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CBL Speaks Out

What CBL & Associates Properties executive say in this story is true not just of CBL, but of many other retail REITs that have taken a beating in the stock market of late.

“It's incredibly low, and the dividend we pay is extremely high, so it should be an excellent, excellent investment for people if they're focused on real estate,” said John Foy, CBL's chief financial officer.

Mr. Foy said companies like CBL are unfairly hit harder than companies in other sectors. CBL is a real estate investment trust, which means the company must pay at least 90 percent of its earnings as dividends to investors in lieu of paying corporate taxes. CBL's dividend is $2.18 per share on an annual basis, said Mr. Foy and Katie Reinsmidt, director of corporate communications and investor relations.

“Yeah, we have taken a hit,” Mr. Foy said. “Every stock is not equal. They (investors) have painted all the REITs with a broad brush.”

Investors are concerned about debt levels, capital constraints and debts coming due, he said, but it's unfair to apply those concerns to all REITs, especially CBL.

An Oct. 9 report by analysts with Stifel, Nicolaus & Co. Inc., a brokerage and investment banking firm, said the equity market is dumping REIT stocks because of challenges facing General Growth Properties, which owns Northgate Mall and many others.

“GGP was and we believe is far more levered than any peer, and in our view made many mistakes that we believe are now attributed unfairly to the entire group,” the report states.

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