Macerich Q1 2025 Earnings Call Transcript

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter twenty twenty five Mace Rich Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising your hand is raised.

Operator

Please be advised that today's conference is being recorded. I would like now to turn the conference over to Samantha Greening, Assistant Vice President, Director of Investor Relations. Please go ahead.

Samantha Greening
Samantha Greening
AVP - Investor Relations at The Macerich Company

Thank you for joining us on our first quarter twenty twenty five earnings call. During this call, we will be making certain statements that may be deemed forward looking within the meaning of the Safe Harbor of the Private Securities Litigation Reform Act of 1995, including statements regarding projections, plans, and future expectations. Actual results may differ materially due to a variety of risks and uncertainties set forth in today's press release and our SEC filings. Reconciliations of non GAAP financial measures to the most directly comparable GAAP measures are included in the earnings release and supplemental filed on Form eight ks with the SEC, which was posted in the Investors section of the company's website at materich.com. Joining us today are Jack Shea, President and Chief Executive Officer Dan Swanstrom, Senior Executive Vice President and Chief Financial Officer and Doug Healy, Senior Executive Vice President of Leasing.

Samantha Greening
Samantha Greening
AVP - Investor Relations at The Macerich Company

And with us in the room is Brad Miller, SVP of Portfolio Management. And with that, I turn the call over to Jack.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

Thank you, Samantha, and good afternoon. We're pleased to discuss today the significant progress we continue to make executing on our path forward plan. I want to make sure everyone comes away with three main themes from this call. First, Macerich is a much better informed, aligned, and operationally focused company than ever before. Second, we are ahead of schedule on our leasing progress targets.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

This gives us a greater line of sight and confidence into the key operational, financial, and deleveraging metrics embedded in our path forward plan. And third, this leasing progress demonstrates how close we are to our major inflection point in mid-twenty twenty six, the point that indicates we would be substantially complete with the plan.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

When I set out

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

the path forward plan in July of twenty twenty four, the goal was to create a new Macerich. That required transforming the company by simplifying the business, improving operational performance, and reducing leverage. We put a mission statement in place to own and operate thriving retail centers that bring our communities together and create long term value for our shareholders, partners,

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

and

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

customers. We instill new corporate values of excellence, empowerment, integrity, optimism, relationships, and fun. Based on the results I've seen to date, I can attest to how well this mission and the corporate values have been embraced throughout the company. I also put in place a new structure that I talked about last quarter to streamline all our permanent specialty and department store leasing teams under one leadership and reporting structure, make our asset management team a standalone group, and place our property operations, marketing, and development under a new leadership structure. To ensure that these teams could collaborate seamlessly with real time tenant data and leverage the five year Argus models that the asset and portfolio management teams created for each property, We implemented a leasing dashboard that we refer to internally as the leasing speedometer.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

This tool and other technology enhancements we've implemented drive every leasing and capital allocation decision at our properties. Everyone at Mace Ridge is fully aligned on what we're doing. Over the past six to nine months, we have de risked the path forward plan by consolidating joint ventures, issuing equity, completing our refinancings, and executing on dispositions. Today, I'll talk about the data we have now that gives me the confidence that we're on track to deliver our 2028 leverage and earnings metrics. This data shows that we're also on track with the major milestones and catalysts that can be expected to help us reach our mid-twenty twenty six inflection point.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

Let's speak to leasing first. Leasing is the piece of the plan that best tracks the progress on hitting our 2028 targets. It is what I am most focused on today at Macerich. I believe that it is the most accurate predictor of Matrix's future success. I'm pleased to say that we are ahead of schedule on all our leasing efforts.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

I noted last quarter that we are targeting an average of 4,000,000 square feet of leasing in twenty twenty five and twenty twenty six. During the first quarter, we signed 2,600,000 square feet of leases, including 2,300,000 square feet of renewals. As Doug will describe in a moment, that's more than double the leases signed in the first quarter a year ago. Between commitments and LOIs, we are nearly done with our 2025 lease expirations. We are now well into 2026 lease expirations.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

We are also laser focused on a higher percentage of new lease deals versus renewals in our annual mix of business, as new deals will be the primary driver of higher spreads and incremental revenue to hit our NOI goal. We are tracking our progress on this front with two metrics: the new deal completion percentage that we track internally on our leasing speedometer and our snow pipeline. As laid out in our last quarter earnings call, our initial goal on new deals was 50% progress by mid twenty twenty five and seventy percent by year end 2025. Hitting the 70% goal by year end would put us on track for the mid 80% range by mid twenty twenty six. Reaching that goal also puts us on track for our ultimate opportunity to achieve the 130,000,000 in cumulative snow potential that I outlined last quarter.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

Reaching that mid twenty twenty six leasing goal would effectively complete the new leasing goal outlined in our original plan. As I noted earlier, we are ahead of this plan. As of last quarter, our leasing speedometer was at 39%. I'm pleased to report that we are currently at 60% for new deal completion and have a large pipeline of LOIs, which gives us tremendous confidence in hitting the 70% mark by year end. Last quarter, our snow pipeline was 66,000,000.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

That has now grown on a cumulative basis to $80,000,000 as of today, which puts us on track to achieve a total and cumulative snow pipeline of $100,000,000 by year end. Doug will provide additional details on our snow pipeline shortly. While we're on the topic of leasing, I want to address the inevitable question on tariffs and any impact we're seeing. I'll echo what many CEOs have already said this quarter, that we've seen minimal impact to date across the portfolio. We've had three strong executive leasing committees since early April and have touched base with all retailers with leases out, and virtually all are moving forward.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

In addition, we're in contact with existing tenants, and so far, there is no material effect on their business or inventories. We'll obviously continue to monitor these discussions and developments in real time. For our target of $2,000,000,000 of asset sales and loan givebacks, we continue to execute on targeted dispositions which strengthen the balance sheet, and I'm pleased with the substantial progress made by the team. Dan will provide an update on these activities shortly. We're approaching the balance of 2025 with a significant amount of confidence in the outcome and timing of our plan, as well as the clear conviction that we have de risked the elements of the path forward plan.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

This conviction is based on the fact that we have simplified the business by consolidating JVs, which also enabled us to execute the refinancing on Washington Square. Dispositions have reached a total of 1,100,000,000.0. We completed the equity raise ahead of plan, raising 500,000,000. Refinancings are ahead of plan for 1,000,000,000 in total. We've locked in lease escalations that are a massive part of the expected lift.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

And lastly, efforts to secure new leases are well ahead of plan. All we have remaining to achieve the plan is 50,000,000 of snow and completion of the remaining mall dispositions and givebacks, as well as the outparcel sales. I'm confident our leasing and asset management teams can deliver on these two remaining pieces. In conclusion, we have exceptional talent here at Macerich, and I'm pleased to see how well the team is collaborating using the tools and technology we've implemented. We are ahead of plan and have proven that we have the right process, strategies, and team in place with great retail centers that can drive rental rates with strong permanent occupancy.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

With that, I'll turn the call over to Doug.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

Thanks, Jack. Portfolio sales at the end of the first quarter were $837 per square foot, which is flat when compared to the fourth quarter twenty twenty four. However, when you exclude our Eddy properties, sales were $928 per square foot, which is up $13 compared to the last quarter. Traffic for the year is up 2% when compared to the same period in 2024. Occupancy in the first quarter was 92.6%, down from 94.1% when compared to the fourth quarter of twenty twenty four.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

Most

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

of

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

this decline is due to the decrease in temporary holiday stores, which closed at the end of twenty twenty four or during the first quarter twenty twenty five, as well as transitioning Fashion District Philadelphia from a development project back into same center occupancy. Portfolio occupancy, excluding our Eddy properties, was 95.2 for the quarter compared to 95.8% for the fourth quarter of twenty twenty four. Trailing twelve month leasing spreads as of 03/31/2025 were 10.9% versus 8.8% last quarter. This comprised of 22 spreads on new deals and 7% spreads on renewals. And this now represents 14 consecutive quarters of positive leasing spreads.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

Looking at the leasing spreads on a same space basis, spreads from new deals were 37.4%, and spreads from renewals were 1.3. In the first quarter, we opened 177,000 square feet of new stores while signing three twenty leases for 2,600,000 square feet. In terms of these lease signings, this represents 50% more leases and 160% more square footage than we signed in the first quarter of twenty twenty four. And just looking at new deals, it's almost 70% more leases and 180% more square footage than first quarter twenty twenty four. The best brands remain very active and continue to take advantage of great space and centers.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

To that end, in the first quarter we signed two flagship stores at Tysons Corner Center, a 45,000 square foot Zara and an 18,000 square foot Uniglo. Uniglo will open in late twenty twenty five and Zara in early twenty twenty six. Other notable signings in the first quarter include Aloe Yoga at Los Cerritos in Fantan Village, Abercrombie And Fitch at Broadway Plaza in the Village Of Corte Vedera, Aritzia at Los Cerritos, Rag And Bone at Fashion Outlets of Chicago, and Laurel Piana at Scottsdale Fashion Square. This list goes on, but these examples are reflective of the continued flight to quality that retailers are pursuing, especially in our portfolio. Now let's look at our Executive Leasing Committee, which reviews and approves deals on a biweekly basis.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

This is much more forward looking and a better representation of the current environment and retailer sentiment. To date, we've reviewed over 70% more new and renewal deals and 145% more square footage than we did during the same period last year. And if you look at new deals only, we reviewed twice the number of new deals and four times the square footage than we did during the same period last year. And keep in mind, once these deals are approved, they go to lease, get signed, and eventually become part of our signed not open pipeline.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

Turning to our lease expirations.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

To date, we have commitments on just about 80% of our twenty twenty five expiring square footage that is expected to renew and not close with another 16% in the letter of intent stage. So between commitments and LOIs, we're basically done with 2025 and now well into our 2026 lease expirations. As we all know, in the first quarter, Forever '20 '1 filed for bankruptcy. This being the only bankruptcy filing year to date in our portfolio. While Forever twenty one had a lot of square footage, they didn't pay a lot of rent.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

We've anticipated this liquidation of stores for some time and recapturing these stores will provide an excellent opportunity to remerchandise the space with higher and better uses, paying us significantly more rent. To

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

date, we

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

have commitments on just over 50% of the closed square footage, with another 10% in the letter of intent stage. With our commitments alone, we've already surpassed the rent Forever twenty one was paying. And when we finalize this entire backfill endeavor, we anticipate we should more than double the rent Forever twenty one was paying in the aggregate. Turning to our signed not open or SNOW pipeline, to date we have 148 signed leases for 1,200,000 square feet of new stores, which we expect to open between now and into early twenty twenty eight. In addition to these signed leases, we're currently negotiating leases that were previously approved in our executive leasing committee for new stores totaling just over 1,700,000 square feet.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

And these two will open between now and into early twenty twenty eight. So in total, that's nearly 3,000,000 square feet of new store openings throughout the remainder of this year and beyond. The leasing activity has grown our snow pipeline from $66,000,000 of last quarter to $80,000,000 today. I'm very pleased with this growth in just ninety days, and it gives me confidence that we will hit $100,000,000 by the end of the year. In 2025, we expect to realize approximately $25,000,000 of the current $80,000,000 pipeline.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

And of that $25,000,000 we've already realized $6,000,000 in the first quarter. The remainder of the $80,000,000 is anticipated to be realized between 2026 and early twenty twenty eight. Lastly, we're very excited to announce that we will be breaking ground this week on the redevelopment and expansion of Green Acres, which is located on Long Island in Valley Stream. This development is comprised of 370,000 square feet, which addresses 260,000 square feet of the vacant Sears and Coles boxes, along with the demolition of Sears TBA and parking deck. The project will open sight lines to the major highway in front of the mall and will include a new brand entrance along with an attractive streetscape showcasing outward facing shops as well as full service restaurants, quick service restaurants, grocery, entertainment, and service uses.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

Demand and pre leasing have been very strong with almost 50% of the project square footage committed and another 17% in the LOI stage. Tenants will open in phases beginning in 2026 with full completion by fall twenty twenty seven. So stay tuned for several exciting announcements in the very near future. And with that, I'll turn the call over to Dan to go through our first quarter financial results.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

Thanks, Doug, and good afternoon. I'll start with a review of first quarter financial results. FFO excluding financing expense in connection with Chandler Freehold, accrued default interest expense and loss on non real estate investments was approximately $87,000,000 or $0.33 per share during the first quarter of twenty twenty five, as compared to approximately $75,000,000 or $0.33 per share for the first quarter of twenty twenty four. The primary driver of the $12,000,000 increase in nominal FFO is higher leasing revenues, including from the net impact of JV interest acquisitions and dispositions activity, which more than offset increases in operating expenses and interest expense. I would like to highlight the following items included in our FFO adjusted for the quarter.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

Number one, dollars nine million of interest expense relates to the amortization of debt mark to market resulting from our various JV interest acquisitions. This non cash expense is included in interest expense. Number two, dollars two million of severance expense is included in management company's operating expense. And number three, dollars six million of legal claims net settlement income at one of our properties related to a construction design defect matter. We believe aggregate proceeds recovered are more than adequate to cover our proposed solution.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

This $6,000,000 is non recurring in nature and is included in other income. Same center NOI, excluding lease termination income, increased 0.9% in the first quarter of twenty twenty five compared to the first quarter of twenty twenty four. Excluding Eddie assets, same center NOI increased 2.4% year over year. Turning to the balance sheet. During the first quarter, we have made good progress on our path forward plan.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

We closed on a new $340,000,000 10 year mortgage loan on Washington Square at an attractive fixed interest rate of 5.58%. We used a portion of the net proceeds to repay the remaining first mortgage on Flatiron Crossing, which was approximately $72,000,000 at our share, and to repay the balance outstanding on our line of credit, which was 110,000,000 Flatiron was a 2025 maturity and inclusive of the $7,500,000 mezz loan in Flatiron that we paid off earlier in the quarter, carried an interest rate of just north of 9%. Flatiron is now unencumbered. For the balance of 2025, we have only one remaining maturing loan in November for approximately $200,000,000 And we'll continue to proactively address our remaining twenty twenty six debt maturities through a combination of potential asset sales, refinancings, loan modifications or loan give backs. We currently have approximately $995,000,000 of liquidity, including $650,000,000 of capacity on our revolving line of credit.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

From a leverage perspective, net debt to EBITDA at the end of the first quarter was 7.9 times, which is almost a full turn lower than at the outset of the path forward plan. And importantly, we've outlined our strategy to further reduce leverage to the low to mid six times range over the next couple of years. We continue to make substantial progress in executing on planned dispositions as part of the path forward plan. In March, we closed on the sale of Wilton Wall for $25,000,000 In April, we closed on the sale of South Park for 11,000,000 Both assets were unencumbered. We are currently under contract to sell Lakewood, which is expected to close in the second half of twenty twenty five, subject to customary closing conditions.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

We expect net proceeds to Maceridge of approximately $5,000,000 above the debt balance outstanding. These sales transactions are consistent with our stated disposition plan to improve the balance sheet and refine our portfolio. With respect to our bucket of disposition outparcels, freestanding retail, non enclosed malls and land, we have also made considerable progress toward our 2025 goal of $100,000,000 to $150,000,000 in total sales for the year. During the first quarter, we closed on $7,000,000 at our share of land sales. In April, at Santan Village, we closed on the sale of vacant lots for $25,000,000 at our share and three outparcel assets for $7,000,000 at our share.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

And I'm very pleased to report that we currently have approximately $17,000,000 of additional land sales and approximately $21,000,000 of additional outparcel sales under contract, which are expected to close in the second half of twenty twenty five, subject to customary closing conditions. This brings us to $77,000,000 sold or under contract against our 100,000,000 to $150,000,000 target for 2025. To recap on the Path Forward Plan's significant progress to date on the three key pillars to reduce leverage. One, Jack and Doug provided an update on the successful leasing progress to date that is critical component of delivering on the NOI growth component of the plan. Two, we achieved the equity issuance component of the plan in the fourth quarter of twenty twenty four.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

And three, we have made substantial progress on the sales and give back component of the plan and have identified a clear path to achieving our $2,000,000,000 disposition target. To date, we have completed almost $800,000,000 and as you will see in the incremental disclosure we've provided in our supplement, This includes Country Club Plaza, Biltmore, The Oaks, Southridge, Wilton Mall, and South Park, all of which are closed. Santa Monica Place, in which the loan encumbering this property is in default, and then Atlas Park, which is currently being marketed for sale. The sale of Lakewood, which is now under contract, would increase our sales completed total to just over $1,100,000,000 And then we have identified internally several additional assets totaling up to $400,000,000 for sale or give back over the next one to two years. The remaining dispositions in our plan represent the sale of outparcels, freestanding retail, non enclosed mall assets and land.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

We continue to expect to be substantially complete on this last bucket of the disposition program by the end of twenty twenty six. We'll provide further updates on these sales as we progress through the year. In conclusion, we are making great progress on our path forward plan objectives to reduce leverage, refine the portfolio and strengthen the balance sheet. With that, we'll turn the call back over to the operator.

Operator

Thank and return to the queue for follow-up to allow everyone an opportunity to ask a question. And our first question will come from Ki Bin Kim with Truist. Your line is open.

Ki Bin Kim
Ki Bin Kim
Managing Director at Truist Securities

Thank you. Good morning and congratulations on a great quarter. So first question, I know this answer might be a little bit different and you touched on the customer reactions and the trade tariffs, but with the news from this weekend, do you think there's any potential upside on leasing going forward?

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

Keith, it's Doug. I'll take that one. Let me talk about what we were seeing during the tariff. We did not see a lot of pullback. In fact, a couple of weeks ago, we had our board meeting.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

Prior to that, we contacted every one of our 40 national rent paying tenants. And really none of them was pulling back on open device. They were all honoring their leases out or their fully executed leases. Then we actually looked at every lease we had out for signature, contacted every retailer, and there was only a handful that were pulling back. So, you know, we haven't seen a lot.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

Therefore, I don't think there's really any change in the upside. I mean, the retailer sentiment You can see it in our leasing metrics, what we've signed, what we approved in the ELC, and then most importantly, what's currently in our pipeline.

Ki Bin Kim
Ki Bin Kim
Managing Director at Truist Securities

Okay. And on the SNO pipeline of $80,000,000 that's a cumulative number, but can you provide what is net incremental that we can expect when we model?

Brad Miller
Brad Miller
Senior Vice President, Asset Management at The Macerich Company

Ed, this is Brad. I'll take that one. So the $80,000,000 is incremental over the revenue being generated in the spaces from 2024. So that is our cumulative total that we expect to see in our model through 2028, and 25,000,000 of that will be realized in 2025, and $6,000,000 of it was realized in Q1.

Ki Bin Kim
Ki Bin Kim
Managing Director at Truist Securities

Okay. Thank you.

Operator

And the next question will come from Craig Mailman with Citi. Your line is open.

Craig Mailman
Craig Mailman
Analyst at Citigroup

Hey guys. You mentioned a couple of times that you're ahead of plan here on the leasing side of things and you're doing well on the sale and givebacks. Just kind of curious as you look at what you're spending on the leases to get them up and running on the CapEx side, is that trending ahead? And then also just given the execution here, when do you guys think you'd reinstate giving guidance?

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

Hey, Craig. This is Jackson. So on the spend, I think we talked about on spaces under 10,000 square feet, it's basically north of one times annual rent, 1.2 to 1.4 times in that range. Obviously, for anchor deals, anchor deals are more expensive. We have 26 anchor deals that we believe will come online in 2028.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

'17 of the 26 deals are already committed. There's either leases signed or leases out. We've got another six LOIs and three are prospecting. I would say generally as we think about capital, you know, the plan is probably slightly more capital than initially envisioned when we came up with a path forward last year. The dollars are being spent faster, you know, in the model.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

And as we discussed last time, correspondingly, you're going to see the major uplift in FFO and EBITDA in 'twenty seven and 'twenty eight, just as it relates to the time it takes to deliver.

Operator

Okay. Our next question will come from Linda Tsai with Jefferies. Your line is open.

Linda Tsai
Linda Tsai
Senior Analyst at Jefferies

Hi, thanks for taking my question. Great job with all the progress this quarter. Just wondering about the success of the new deals in the quarter, up 70% from a year ago. I assume that the new structure that you talked about to streamline permanent specialty and department store leasing under one leadership helps, but just any more color and details you could provide about the success of the pace of new leasing?

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

Yeah, thanks Linda, it's Jackson. Look, the PACE works because of the way we've laid out the plan and our organizational structure. Obviously the leasing is consolidated into one team, but the asset management team, which rides as an equal partner to leasing, there's a very direct line of communication between asset management, leasing, how it affects portfolio management in our model, and in our speedometer. You know, that speedometer, once again, just to reiterate, that represents expected revenue, you know, from these new leases. So it's very important to be at 60% at this point.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

So I would say that while the pace has been honestly incredible versus historical experience here, there's no reason why I can't stop or continue with this pace. It's, you know, we've got the right properties, tenants want to be in there, we kind of know the right prescription, we know how it affects the model, we make decisions very rapidly and the teams have a very clear directive. I also think like, you know, I'd said, you know, one of the reasons why I think we've really broken the back of this plan, The $50,000,000 of remaining snow that we talk about, 20,000,000 of that $50,000,000 is within our fortress properties, you know, our best properties in the portfolio. And of the $50,000,000 90 percent of that revenue is going to come from A, B, and C rated space. So we're talking about the best space and our best centers or our top centers that, are remaining to go.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

And so, yeah, we're going to continue to lease at very aggressive levels, but we've got a lot of great space to lease, Bill, in great centers.

Linda Tsai
Linda Tsai
Senior Analyst at Jefferies

Just one follow-up to that. In terms of the funnel of tenants that you're considering, have you opened up the funnel of tenants that you're leasing to as well?

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

Linda, can you repeat the question, please?

Linda Tsai
Linda Tsai
Senior Analyst at Jefferies

Oh, just wondering if you're considering a wider cohort of tenants that you would lease to.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

No,

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

I think we've talked about this on several calls. Coming out of COVID, the breadth and depth of, we don't even call them retailers anymore, it's really uses, has expanded tremendously. So when we talk about leasing, yeah, there are the key legacy retailers. They'll always be a part of our shopping centers. But you're also looking at digitally native and emerging brands, international brands, food and beverage, restaurant, medical, entertainment, electric vehicles, fitness, home furnishings, groceries.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

The uses that we have to choose from are really unprecedented today.

Linda Tsai
Linda Tsai
Senior Analyst at Jefferies

Thank you.

Operator

And the next question will come from Ronald Camden with Morgan Stanley. Your line is open.

Ronald Kamdem
Ronald Kamdem
Managing Director & Head of US REITs and CRE Research at Morgan Stanley

Hey, just I think the last call you had mentioned thoughts on same store NOI maybe being flattish for this year or next maybe until you sort of get the lease commencements and so forth. Just curious if we can get an update on that given things are running ahead of plan. Any sort of high level 27, 20 eight occupancy targets in your mind would also be helpful. Thanks.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

Hey, Ron, it's Jackson. So, you know, last quarter, you know, when I made reference to the flat NOI same store profile, you know, my initial comment was really related to the entire portfolio. As I've said, the best indicator of success is our leasing progress. And based on this faster leasing pace on our go forward portfolio, We actually expect same store NOI in our go forward portfolio in 2026 to be in the 3% to 4% range and significantly higher in 'twenty seven and 'twenty eight. As it relates to physical permanent occupancy, I talked last quarter about roughly being around 84 physical permanent occupancy in our go forward portfolio.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

At the time, the snow that we talked about last quarter represented about two fifty basis points of potential permanent occupancy. So, you know, if we kind of keep at this pace, you sort of should expect us to get, you know, very close to that 89% area of physical permanent occupancy plus 26 anchor locations being fulfilled, which those anchors we think would generate over $600,000,000 in sales. So we do our work. We think that we're going to really be able to accelerate the sales productivity and traffic in our centers. And that's going to really set ourselves up for some better releasing spreads as we get more permanently occupied on the next cycle of lease renewals after 2028.

Ronald Kamdem
Ronald Kamdem
Managing Director & Head of US REITs and CRE Research at Morgan Stanley

Super helpful. Thanks so much.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

Sure.

Operator

The next question comes from Sameer Kunal with Bank of America. Your line is open.

Samir Khanal
Samir Khanal
Director at Bank of America

Yes, good morning everybody. I guess, Jack, I mean, you're certainly making a lot of good progress here, especially on the leasing side. But just one metric that sort of is lagging or has sort of held constant is sales. I guess, how should we think about your ability to sort of push rents here, especially if sales don't grow? Again, good progress made so far, but just want to get your thoughts on sales here.

Samir Khanal
Samir Khanal
Director at Bank of America

Thanks.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

So, so I think you've got to sort of trust in the process that we're executing on. You know, when I look at like Scottsdale's Fashion Square, that, that center is doing over a billion dollars in sales. Tysons is going do over a billion after we get a couple more. We've got an anchor deal that's approved, but we're in the documentation phase. You know, we've got 26 anchors that are coming online between now and 2028 and an incredible amount of in line permanent occupancy increasing with what I call best in class brands that drive traffic and rent and sales.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

So, yeah, we're spending a lot of money in centers. We're not densifying. We're in good retail use. And I think that's what's gonna really that gives us the confidence to be able to drive sales productivity. So I wouldn't get so worried about this this intermediate period on sales.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

Maybe at some point, we'll break down sales in some of our better centers where we've done this type of work, like Tysons and Scottsdale, that give us the confidence to know if you do the right things in the center, so a retail standpoint, you get the right result in terms of traffic increase and sales productivity. And we're applying that sort of basic strategy across our go forward portfolio at this point.

Operator

And the next question comes from Floris Van Dijkum with Compass Point. Your line is open.

Floris van Dijkum
Managing Director at Compass Point Research & Trading

Hey, thanks guys. My question to you was more you've identified your Eddies or your and some of these potential additional sales candidates. Can you quantify to us what percentage of your NOI today is core versus non core? And maybe talk a little bit about I think you've indicated that you think your core NOI is going to grow by three percent to 4%. Is that this year or is that next year?

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

So that's next year on the 3% to 4%, on the core go forward portfolio. But we're going to come out with this, NOI bridge in the next two weeks. Like it's between ICSC and NAREIT. It's gonna outline it it's gonna I think it'll make this a little bit more clearer and also outline what properties are designated within the go forward. And I and I think that, you know, after we do that, it'll be more helpful for you if we can take you through it.

Floris van Dijkum
Managing Director at Compass Point Research & Trading

Perfect.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

Thanks. Thank you.

Operator

And our next question comes from Greg McGinnis with Scotiabank. Your line is open.

Greg Mcginniss
Director at Scotiobank

Hey, two questions on the new leasing. Just trying to better understand that kind of speedometer metric, but what percent of total leasing deals do you expect to be new deals in 2025 and '26? How does that compare to the historical average? And then does this new deals under consideration by the executive leasing committee, is that more retailers looking to locate in Maesrich assets? Is that more of a willingness on your end not to renew tenants, take on the short term vacancy for some longer term gain?

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

I'll take the second question first, and then Brad, maybe you can take the first question. But the deals we review in our executive leasing committee are really a combination of new deals and renewal deals. Many are new deals that are just strictly taking vacant space that we've identified. Jack mentioned A, B and C quality space. We have every single space in our portfolio identified and a rent attributed to it.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

So we know exactly what we're doing methodically. Are we taking off some space, taking some space offline? Yes. And we do that. That's just normal course of business.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

We do that to enhance the merchandising of the shopping centers, and Jack just alluded to that. So really, ELC is a combination of both renewal deals and new deals. But I really view it as a forward looking metric that unlike signed leases, which is the stuff we've done in the past, what we look at on a biweekly basis is all new and really more indicative of what's going on in the present and more importantly in the future. Greg, you

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

wanna take that? And Greg, on the first part of the question, in 2023, just as a point in time, we did 4,200,000 square feet of leasing. 1,400,000 of that square footage was new leases. Now that was for the entire portfolio. I would say as they go forward, you should expect our percentage of new to be higher.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

I can give you an exact target, but it's going to be higher than that percentage. We've talked about that where that's the big opportunity.

Greg Mcginniss
Director at Scotiobank

Okay. And if I could just follow-up on the sorry, the redevelopments. Just saw that the yields fell a bit this quarter. It looks like a mix of increased project costs and lower rent assumptions. Just hoping you could give us some more clarity on that.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

Yeah. Hey, Greg. It's really just the team's just completed their property quarterly reviews. And in going through that process, there were some marginal cost increases at both Flatiron and Greenacres, which are really driving the difference that you'll see in the supplement page on the development.

Greg Mcginniss
Director at Scotiobank

Okay. No risk for further growth beyond that?

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

Not as we sit here today based on the latest review of the projects that we just completed over the last couple of weeks.

Greg Mcginniss
Director at Scotiobank

Okay, thank you.

Operator

And the next question comes from Vince Tibone with Green Street. Your line is open.

Vince Tibone
Managing Director and Head of US Industrial & Mall Research at Green Street Advisors, LLC

Hi, thank you. Could you clarify the differences in the two renewal leasing spread statistics you cited earlier? I believe you said one was 7% and the other was like closer to 1% on a same space basis. But thought for renewals, things should generally be same space. Just if you could clarify what's driving the delta there, that'd be helpful.

Brad Miller
Brad Miller
Senior Vice President, Asset Management at The Macerich Company

Hey, it's Brad. I'll take that one. On the same space spreads, you know, we look at it, it includes temp spaces and who's in the space today, and so it's apples to apples of the exact same space.

Brad Miller
Brad Miller
Senior Vice President, Asset Management at The Macerich Company

When we look at the,

Brad Miller
Brad Miller
Senior Vice President, Asset Management at The Macerich Company

the new and renewal, the, 22 and the metric for new deals, that includes both against the same expiring rent.

Brad Miller
Brad Miller
Senior Vice President, Asset Management at The Macerich Company

So it's just splitting it between the two.

Vince Tibone
Managing Director and Head of US Industrial & Mall Research at Green Street Advisors, LLC

So I thought okay. So I've done this here then. I thought it was, like, one renewal was 7%. The other one was 1%. I guess so renewals, it sounds like the 1% figure is the the more appropriate, like, renewal spread on to to think about.

Brad Miller
Brad Miller
Senior Vice President, Asset Management at The Macerich Company

Yeah. I would say so. I mean, our renewal spreads are definitely less than our new deal spreads,

Brad Miller
Brad Miller
Senior Vice President, Asset Management at The Macerich Company

and that's why we're

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

But also, like, for the first quarter, we had an anchor renewal. So does date it's also waiting in that package? Yes.

Vince Tibone
Managing Director and Head of US Industrial & Mall Research at Green Street Advisors, LLC

Got it. So there so that the prior tenant, so it includes anchors and includes temps. I just want to make sure I understand what's in that metric. I believe that's the first time this has been provided. Correct me if I'm wrong.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

Think we provided the color last quarter as well on the same space. Okay.

Vince Tibone
Managing Director and Head of US Industrial & Mall Research at Green Street Advisors, LLC

Well, thank you. No, that's helpful.

Operator

And the next question will come from Omotayo Okusanya with Deutsche Bank. Your line is open.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

Yes, good afternoon. For the same store NOI growth this quarter, could you give us a little bit more detail about the kind of same store revenues and same store expenses? What happened in those two items to kind of get to the same store NOI?

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

Are you referencing for the first quarter of twenty twenty five?

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

Yes, for the first quarter of twenty twenty five. And then just trying to understand how you ultimately expect that to change to kind of get to this 3%, four % growth we're talking about in 2027?

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

Yes. In the first quarter, we did see some operating expense increases. But as I mentioned earlier, the revenue generation was more than offsetting those shopping center increases for the first quarter. And you went out on the second part of your question.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

He just talking about the go forward. So it's a different portfolio. That's the problem. Yeah. Yeah.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

So

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

Yeah. The first quarter twenty twenty five is for the current portfolio and the commentary Jack referenced earlier, the 3% to 4% in 2026, that's for the go forward portfolio, which to the earlier comment, we'll be providing more color on the position of that portfolio with our NOI bridge over the next couple of weeks.

Omotayo Okusanya
Omotayo Okusanya
Managing Director at Deutsche Bank

Sounds good. Thank you.

Operator

The next question comes from Alexander Goldfarb with Piper Sandler. Your line is open.

Alexander Goldfarb
Alexander Goldfarb
Managing Director & Senior Analyst at Piper Sandler Companies

Hey, good morning. Good morning out there. We're one or two questions. I just want to make sure, are we can we ask one or two?

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

Just ask one if you could and then

Alexander Goldfarb
Alexander Goldfarb
Managing Director & Senior Analyst at Piper Sandler Companies

Okay, great. Well then, on the numbers side, there were some items in

Alexander Goldfarb
Alexander Goldfarb
Managing Director & Senior Analyst at Piper Sandler Companies

the first

Alexander Goldfarb
Alexander Goldfarb
Managing Director & Senior Analyst at Piper Sandler Companies

quarter. Maybe you mentioned the legal expense in the opening, I didn't hear it, but there was a lease term fee and then there was legal expense. Then also it sounds like there's $21,000,000 of land sales potentially in the balance this year in FFO. So just trying to get a better understanding on the legal and lease term in the first quarter, expectations for more lease terms this year and then land sales that we should expect in FFO for the balance of the year.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

Yes, sure. So I'll start with the legal claims, as I mentioned, $6,000,000 of net settlement income at one of our properties during the first quarter related to a construction design defect matter. That's one time in nature. We expect those proceeds received recovered will more than be adequate to cover the cost of the proposed solution. So we highlighted that as more of a non recurring one time item.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

As it relates to lease termination fees, we had about $5,000,000 of lease termination fees come through in the first quarter. And that was primarily driven by one large tenant at Fashion Outlets of Chicago, which was a $3,000,000 amount. And we're pleased that we already have another tenant that has taken that space. So that's good news at that particular asset. And then as it relates to land sales, we just kind of gave an update that for the first quarter we closed on $7,000,000 of land sales.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

And then in April, we closed on the sale of another $25,000,000 of land sales. So in totality, that's part of our 100,000,000 to $150,000,000 bucket, which in combination with the outparcels, we're now $77,000,000 sold against that 100,000,000 to $150,000,000 target.

Alexander Goldfarb
Alexander Goldfarb
Managing Director & Senior Analyst at Piper Sandler Companies

And then expectations for lease terms for the balance of the year?

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

We expect maybe a couple more million dollars of lease termination income in the balance of the year based on the visibility we have today.

Alexander Goldfarb
Alexander Goldfarb
Managing Director & Senior Analyst at Piper Sandler Companies

Okay. Thank you.

Operator

The next question comes from Haendel St. Juste with Mizuho. Your line is open.

Haendel St. Juste
Haendel St. Juste
Managing Director at Mizuho Financial Group

Hey, guys. Good morning out there. Appreciate the comments on the tariffs not impacting leasing, but I guess I'm curious on how tariffs might be impacting the conversations around some of the asset sale that you're doing here. I understand Lakewood is the last sizable asset you have left to sell, but what can you tell us about the pricing, the demand for Lakewood? Any color on that and potentially a sense of when you expect that to close?

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

Yeah. Well, Lakewood, as we referenced, the proceeds over the debt amount not very significant. So, you know, the borrower is going through a process right now, with the existing lender, the buyer. I would say, you know, as it relates to debt financings, mean, I think Washington Square is a great example of refinancing stabilized malls, but, you know, Dan can give you more color. On the outparcels, you know, of the cap rates on the restaurants were like in the 5%, mid 5% range.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

You know, we're seeing really you know, these are high net worth buyers, ten thirty one buyers. You know, Hengdali did a lot of this at our own company, Expert. And so if you ask me on our outparcel objective, you know, I think we laid out 500,000,000 of outparcels at roughly 8%. I think we're going to do better than that. I think it's going probably be closer to 7%.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

And I think we're going to end up maybe even doing more if we want because we have identified more vacant land opportunity that, you know, quite candidly, on a price per acre is a lot more valuable than what we did at San Tan. And so, yeah, we, I think, feel really good about that piece of the execution that's left.

Haendel St. Juste
Haendel St. Juste
Managing Director at Mizuho Financial Group

Okay. Any ballpark on NOI yield or any stat on the pricing for the liquid from a value perspective given it's the space where we don't get a lot

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

of trade. I would just look at the debt yield that we put in our supplemental, in our disclosure. It's a pretty good approximation for a cap rate there.

Haendel St. Juste
Haendel St. Juste
Managing Director at Mizuho Financial Group

Got it. Okay, fine. And then maybe one more if I could. Just appreciate the color and all the numbers you guys provided, lots of numbers. But I guess if I'm curious, I'm curious if we should be reading through your comments that, you know, the mid twenty six inflection, if that's when we should be thinking about cash flow or earnings to be troughing and then to inflect positively positively from that point?

Haendel St. Juste
Haendel St. Juste
Managing Director at Mizuho Financial Group

Thank you.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

Yes, Haendel, think that's a fair characterization of it. Just as Jack mentioned, as we have a lot of leasing activity coming online over the next couple of years, development NOI really starts to ramp second half of twenty twenty six into 2027 and 2028. And then on the flip side, we're working through these outparcel sales and asset sales and give back. So it's possible that the lost NOI from those could be more than what's coming online from the sources coming in over that next twelve to eighteen month period. So that's a long way of saying it.

Dan Swanstrom
Dan Swanstrom
Senior Executive Vice President, Chief Financial Officer and Treasurer at The Macerich Company

I think your statement is fair.

Haendel St. Juste
Haendel St. Juste
Managing Director at Mizuho Financial Group

Okay. Appreciate it, guys. Thank you.

Operator

The next question comes from Caitlin Burrows with Goldman Sachs. Your line is open.

Caitlin Burrows
Caitlin Burrows
Vice President at Goldman Sachs

Hi, good morning there. I guess just thinking about the long term plan and the targets in terms of reaching the physical permanent occupancy targets by 2028, which I think was up about 500 basis points from year end 2024. I'm wondering if you could go through what kind of leakage or tenant fallout, nonrenewals, that sort of thing you're assuming on the other side. I guess one concern is that a new Forever twenty one or someone like that comes along and creates a new hole to fill. So just wondering, kind of how that's factored into your occupancy targets and outlooks.

Brad Miller
Brad Miller
Senior Vice President, Asset Management at The Macerich Company

We take that all into consideration in our 500 basis points of increase. Any fallout from planned closures and tenants that we're replacing is all weighed into that five hundred

Operator

thanks. And our next question will come from Michael Mueller with JPMorgan. Your line is open.

Michael Mueller
Michael Mueller
Analyst at JP Morgan

Yes. Hi. Just for the Forever twenty one releasings, what portion of that activity is going to single users as opposed to breaking up the spaces for smaller tenants?

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

I can take that one. Michael, it's Doug. It's really a mixed bag. I would say that the majority of the space is being leased as it is. Some of the larger anchor store spaces that Forever twenty one took may get broken up.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

But as I mentioned, we're about 6% or about 50% committed. And we're going to basically double the rent that Forever twenty one was paying. And while we're not at liberty to disclose or talk about the replacement deals yet, you should be thinking about some of the real, real hot tenants that are out there right now. Mean, is really an opportunity for us to be able to get these underperforming stores back. And then think about Dick's House of Sport or Zara or Primark or UniGlo or Urban Planet replacing them.

Doug Healey
Doug Healey
Senior Executive Vice President, Leasing at The Macerich Company

There's just so much upside not only in the rent, but in terms of merchandising as well.

Michael Mueller
Michael Mueller
Analyst at JP Morgan

Thanks.

Operator

I am showing this is all the time that we have now for questions. I would now like to turn the call back to Jack Shea for closing remarks.

Jackson Hsieh
Jackson Hsieh
President, CEO & Director at The Macerich Company

Thank you, and we're pleased to report our continued progress on the many strategic initiatives within our path forward plan, and we thank you all for your time today.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

Executives
    • Samantha Greening
      Samantha Greening
      AVP - Investor Relations
    • Jackson Hsieh
      Jackson Hsieh
      President, CEO & Director
    • Doug Healey
      Doug Healey
      Senior Executive Vice President, Leasing
    • Dan Swanstrom
      Dan Swanstrom
      Senior Executive Vice President, Chief Financial Officer and Treasurer
    • Brad Miller
      Brad Miller
      Senior Vice President, Asset Management
Analysts

Key Takeaways

  • Macerich is ahead of schedule on its path forward plan, signing 2.6 million sq ft of leases in Q1, achieving 60% of its new deal completion target (vs 39% last quarter) and growing its SNOW pipeline to $80 million.
  • The company has de-risked its balance sheet by consolidating joint ventures, completing $1.1 billion of dispositions, raising $500 million in equity and executing $1 billion of refinancings ahead of plan.
  • Leasing performance remains robust with Q1 spreads of 10.9% overall (22% on new deals, 7% on renewals), marking 14 consecutive quarters of positive spreads and 2% year-over-year traffic growth.
  • Q1 FFO was $87 million ($0.33/share), up from $75 million a year ago, driven by higher leasing revenues, while same-center NOI rose 0.9% (2.4% ex-Eddie assets).
  • Management expects a major inflection point in mid-2026, targeting 3–4% same-store NOI growth for the go-forward portfolio in 2026 and reducing net debt/EBITDA to the low-mid 6× range by 2028.
AI Generated. May Contain Errors.
Earnings Conference Call
Macerich Q1 2025
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