Financing deal supports leading shopping centers in smaller U.S. markets
CBL Properties has secured a major commercial mortgage-backed securities (CMBS) financing package from Goldman Sachs, backed by a portfolio of 13 shopping centers located in secondary and tertiary markets. The deal highlights renewed lender confidence in dominant regional malls.
Goldman Sachs provided $425 million in financing for enclosed malls—a segment that CMBS investors have largely overlooked in recent years in favor of larger properties in major metropolitan areas. The transaction, known as GS 2026-DAWN, launched this month with a fixed interest rate of 7.4% and a five-year term set to mature in 2031.
In addition to the CMBS financing, the deal includes a separate $176 million floating-rate bank loan, primarily secured by a group of CBL’s open-air lifestyle centers. Combined, these financing arrangements extend the company’s debt maturities and are expected to boost annual free cash flow by approximately $33 million, according to CBL.
The Chattanooga-based company also contributed $54 million in equity as part of the overall transaction.
According to Chief Financial Officer Ben Jaenicke, the financing provides greater flexibility for executing long-term strategic plans. He noted that improved cash flow and a more traditional loan structure position the company to pursue value-driven investments and generate stronger returns for shareholders.
The CMBS collateral includes 12 enclosed malls and one open-air shopping center spread across nine states and 12 markets. Texas holds the largest share of the loan allocation at 41%, followed by North Carolina at 17% and Pennsylvania at 11%, based on analysis from Morningstar DBRS.
Despite being located in smaller cities, these properties maintain strong competitive positions. According to Morningstar DBRS, each mall serves as the primary retail hub in its respective city and dominates its surrounding area within roughly a 20-mile radius.
The 13 properties represent a core part of CBL’s portfolio, contributing around 21% of the company’s total net operating income. Since 2019, CBL has invested approximately $57.7 million into these assets and plans to spend an additional $26.6 million on capital improvements through 2026 and 2027.
A significant share of the portfolio’s income is driven by three major malls. Hanes Mall in Winston-Salem contributes 17% of net cash flow, while Mall del Norte in Laredo accounts for 16.3%, and Sunrise Mall in Brownsville generates 14.8%.
Occupancy levels further reinforce the strength of the portfolio. As of December, the properties were 92% occupied based on total leasable space, a level that has remained consistent since 2019.
Source: Original reporting by Mark Heschmeyer, CoStar News.
