Financial Strategy and Debt Management - The Company announced the Path Forward Plan in Q2 2024, aiming to reduce its Net Debt to Adjusted EBITDA leverage ratio over the next three to four years[47]. - The company aims to deleverage its capital structure over the next three to four years as part of its Path Forward Plan, though success is not guaranteed[134]. - As of December 31, 2024, the company's total outstanding loan indebtedness was $6.65 billion, which includes $4.99 billion of consolidated debt and $1.69 billion of pro rata share of mortgages on unconsolidated joint ventures[133]. - The company's total debt, including both consolidated and unconsolidated, was $5.1 billion as of December 31, 2024[346]. - The company's pro rata share of the Unconsolidated Joint Venture Centers' fixed rate debt was $1.6 billion as of December 31, 2024, with an average interest rate of 5.28%[348]. - The company's total fixed rate debt was $4.7 billion with an average interest rate of 4.40%, compared to $3.8 billion and 4.29% in 2023[347]. - The company's total floating rate debt as of December 31, 2024, was $0.4 billion with an average interest rate of 6.21%, down from $0.5 billion and 7.43% in 2023[347]. - A 1% increase in interest rates is estimated to decrease future earnings and cash flows by approximately $5.4 million per year based on $542.9 million of floating rate debt outstanding[351]. - The company has interest rate cap agreements in place to manage floating rate debt, which limits how high the prevailing floating loan rate can rise[350]. - The company's average interest rate on fixed rate debt decreased from 4.29% in 2023 to 4.40% in 2024, indicating a slight increase in borrowing costs[347]. Property and Portfolio Management - As of December 31, 2024, the Centers included 40 Regional Retail Centers totaling approximately 43 million square feet of GLA, with an average size of about 990,000 square feet[57]. - The Company acquired interests in several shopping centers, including Arrowhead Towne Center and South Plains Mall, as part of its strategy to enhance its portfolio[50]. - The Company focuses on acquiring well-located, quality Regional Retail Centers with strong revenue enhancement potential, and seeks to improve operating performance through leasing and redevelopment[49]. - The Company has developed a fully integrated real estate organization to optimize operations, tenant mix, and respond to competitive conditions in the market[51]. - The Company emphasizes a decentralized property management strategy, with on-site property managers responsible for operations and tenant relationships[52]. - The Company actively seeks replacement tenants for vacant sites and is considering redevelopment opportunities for these locations[1]. - The shopping center industry is seasonal, with earnings generally higher in the fourth quarter due to increased retail sales during the holiday season[88]. Tenant and Rental Information - For the year ended December 31, 2024, 73% of total rents were derived from Mall Stores and Freestanding Stores under 10,000 square feet, while 27% came from Big Box and Anchor tenants[60]. - Tenant occupancy costs for Mall Store and Freestanding Store tenants in consolidated centers were 11.8% of total sales for the year ended December 31, 2024, compared to 12.1% in 2023[64]. - Major tenants contributed significantly to total rents, with the top 10 tenants accounting for a combined 12.1% of total rents as of December 31, 2024[60]. - The average base rent per square foot for consolidated centers increased to $65.62 in 2024 from $61.66 in 2023, representing an increase of 4.9%[65]. - The average base rent per square foot for unconsolidated joint venture centers rose to $76.11 in 2024 from $70.42 in 2023, reflecting an increase of 9.6%[66]. - The average base rent per square foot on leases executed during 2024 for big boxes and anchors was $14.85, down from $16.65 in 2023, indicating a decrease of 9.6%[66]. - The average base rent per square foot on leases expiring during 2024 for big boxes and anchors was $21.14, a decrease from $29.67 in 2023, representing a decline of 28.8%[66]. - The company has a total of 145 anchor stores, with a combined GLA of 19,946,000 square feet, including 9,093,000 square feet owned and 10,853,000 square feet leased[75]. - Scheduled lease expirations for consolidated centers in 2025 include 522 leases, representing 24.99% of total leased GLA, with an ending base rent of $66.31 per square foot[69]. - For big boxes and anchors, 27 leases are set to expire in 2025, accounting for 15.42% of total leased GLA, with an ending base rent of $11.35 per square foot[70]. - Anchors contributed approximately 7.2% to the company's total rents for the year ended December 31, 2024[73]. - The company’s average base rent per square foot on leases executed during the year for mall stores and freestanding stores was $61.16 in 2024, up from $58.97 in 2023, an increase of 2.0%[65]. Employee and Diversity Initiatives - As of December 31, 2024, the Company had approximately 616 employees, with a turnover rate of 13.7%[81]. - The average tenure of the Company's employees was approximately 10.6 years, indicating a stable workforce[82]. - Approximately 58% of the Company's employees identified as female, and about 30% belong to an underrepresented group, reflecting its commitment to diversity[86]. - The Company has implemented operational protocols to ensure the health and safety of employees and customers at its Centers[87]. Regulatory and Compliance Risks - The company incurs costs to comply with various governmental regulations, impacting capital expenditures and competitive position[76]. - Compliance with the Americans with Disabilities Act and other regulations may require substantial expenditures, impacting cash flows and operational flexibility[119]. - The company faces significant risks from cyber threats, including increased costs for protection and recovery from incidents, despite carrying cyber liability insurance[120]. - The company must maintain an ownership limit of no more than 50% in value of its outstanding stock to qualify as a REIT[148]. - The company believes it currently qualifies as a REIT, but there are risks that could jeopardize this status, affecting distributions to stockholders[155]. - If the company fails to qualify as a REIT, it could face significant tax liabilities and reduced funds for distributions[157]. - Legislative changes to U.S. federal income tax laws could adversely affect the taxation of the company and its stockholders[165]. - The company may be subject to a 100% tax on income from prohibited transactions, impacting asset sales[161]. - The company must distribute 90% of its annual taxable income to stockholders, which may require borrowing or selling assets if cash flow is insufficient[162]. Environmental and Natural Disaster Risks - The Company carries specific earthquake insurance with a combined annual aggregate loss limit of $100 million for its Centers located in California and the Pacific Northwest[79]. - Environmental liabilities may arise from hazardous materials at properties, leading to significant costs for investigation and remediation[111]. - The company faces risks from climate change, which could impact property demand and increase operational costs related to compliance and repairs[114]. - Properties are subject to potential natural disasters, which could delay projects and increase insurance costs, negatively affecting financial performance[115]. Market and Economic Risks - Elevated interest rates may negatively impact consumer spending and tenant businesses, with increased borrowing costs affecting cash flow and debt service[128][129]. - International trade disputes and tariffs could increase costs for tenants, potentially impacting their ability to meet obligations and affecting the company's revenue[132]. - Future pandemics or outbreaks of infectious diseases could disrupt operations, leading to decreased consumer spending and potential tenant bankruptcies[124][125]. - Acts of violence, vandalism, and civil unrest could adversely affect property values and revenue generation from tenants[122][123]. - Inflationary pressures may increase operating costs, impacting cash flows and profits despite tenants covering some expenses[127]. - The company faces risks related to occupancy levels, customer traffic, and rental income, which may be adversely affected by store closures from significant tenants[104]. - Historical revenue growth has been tied to the acquisition and redevelopment of shopping centers, with future success dependent on factors like capital availability and competition from other REITs[105]. - The company may not achieve anticipated financial results from newly acquired assets due to risks associated with real estate development, including financing and construction delays[106]. - Excess space at properties may lead to downward pressure on rental rates and occupancy levels, with ongoing bankruptcies among tenants impacting overall performance[108]. - The company sold certain properties as part of the Path Forward Plan in 2024, but real estate investments remain relatively illiquid, limiting portfolio adjustments[109]. - Impairment charges on real estate assets could adversely affect operating results, with past charges indicating potential future risks[110].

Financial Data and Key Metrics Changes - FFO excluding certain expenses was approximately $117 million or $0.47 per share in Q4 2024, down from approximately $128 million or $0.57 per share in Q4 2023, primarily due to higher interest and severance expenses [34][35] - Same-center NOI excluding lease termination income decreased by 0.4% in Q4 2024 compared to Q4 2023, but increased by 0.2% for the full year [36][37] - Debt to EBITDA at year-end 2024 was slightly below 8x, nearly a full turn lower than the previous year [40] Business Line Data and Key Metrics Changes - The company achieved 8.8% base rent releasing spreads for permanent tenants under 10,000 square feet in 2024, with new leases signed during this period being 17.6% higher than prior period permanent rent [13][14] - The current physical permanent occupancy rate is 84%, with a target of 89% by 2028 [14][15] - The leasing team is focused on increasing the percentage of new lease deals versus renewals, targeting an average of 4 million square feet of leasing in 2025 and 2026 [12][15] Market Data and Key Metrics Changes - Sales per square foot at the end of Q4 were $837, up $3 from the last quarter, while sales excluding Eddy properties were $915 [20] - Portfolio traffic was up almost 2% compared to 2023, returning to pre-COVID levels, with occupancy in Q4 at 94.1% [22][23] - The company opened 530,000 square feet of new stores in Q4, totaling 1.5 million square feet for the year [23] Company Strategy and Development Direction - The Path-Forward Plan aims to simplify the business, improve operational performance, and reduce leverage over a five-year horizon [7][8] - The company is focusing on leasing vacant and underperforming spaces to drive incremental revenue and improve NOI [11][15] - Significant progress has been made in consolidating joint ventures and simplifying the business structure [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the leasing environment, noting a healthy demand from retailers and a focus on permanent leasing [80][82] - The anticipated landlord work and tenant improvement costs were higher than expected, which could impact the execution of the Path-Forward Plan [120][121] - Management is optimistic about achieving incremental NOI goals by 2028, driven by a strategic focus on leasing and tenant remerchandising [15][17] Other Important Information - The company has identified a clear path to achieving its $2 billion disposition target, having completed nearly $800 million to date [46][47] - The company is currently under contract to sell Wilton Mall for $25 million, expected to close in the first half of 2025 [45] - The company has approximately $683 million of liquidity, including $540 million of capacity on its line of credit [40] Q&A Session Summary Question: Same-store NOI growth expectations for 2025 - Management indicated that same-store NOI growth in 2025 is expected to be flat initially, with improvements anticipated in 2027 and 2028 as leasing goals are achieved [52][54] Question: Impact of new leases on sales numbers - Management expects to see an increase in sales numbers as new leases typically involve higher rental revenue compared to existing leases [56][62] Question: Efficiency improvements from new processes - Management noted that the new leasing dashboard has significantly improved efficiency and visibility, allowing for better resource allocation and leasing outcomes [70][75] Question: Update on development pipeline and CapEx - Management acknowledged that higher anticipated landlord work and tenant improvement costs could lead to increased CapEx in 2025 and 2026 [126][127] Question: Quality and cap rates of planned dispositions - Management indicated that the planned dispositions are expected to have sub-8% cap rates, with a focus on outparcels and non-enclosed mall assets [134][135]

Core Insights - Macerich reported revenue of $273.68 million for the quarter ended December 2024, reflecting a 14.7% increase year-over-year and a surprise of +16.24% over the Zacks Consensus Estimate of $235.44 million [1] - The company's EPS for the quarter was $0.47, matching the consensus estimate but up from $0.29 in the same quarter last year [1] Financial Performance - Minimum rents generated $159.11 million, exceeding the average estimate of $138.07 million by three analysts, representing a year-over-year increase of +17% [4] - Management Companies revenues were reported at $7.72 million, slightly below the average estimate of $7.74 million, showing a year-over-year decline of -2.9% [4] - Tenant recoveries amounted to $65.89 million, surpassing the average estimate of $57.83 million, with a year-over-year increase of +22.4% [4] - Percentage rents reached $22.57 million, exceeding the average estimate of $14.80 million, indicating a +13% change year-over-year [4] Market Performance - Over the past month, Macerich's shares returned -1.4%, compared to a -2.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - Macerich reported quarterly funds from operations (FFO) of $0.47 per share, matching the Zacks Consensus Estimate, but down from $0.56 per share a year ago [1] - The company posted revenues of $273.68 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 16.24%, compared to $238.69 million in the same quarter last year [2] - The stock has added about 1% since the beginning of the year, underperforming the S&P 500's gain of 1.3% [3] Financial Performance - The FFO for the previous quarter was expected to be $0.40 per share, but the actual result was $0.38, resulting in a surprise of -5% [1] - Over the last four quarters, Macerich has surpassed consensus FFO estimates only once [1] - The current consensus FFO estimate for the upcoming quarter is $0.33 on revenues of $207.82 million, and for the current fiscal year, it is $1.55 on revenues of $892.82 million [7] Market Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call [3] - The estimate revisions trend for Macerich is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] - The REIT and Equity Trust - Retail industry is currently in the top 28% of Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Core Viewpoint - The Macerich Company has released its Fourth Quarter 2024 Earnings Results and will discuss these results in a conference call on February 27, 2025 [1][2]. Company Overview - Macerich is a fully integrated, self-managed, self-administered real estate investment trust (REIT) focused on high-quality retail real estate in densely populated U.S. markets [4]. - The company's portfolio includes 43 million square feet of real estate, primarily consisting of interests in 40 retail centers [4]. - Macerich has achieved a 1 Global Real Estate Sustainability Benchmark (GRESB) ranking for the North American retail sector for ten consecutive years from 2015 to 2024 [4]. Investor Relations - The company utilizes its Investor Relations website for disclosing material nonpublic information and complying with disclosure obligations under Regulation FD [5]. - Additional information can be accessed through social media platforms such as LinkedIn [5].

Financial Performance - The net loss attributable to the Company for Q4 2024 was $211.2 million, or $0.89 per diluted share, compared to a net income of $62.2 million, or $0.29 per diluted share, for Q4 2023[11]. - Funds from Operations (FFO) for Q4 2024 were $116.7 million, or $0.47 per diluted share, down from $127.7 million, or $0.57 per diluted share, in Q4 2023[11]. - For the three months ended December 31, 2024, total revenues increased to $273,676,000 from $238,688,000 in the same period of 2023, representing a growth of 14.6%[29]. - The company reported a net loss attributable to the Company of $(211,210,000) for the three months ended December 31, 2024, compared to a net income of $62,179,000 in the same period of 2023[29]. - Funds From Operations (FFO) for the three months ended December 31, 2024, was $126,214,000, down from $158,391,000 in the same period of 2023, a decrease of 20.3%[29]. - Interest expense increased significantly to $70,933,000 for the three months ended December 31, 2024, compared to $25,413,000 in the same period of 2023, marking an increase of 179.5%[29]. - The company experienced a loss on the sale or write down of assets of $(233,347,000) for the three months ended December 31, 2024, compared to a gain of $706,000 in the same period of 2023[29]. - The Adjusted EBITDA for the twelve months ended December 31, 2024, was $707,207 thousand, a decrease from $722,041 thousand in 2023[43]. - The total market capitalization increased to $11,903,254 thousand as of December 31, 2024, up from $10,409,768 thousand in 2023[46]. - The equity market capitalization rose to $5,255,678 thousand in 2024, compared to $3,490,189 thousand in 2023, reflecting a growth of 50.7%[46]. Occupancy and Leasing - Portfolio occupancy as of December 31, 2024, was 94.1%, a 0.6% increase from 93.5% at the end of 2023[17]. - The Company signed leases for 3.7 million square feet in 2024, a 3.9% decrease compared to 2023, with Q4 2024 seeing a 15.3% increase in leased square footage compared to Q4 2023[17]. - Same center net operating income (NOI) decreased by 0.4% in Q4 2024 compared to Q4 2023, but increased by 0.2% for the full year[11]. - Leasing revenue for the twelve months ended December 31, 2024, was $850,453,000, up from $809,023,000 in 2023, reflecting a year-over-year increase of 5.1%[29]. - The average base rent per square foot for consolidated centers increased to $65.62 in 2024 from $61.66 in 2023, reflecting an increase of 4.8%[79]. - The average sales per square foot for consolidated centers rose to $743 in 2024, up from $712 in 2023, marking a 4.4% increase[74]. Capital and Debt Management - The Company had approximately $683 million in liquidity, including $540 million available on its revolving line of credit[14]. - The Company completed an underwritten public offering of 23 million shares at $19.75 per share, generating approximately $454 million in gross proceeds[7]. - Total portfolio debt, including joint ventures at pro rata, decreased to $6,647,576 thousand in 2024 from $6,919,579 thousand in 2023[46]. - The debt as a percentage of total market capitalization improved to 55.9% in 2024, down from 66.5% in 2023[46]. - The weighted average interest rate on the company's debt is 5.53%[108]. - The effective interest rate for total debt is 5.48%, with fixed rate debt averaging 5.38% and floating rate debt averaging 6.66%[111]. - The company has a total of $1,687,797,000 in unconsolidated assets, with fixed rate debt at $1,555,190,000 and floating rate debt at $132,607,000[111]. Dividends and Shareholder Returns - A quarterly cash dividend of $0.17 per share was announced, payable on March 18, 2025[15]. - The company paid a dividend of $0.17 per share for both the three months ended December 31, 2024, and 2023, maintaining the same dividend level[29]. - The company's stock price reached a high of $22.27 and a low of $17.29 in the fourth quarter of 2024, with dividends declared and paid consistently at $0.17 per share[119]. Asset Management and Acquisitions - The acquisition of a 40% interest in the Pacific Premier Retail Trust portfolio was completed for a net price of $122 million, with an implied cap rate of 7.4%[17]. - The Company sold The Oaks for $157 million and Southridge for $4 million, using proceeds to repay loans totaling $148 million[8]. - The company acquired a 100% interest in several regional retail centers, including Lakewood Center and Los Cerritos Center, for a total cash payment of $129.0 million[71]. - The company has a total of 2,322,000 square feet in other assets under redevelopment[98]. - The Paradise Valley Mall redevelopment project is ongoing, with a 5% joint venture interest retained by the company[99]. Future Projects and Developments - The company is developing and redeveloping projects with total costs estimated between $444 million and $490 million, with expected yields ranging from 7.5% to 18%[116]. - The expected opening for the FlatIron Crossing project is between 2027 and 2029, with a pro rata total cost of $120 million to $130 million[116]. - The Green Acres Mall redevelopment is expected to stabilize in 2026, with a total cost of $120 million to $140 million and a yield of 13% to 14%[116]. - The Scottsdale Fashion Square redevelopment is projected to yield between 16% and 18%, with an expected opening in 2024 to 2025[116].

Company Overview - Macerich is a fully integrated, self-managed, self-administered real estate investment trust (REIT) focused on high-quality retail real estate in densely populated U.S. markets [3] - The company's portfolio includes 43 million square feet of real estate, primarily consisting of interests in 40 retail centers [3] - Macerich has achieved a 1 Global Real Estate Sustainability Benchmark (GRESB) ranking for the North American retail sector for ten consecutive years from 2015 to 2024 [3] Upcoming Events - Jack Hsieh, President and CEO, and Dan Swanstrom, Senior Executive Vice President and CFO, will participate in a round table presentation at Citi's 2025 Global Property CEO Conference on March 4, 2025, at 1:30 pm Eastern Time [1] - A live audio webcast of the presentation will be available on the company's Investor Relations website, with a replay accessible afterward [2]

Core Points - Macerich is scheduled to release its Fourth Quarter 2024 earnings results before the market opens on February 27, 2025, followed by a conference call at 10:00 am Pacific Time [1] - The conference call will require participants to register for a dial-in number and personalized PIN code, with options to join via telephone or live webcast [2][3] - Macerich is a self-managed and self-administered real estate investment trust (REIT) focused on high-quality retail real estate in key U.S. markets, owning 43 million square feet of real estate primarily in 40 retail centers [4] - The company has achieved a 1 Global Real Estate Sustainability Benchmark (GRESB) ranking for the North American retail sector for ten consecutive years from 2015 to 2024, highlighting its commitment to sustainability [4] Company Overview - Macerich operates in densely populated and attractive U.S. markets, including California, the Pacific Northwest, Phoenix/Scottsdale, and the Metro New York to Washington, D.C. corridor [4] - The company emphasizes advancing environmental goals, social good, and sound corporate governance as part of its operational strategy [4] - Macerich utilizes its Investor Relations website for disclosing material nonpublic information and complies with Regulation FD [5]

Core Points - Macerich has appointed Devin Murphy to its Board of Directors, effective February 1, 2025, bringing nearly three decades of investment banking experience [1][3] - With Murphy's addition, Macerich's Board will consist of nine directors, eight of whom are independent [2] - Murphy previously served as President of Phillips Edison & Company and has extensive experience in the retail REIT sector [3] - He held senior leadership roles at Morgan Stanley and Deutsche Bank, where he was the Global Head of Real Estate Investment Banking, executing over 500 transactions totaling over $400 billion [4] - Macerich's Path Forward plan aims to enhance performance and add long-term value for stakeholders, focusing on simplifying business operations, improving performance, and reducing leverage [5] - Murphy expressed his commitment to supporting Macerich's strategy, which emphasizes a stronger balance sheet and concentration on prime properties [6] - Macerich is a leading self-managed REIT with a portfolio of 43 million square feet, primarily in high-demand U.S. markets [8]

Group 1 - The Macerich Company announced the tax treatment for dividend distributions taxable in 2024, with a total dividend of $0.68 per share for the year ended December 31, 2024 [1] - The dividend payments are classified into various categories, including ordinary dividends, qualified dividends, capital gain distributions, and nondividend distributions [1] - The company paid dividends on four separate dates in 2024, each at a rate of $0.17 per share, with specific amounts allocated to each tax category [1] Group 2 - Macerich is a fully integrated, self-managed, self-administered real estate investment trust (REIT) focused on high-quality retail real estate in densely populated U.S. markets [2] - The company's portfolio includes 43 million square feet of real estate, primarily consisting of interests in 40 retail centers, concentrated in regions such as California and the Metro New York to Washington, D.C. corridor [2] - Macerich has achieved a 1 Global Real Estate Sustainability Benchmark (GRESB) ranking for the North American retail sector for ten consecutive years from 2015 to 2024, highlighting its commitment to sustainability [2]