for the next year, what are the main sort of trends within your portfolio that you’re kind of keeping an eye on that would potentially make you more cautious or more optimistic?

I would say on the cautious front, it’s really that overall economy and a lot of the macro headwinds and the volatility in the markets, but the stock markets and the debt markets and the debt markets have been as everyone knows they’ve been very difficult at the end of last year and the start of this year. The equity markets have been tough. So that’s something that it had an impact on consumer sentiment, December spending was slow for retail sales and so we’re watching that and that’s why as Farzana said we’re cautious in our percentage rent projections, and specialty leasing is another area that we had some decreases last year and we’re cautious about that. So just kind of given where the general economy is, we feel like this is a time to be conservative and cautious in our outlook. On the other hand, we are optimistic and positive and we totally don't get the concerns have been voiced about malls going away and online taking over, bricks and mortar and that's just -- it’s something that we are not seeing at all. Our peers also have said the same thing. Our parking lots were jammed over Christmas. The traffic was strong. We are seeing demand from all types of new retailers that have never opened stores before that are online only and are wanting to open a bricks and mortar presence and force their business. The department stores, yes, they’re closing a few, but we’ve had a great track record of redeveloping and it allows us to bring in new boxes and uses. So we feel very bullish about our business going forward, despite what the market seems to be saying.

Thank you so much.

Thanks, Christy.

And our next question comes from Craig Smith of Bank of America. Please go ahead.

Yes, I was wondering what your expectations are for leasing spreads in 2016, particularly related to 2015?

Hey, Craig, good morning. So we’re -- as Farzana indicated, especially on the renewal spreads we feel like that will be comparable to what they were, so low single digits. We are seeing some pressure on renewal spreads in some of the portfolio deals we are doing with retailers that are struggling and -- like an Aeropostale [ph] that had difficult sales over the past few years, so that’s impacting the renewal spreads. And then the new leasing spreads, we continue -- we expect to continue to be high teens, low 20s like they have been. So I would say on average we are probably going to be in the mid-single digits.

Okay. And then, maybe just a little color on Cary Town Center. I know that you’ve been working on replacing the Sears, and now you are looking at the Macy’s? What -- maybe just broad picture what are you planning to do with that center?

Sure. Well, Cary Town Center is in a great location. The market is terrific. The household income in that area is high. There is a lot of positive demographics. Our redevelopment plan is in process and we’re working closely with the city to refine it. So I can’t give any details, but we’re working on a rezoning that would allow us to add some other uses to the center. We have strong demand from other mixed users that would diversify the mix of that center and it would be less of an exclusive retail center and more of a mixed use center and we’ve actually just recently secured the approval to redevelop a pad that’s been vacant for several years and we’ve got of lot of strong interest from restaurants and other users for that. So it’s a redevelopment that is work in process, but we think it got a lot of potential going forward.

And I know this is how to say, but how long do you think it might take to get through maybe some zoning and entitlements that you need for even pushing your plan forward?

It will take better part of this year to get through the rezoning. I mean Cary is a town that cares a lot about the way its projects look and the appearance and the uses and we’ve a great partnership with them, but we want to go through the process and master plan it to end up with the most successful project going forward. So it’s not just going to happen over night.

Okay, thanks. I appreciate it.

Okay. Thank you.

And our next question comes from Omotayo Okusanya of Jefferies. Please go ahead.

Hi. Yes, this is Tayo with George. Just first up for me, I just wanted to talk a little bit about debt maturity. I mean, there is a detailed amount of debt coming up in the next 12 to 18 months. How should we really be thinking about how you plan to manage through that? Is the probability of refinancing do you expect to give back the keys on some assets?

I will tell you. How are you?

Good Farzana. How are you?

Great. Well let me answer your question. Yes, we do have some maturities. Significant maturities coming out, but I can’t break it down for you. As I mentioned, the loans that we intend to pay off, that’s approximately only $230 million.

Yes.

And the others are the loans that Chesterfield loan that I just discussed. And couple of other loans like the renaissance center of not Renaissance, I’m sorry, Gulf Coast Town Center as well as Triangle, they will get repositioned here fairly soon. So Triangle Town Center will have a modified loan, and then the Gulf Coast will go away. So those are the other lender consideration that we call them, around $200 million. And we have joint venture loans maturing that we will refinance later this year. So between the refinance and the loan payoff and the lender properties we will be covered.

Okay. Thanks. George also had a couple of questions.

Just one thing on the potential mixed-use projects, I mean would these be more so Tier 1, Tier 2 or Tier 3 assets?

Good morning. It’s really all the above, and its market driven. And we’re not converting the malls to complete mixed-use projects, but we are adding different uses depending on the markets. And I talked about, we did the two apartment projects and we’re looking at other opportunities throughout the portfolio, and a lot of it depends on having the available land or the capacity to do it. So, if we’re able to recapture a department store then we’re looking at opportunities to add other uses in addition to retail. And the other thing is; we’re having like, like we talked about a lot of boxes, a lot of food, not retail uses like medical and education. So, I mean, the point is, there’s just a lot of activity because the real estate is so strong. We’ve got great locations. We’ve got really good road pattern and strong demographics, and we’re getting demand from not just retail uses to come into these properties.

Okay. And then just one last one, in terms of the stock buyback programs, sort of how are you guys viewing that now, because I mean, given where you are in terms of the cash flow needs?

Yes, right now like I said in the call that’s not our priority, de-leveraging is our priority. So to the extent we have free cash flow, we’re using it to reduce debt or to fund the redevelopment projects that we’ve announced. And we’re not saying we aren’t ever going to execute on the stock buyback program, but right now just given the volatility in the markets we think its better to save the powder for other opportunities.

Okay. Thanks.

And our next question comes from Caitlin Burrows of Goldman Sachs. Please go ahead.

Hi, good morning. Farzana, I know you already went through some of the financing assumptions for the year. But could you comment on whether we should expect your floating rate debt exposure to increase over 2016?

I would expect it to be probably the same expecting that we will be paying down our lines from some of the sale that we will receive from the, particularly Renaissance sale that will pay down, and then obviously we do have $230 million that we will be paying off which is fixed rate debt. It might go up during the year, but as we complete some other sales off the community centers that we have on tap that should probably put us at an even level.

Okay. And then as quick question just on the development pipeline. I saw that you guys have your -- the properties that were under development as of the end of the year, and then a few others that were in the shadow pipeline. And I was wondering if those were in the shadow pipeline because they just hadn’t started yet or if you were still waiting for some sort of threshold to make it those like a first shot go?

Caitlin, let me finish by saying that, that assumed the floating rate debt being at least even assumes that we do not execute on our public market transaction on the debt side. So I just want to make that comment.

Right. Okay.

Yes, and then Caitlin, these just -- they haven’t started yet. So they’re not near construction, but we anticipate them to start this year.

Okay. Thank you.

Sure. Thank you.

And our next question comes from Todd Thomas of KeyBanc Capital Markets. Please go ahead.

Hi, thanks. Good morning. Just following up on the retail environment. With regard to some of the apparel retailers, Abercrombie, Finish Line and some of the others you mentioned that discuss store closures. Any activity post yearend in your portfolio that you’ve seen or any expectation for store closures early in the year here? Any insight would be helpful.

Yes, now it’s a positive story. We’ve had conversations with retailers across the board whether they’re struggling or whether they’re doing well. And we’re really in close contact with those that we have on our watch list and that haven’t had the best sales, and they are not indicating store closures. They are continuing to be profitable in their stores and they have a plan. Aeropostale, has really -- they’ve had a tough couple of years, but the last six months we’ve seen progress from them. We even saw positive sales growth in a couple of centers in the fourth quarter that they’re investing in their stores. Justice, is another one owned by Ascena that had some -- had pretty double digit sales decreases, but they plan for that in the fourth quarter. They have a strategy for turning it around. And, so they have a positive outlook and have an indicated plans to close stores. Charlotte Russe was soft last year, but again they started to turn it around and we’ve seen good progress in them. So, I mean, we’re encouraged by what we’re seeing out there. And what we feel also is that by having the dominant mall or the only mall in the market that the retailers are going to keep the stores in our properties for the most part. And even if it’s a Tier 3 mall with lower sales per square foot their occupancy costs are lower and they’re making money, and they need that bricks and mortar footprint to enforce their army channel strategies. So we feel like we’re insulated because of that from a lot of the store closings. And you look at what Macy’s did and a lot of the stores they closed in their way, but closings was the fifth, sixth store in a market where they only need two or three. And our properties we have a dominant presence in our trade area. And the retailers aren’t cannibalizing from other locations. So we feel like we’re in a good position because of that.

Okay. So, in terms of thinking about the seasonal occupancy dip in the first half of the year that typically takes place. Do you think that between progress made on leasing space from last years bankruptcies and store closures and sort of the more, mute environment based on what you’re seeing so far this year. Could the drop in first quarter occupancy from the fourth quarter here in the ’16, could it be a little bit less than it has been historically?

Well, it’s going to be less then last year. But we -- it should be more like a run rate that you saw in ’14 or ’13, because we have the 10 H&Ms under construction. We take a lot of space offline during the first quarter to do the boxes like that and other larger retail uses and relocations that we’re doing. So we take some of that space offline in the first and second quarter so it can open for the third and fourth quarter. And then, most of our -- or not most, but a lot of our renewals happen at the end of January. So we do have the downtime for the ones that aren’t renewing when stores are coming in to replace them. So there’s always going to be that first quarter drop off, but again its not coming ever closer to what it was in ’15, and a lot closer to what it have been historically.

Okay. Farzana, is there a bankruptcy or bad debt reserve factor in the guidance? I think last year the number was $10 million. Obviously you had some visibility by the time of the fourth quarter call last year, but is anything factored into guidance this year?

Thank God, we don’t have that same number that we had last year. This year, we go through property-by-property, lease-by-lease, so they’re all baked in. So as a particularly extra reserve we have not taken that. So we’ve baked in already with our 0.5% to 2% same-center NOI increase that we guided you, and also in the FFO that is all baked in.

Okay. And just lastly then, looking at the renewal spreads the 1.8% in the quarter; you mentioned that there’s been some portfolio deals and some of the pressure you’re seeing on renewals. Can you just talk about the magnitude of the rent relief that’s being offered and how much of the renewal GLA included portfolio deals with some of these struggling retailers? I guess, any sense maybe I guess, what the breakout would be for renewal leasing in the quarter between like portfolio deals and just more ordinary leasing at market rates in terms of GLA and spreads?

Yes, I mean, that’s a tough one to answer to be honest, because there is a mix. We did the largest portfolio, we did in the fourth quarter was with Claire’s and that was 19 stores. They aren’t big stores, but that was 11% negative lease spread overall. So that definitely hurt us -- hurt our overall transaction. We offset a couple of or a large user who we did a renewal with them and relocated some stores and it -- on the comp store basis it was not a positive, and overall including the whole pro forma it was positive and that impacted our statistics. So there’s always a few outliers that happened, that seemed to impact the numbers, and we feel like we had more of those in the fourth quarter than we typically do. That being said, we have, first quarter we always have the most renewals and given where sales have been for some of the stores like I mentioned Aero or Justice or people like that, and the renewal leasing is going to be tougher. So that’s why we’re just trying to be more cautious as we look ahead to this year.

Okay. Thank you.

Thank you.

And our next question comes from Michael Mueller of J.P. Morgan. Please go ahead.

Hi. Just a quick one on dispositions. You talked about planning to sell more community centers during the course of the year. I was just wondering about, how much do you think we could expect for ’16 and maybe even into ’17?

It’s going to be about a $100 million including the Renaissance sale. The equity that we will raise from the community centers, that’s what we’re projecting right now.

Okay. So that’s a $100 million equity being raised in ’16, so that’s debt aside, this is just cash coming in the door?

That’s right.

Okay. That was it. Thank you.

Thanks, Mike.

And our next question comes from Carol Kemple of Hilliard Lyons. Please go ahead.

Good morning. On your malls that you want to sell, can you give us any kind of information how the market is out there and what you’re hearing from potential buyers is why they’re not going through with any deals?

Hi, Carol. Well, like I said in my remarks, we’re pushing hard to, on the mall dispositions, the debt markets have been the biggest challenge and -- but we do have activity there, and like we said in our last call, that as soon as we have something to announce we will be announcing it because we will happy to share that news, that good news with the market. But it’s not an easy market, its taking time, but we’re still seeing activity with potential buyers and there is debt available, it just takes longer and there is more hoops to jump through. So we’re pushing it hard and hope to be able to announce some things going forward this year.

Okay. And then on new leasing, can you talk about what retailers are seeing the most demand for -- from?

Sure. Well, H&M like I said we’re doing a lot with them, the cosmetic sector whether its ULTA, Sephora, stores like that. L Brands, Victoria’s Secret, PINK, Bath and Body, White Barn, they’re just a power house and they just keep on putting up unbelievable numbers. Optical is a strong category. Hot Topic and Torrid are doing very well. And then we’ve got some regional stores like I mentioned, Altered State out of Knoxville, we’re growing with them and they’re doing a great job. So there’s a lot of good activity out there.

Okay, great. Thank you.

Thank you.

And our next question comes from D.J. Bush of Green Street Advisors. Please go ahead.

Thank you. Steven, you mentioned you did a portfolio deal with Claire’s, obviously they are one of the retailers that’s been struggling. Certainly their bonds are trading like there is probably more of a stress to come. Why do a bigger deal with them as opposed to letting them move out and backfilling with a more viable retailer at this point?

I mean, I hear you on their bond as a corporation. But they are actually a really popular use in the properties. And girls, kids, I mean a lot of girls got their first earrings and their first ear piercing at Claire’s, and it’s got a viable business in the properties and they’ve had issues that aren’t only related to their performance. So and we’ve also seen some good improvement in their sales recently and so the trends are positive. So we look at all that, and at the same time, we’re trying to be proactive when we see weakness and line up replacements.

So you see it more of -- just the way the debt structure issues opposed to Claire’s is not really a growing concern for the mall, going forward?

Yes, I think they got overextended.

Okay. And then, the decline in the percentage of NOI in the Tier 3 assets was pretty significant from last quarter. Obviously some of those due to the composition, the addition of Mayfaire in Tier 1, the removal of Chesterfield, but it seems like some it has to be due to a pretty wide difference in NOI growth, I guess. Is that the case, and if so can you give us any color on what that magnitude could have been between the Tier 1 per say for instance versus Tier 3?

Well, I mean, its not -- I mean, it’s a little bit of a combination D.J. I mean, that’s definitely a factor. But the Tier 3 growth in NOI wasn’t that bad this year. I mean, there has always been a pretty linear relationship in terms of NOI growth from Tier 1 being the highest and Tier 3 being the lowest. But we didn’t see that significant or discrepancy this year. So it’s more driven by some of the disposition activity and the sales growth that we saw at a lot of Tier 3 properties then into Tier 2, and Katie talked about Northgate here in Chattanooga as a good example, Pearland in Houston was another example. So we’re just seeing some growth out of those properties that we really didn’t have on our disposition list, because we saw the potential.

So the composition changes when they move because of the sales growth and then, but and then as opposed to keeping them in the same Tiers, and there’s -- and a read through to what's going on from an NOI perspective?

Correct.

Okay. And then just a high level, you talk about -- you’ve talked about the department store rhetoric being overstated, and how the -- your dominant malls are the, I guess, only game in town malls are doing quite well, the traffic was up in the holiday season. Just from a high level perspective, how do you define only game town or your market dominant malls within your portfolio, is it really the only traditional mall in the market or do you look at all other retail types whether its streetscape, power centers, lifestyle centers. I guess how do you analyze that and kind of get comfortable with the fact that you have kind of the go to center in any given market?

It’s really all the above. We’re looking at all the competition. No, it’s not just the fact that we’re the only enclosed mall. I mean, its market share and its having the right location. I mean it’s different, its distance from competition. So Arbor Place in Atlanta has a dominant in its trade area, even though Atlanta has a lot of malls, but there’s not any mall for over 20 miles, and it really has a protected trade area that it serves. So it’s a lot of different factors that go into it.

Okay. Thanks guys.

Thank you.

Our next question comes from Collin Mings of Raymond James. Please go ahead.

Hi, good morning.

Good morning.

Two questions for me. I guess, first just a housekeeping question. It looks like the expected yield on your CoolSprings Galleria redevelopment ticked up a little up this quarter. Can you maybe touch on what's driving that?

Sure. Well, we got in our actual cost and we were able to save some of the construction -- some of the cost during construction. And we actually also did a little bit better on the actual rents for the final lease up, so we were able to improve that pro forma overall. We’re really happy with that.

Okay. And then just switching gears a little bit more back to the disposition strategy. I know you touched on it a little bit last quarter. But maybe just, can you provide an update on your thoughts about providing seller financing. And I think you mentioned in the past that you’ve looked at that or there might be some one off deals where you thought about using that strategy. Maybe just an update on your thinking there.

Yes, I mean, we -- like we said, we’ve been flexible in working with potential buyers. We’ve worked on joint venture structures like we are doing in Triangle and that’s something where we can take, if we need to keep a small piece we’ll do that. So our financing is something that we’re receptive to. Its just got to be, and we want it to be relatively short-term so that we see over the near-term period we’re going to be really selling the asset and not just basically doing a loan that we’re going to get something back in a couple of years.

Are there any discussions you’re having right now where that’s a meaningful component of potential transaction or not really?

Well, I just can't comment, but hopefully we’ll have some announcements and then we’ll be able to give you other details.

Okay. Thanks.

Thank you.

Our next question comes from Rich Moore of RBC. Please go ahead.

Hi. Good morning, guys. First, is the only consideration for doing a new bond the level of balance on the line of credit? And I reason I ask is more of your floating rate debt is in term loans, you can take some of that I guess and term it out,, I mean that’s the vast majority of it or you’re just thinking about a bond Farzana, if your line of credit reaches a certain level?

Rich, you’re right, and all the comments you already pretty much answered it. So, the consideration for bonds would be, if we drop too much on our lines we would like to reduce our floating rate debt. And you’re right, we can fix the term loans with a swap or as cap that’s easy to do, so we can reduce that exposure. That’s about $800 million in term loans. So, the reality is we don’t need to go to the bond market later this year if the market is not favorable and assuming we continue to get the equity from the sales we have teed up for our community centers. So you’re pretty much right what you just said.

Okay. So you don’t replace any of the term loans with permanent debt then. Is that right?

That’s right. Only the lines of credit, we’ll pay down the lines of credit.

Okay, got you. Okay, then on Chesterfield guys, I’m curious, what makes that different? I mean I realize it’s the closest to the two outlet centers in St. Louis, but when you think about the other malls you have in St. Louis, I mean and I guess people could get in the car and drive over to the outlet centers. How do we get comfortable that there aren’t issues at the other centers in St. Louis that are similar to what's going on at Chesterfield?

Yes, I mean the outlet centers are right, 3 miles away from Chesterfield, and you have two million square feet that were added, and from a competitive point of view it really hurt -- it really crossed Chesterfield, because a lot of the stores because of what happened there, Simon won the outlets, Taubman had all this square footage. Taubman started coming after all the Chesterfield stores and trying to get them and it just turned into a mess. And the other malls are further, a lot further away. West County actually is the closest, and West County is over 500 a foot, it’s with the Galleria, those are the strongest properties in the market by far, and we’ve seen sales increase there. They had an initial dip when the outlet opened, but they’ve come back strong. And then the other malls in St. Louis, St. Clair, it’s all the way on the other side of downtown. Its an hour away Mid River, South County also have, they’re farther away and they’ve got really strong trade areas that they serve.

Okay. So really Steven, the impact at Chesterfield is unique?

Correct.

Okay. All right, good. Thanks. And then, the last thing, I’m curious going back to the buyback for the second, and personally I’m not a big fan of REIT stock buyback plans. So I’m fine with that, that you haven’t done it. I think that was great. But I’m curious why you have that plan when your stock has obviously fallen significantly from when the time you put that in place. I mean, what is the purpose of having that plan if you wouldn’t buy stock back at this level, I guess?

Well, I mean, I think it’s great to have it as an option. And like I said, we’re exploring opportunities in addition to just selling the lower Tier joint ventures or other capital raising opportunities, and if we were able to realize one of these then that would be a great use especially at the stock price where we are. So, it’s just given the community center sales and the amount that we’ve realized so far and also the debt markets, it’s low on the priority but I think down the road we’re hoping that we can take advantage of where the stock price is and buy some back, because it’s such a great opportunity.

Okay, good. Thank you guys.

Thanks, Rich.

And our next question is from Linda Tsai of Barclays. Please go ahead.

Hi. The discrepancy in NOI growth between the Tier 1, 2 and 3 assets, would you expect this discrepancy to remain similar -- the level of discrepancy to remain similar in 2016 or do you think one or more Tier’s will grow faster than the others?

Yes. I mean the Tier 1 has historically grown faster, and we expect that to continue. And when we initially announced our plan in ’14, our goal was to go from 0 to 2 to 2 to 4, and having a higher concentration in Tier 1 and 2 is what gets us there. So that’s the pattern that we’ve seen and we would expect that to continue.

Would you expect Tier 3 to remain similar?

Well, Tier 3 because it’s shrinking as a percentage of our portfolio is less than the overall impact. So now we’re down to 11%. We’re hoping to push that down into single digit. So that should allow us to have better growth and it will be less of an impact.

Thanks. And then I realize you have many more malls than outlets, but any comments on over sales trends there versus the enclosed malls and maybe comments on traffic at both formats? This is during the holiday season.

Yes, the holiday season, it was pretty comparable. We saw -- we had good traffic at the malls and the outlets. The outlet in El Paso which is on the border had the toughest sales just because of the dollar and the impact of that. But Louisville, Atlanta both have really strong growth, and so -- and we’re seeing good traffic and the leasing is still strong and sales are doing well.

Thanks.

And our next question is a follow-up from Christy McElroy with Citi. Please go ahead.

Hi, it’s Michael Bilerman with Christy. Steven, I’m curious, you talked in some of your comments about not sort of understanding the markets focus on the obsolescence risk with your asset base and that the market is clearly sort of undervaluing the assets. And I guess when you step back from it, and you think about BAM taking Ralph’s private, and it’s not just your stock within your asset base that’s being impacted. But I guess, do you step back and say the public market perhaps is not the right sort of fit for your type of assets that you’re operating, and that is much more akin to a private market place. And I’ve been following the company for almost two decades and the first part of that decade your stock dramatically outperformed mall REITs as well as the REIT sector. It’s really been the last sort of nine years that you’ve seen this much larger discrepancy. So I guess when you step back from it with all these things going on, how do you think about the company being public versus private?

Yes, that’s a tough question. But yes look, I’d say that we’re very happy being a public company. We’re frustrated with our stock performance, and we do feel like there is a disconnect there, but we believe that the market over time will see the value of our properties, of our strategy and of our company. And we’re not in this for the short-term. Like I said, were 11.5% owners of this company, so we’re fully vested in it. And the Brookfield, Rouse thing for us just validated the opportunity because of the cap rate that they bought those properties at. And you’ve got Brookfield, a very smart savvy investor saying number one, that they’re comfortable with the malls in our Tier going forward, they’re putting significant money behind it, added a price that is dramatically above where we’re trading. So that was -- we thought a real positive for -- just for us and for the overall space. And look, public -- being public has been a great thing for us over our 20 plus year history. It’s given us a lot of opportunities and we’re excited about the future. Like I said of course, it’s frustrating to see where your stock -- where our stock has been trading, but we feel like this quarter was a really good quarter for us. We ended the year strong. It was a tough year, and we’re positive going forward.

Do you think the public markets in terms of trying to execute what you want to execute in terms of the sales and repositioning, it just maybe better done in private versus public where your assets do need a little bit more attention and then there’s just more -- there is a certain amount of uncertainty in the challenges that you’ve been dealing with the past couple of years?

I mean, having financial partners is part of the business and whether it’s a public or a private partner then they’re going to look at this, I think in a similar way. And the other thing is, things take time in real estate, they don’t happen over night, I wish they happened faster. But we did make some real progress on dispositions. The community centers are happening fast and the malls, we’ll work in the malls and we’re just going to continue to push our strategy. We think it’s the right strategy and hopefully we can make some meaningful progress and get it out there.

And just lastly on the stock buyback, and I recognize some of the power center sales and some of these other lower Tier mall sales will provide you some capital, obviously importantly to de-lever, but to execute on the stock buyback you talk about. Is there any thought, you go back a number of years where you had done the joint venture on some of your higher quality malls and I recognize doing that would enlarge the base of the others. But do you have -- given the fact that there is more capital and certainly partnership capital at the higher levels of your portfolio, would you sort of execute on that or would you entertain that to de-lever quickly and provide that capital if you really believe the stock is that discounted to be able to act today rather than wait? So I got to assume doing a joint venture on one of your top Tier malls is a lot easier than going to the process on some of the weaker assets?

Yes, I mean, we get our best growth from our Tier 1 properties. So we’re giving up the growth if we do that, and I think our sense is that, the market is giving us credit for those Tier 1 properties in our stock its more the Tier 2 and the Tier -- or the Tier 3, and even some of the Tier 2 now that they’re questioning.

Okay. All right. Thanks for the time.

Thanks, Michael.

And this concludes our question-and-answer session. I would like to turn the conference back over to Mr. Lebovitz for any closing remarks.

Thank you again for your time this morning, and we look forward to the rest of 2016. Have a great day.

Thank you, sir. The conference has now concluded, and we thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.