INVESTOR ALERT: Soreide Law Investigating CBL & Associates Properties, Inc. (NYSE: CBL)

Soreide Law Group is evaluating possible claims against brokers who advised investors to purchase CBL & Associates Properties, Inc. (NYSE: CBL), a publicly traded REIT responsible for managing a portfolio comprised of suburban town centers. Notably, CBL claims to be the largest manager and owner of Southeast United States-based shopping centers; and a major United States based mall REIT. Evidently, CBL plans to cut its dividend to shareholders because of settling a class action lawsuit for $90,000,000.00. Allegedly, both past and present tenants sued CBL claiming it overcharged them on utilities.

CBL Cuts Dividends After Settling Lawsuit For $90,000,000.00

Supposedly, CBL will not be making any dividend payments to shareholders over the next two quarters. Apparently, this will reportedly take effect in the third quarter of 2019. Worse yet, there is no assurances that the REIT will resume its dividends given its financial predicament. When news broke in March 2019 regarding CBL’s dividend cuts, its stock took a twenty percent nosedive.
Evidently, the REIT has been detrimentally affecting shareholders’ dividend payments since 2017. Specifically, the company’s cash problems led it to drop its quarterly dividend in 2017 from $0.265 to $0.20. In 2018, the quarterly dividend fell to $0.075. Additionally, a critical issue facing CBL includes its declining funds from operation (“FFO”), which went from a high of $2.41 in 2016 to $1.73 in 2018. Apparently, this figure could fall to $1.46 for 2019 based upon current projections.

CBL Detrimentally Affected By Sears And Bon-Ton Bankruptcies

Evidently, CBL contains sub-par quality malls, and mall traffic has faced noticeable declinesn. Not only that, but the REIT faces pressure from Sears Holdings and Bon-Ton Stores bankruptcies in 2018. Notably, Sears shuttered a large amount of its stores and Bon-Ton went through a full liquidation. As a result, the REIT sustained losses to its rents from Sears and Bon-Ton, and may need to expend additional resources to turn around vacant department stores.

Brokers Possibly Sold Unsuitable CBL Investments

Sometimes, brokers and advisors push customers into purchasing REIT products because of historically high yields on REITs. Also, brokers push REITS because of the larger commissions or fees brokers earn on the transactions. However, REIT products are speculative in nature and not intended for unsophisticated or risk-averse investors.
Have you experienced losses by investing in CBL because of your broker or adviser’s recommendations? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Our firm has recovered millions of dollars for investors who have suffered losses due to broker and brokerage firm misconduct. We represent clients on a contingency fee basis and advance all costs.