Macerich(US:MAC)2025-08-11 20:42Company Overview - As of June 30, 2025, the Macerich Company owned or had an ownership interest in 39 regional retail centers and two community/power shopping centers, totaling approximately 42 million square feet of gross leasable area (GLA) [147]. - The Company anticipates continued growth and has outlined expectations for its Path Forward Plan, focusing on acquisition and redevelopment opportunities [148]. Acquisitions and Sales - The Company acquired a 100% interest in Arrowhead Towne Center and South Plains Mall for $36.4 million on May 14, 2024, and a former Sears parcel at Inland Center for $5.4 million on May 17, 2024 [152][153]. - On June 23, 2025, the Company acquired Crabtree Mall for a total purchase price of $290.0 million, funded with cash on hand and $100.0 million of borrowings [155]. - The Company sold Country Club Plaza for $175.6 million on June 28, 2024, resulting in the forgiveness of $147.7 million of debt [157]. - The Company recognized a gain of $42.8 million from the sale of its 50% interest in Biltmore Fashion Park for $110.0 million on July 31, 2024 [159]. Financial Performance - For the three months ended June 30, 2025, the net loss attributable to the Company was $40.9 million, compared to a net income of $252.0 million for the same period in 2024 [279]. - Net (loss) income decreased by $226.8 million from 2024 to 2025, primarily due to a prior year gain of $334.3 million related to Chandler Fashion Center [247]. - Funds From Operations (FFO) attributable to common stockholders and unit holders—diluted, increased by 7.4% from $162.7 million in 2024 to $174.7 million in 2025 [248]. - Funds from Operations (FFO) attributable to common stockholders and unit holders for the three months ended June 30, 2025, was $83.98 million, a decrease from $99.70 million in the same period of 2024 [279]. Leasing and Occupancy - Leasing revenue increased by $34.8 million, or 17.6%, from 2024 to 2025, driven by increases from JV Transition Centers ($41.2 million) and Same Centers ($4.0 million) [227]. - The leased occupancy rate was 92.0% as of June 30, 2025, a 1.3% decrease from 93.3% at June 30, 2024, primarily due to closures of Forever 21 [219]. - The Company signed 650 leases for approximately 4.3 million square feet during the first half of 2025, representing a 76% increase in square footage leased compared to the same period in 2024 [217]. - Releasing spreads increased by $6.73 per square foot, or 10.5%, for the trailing twelve months ended June 30, 2025, marking the fifteenth consecutive quarter of positive base rent leasing spreads [208]. - The Company has executed renewal leases or commitments on 89% of its square footage expiring in 2025, with another 9% in the letter of intent stage [209]. Debt and Financing - The Company defaulted on a $300.0 million loan on Santa Monica Place on April 9, 2024, transitioning the property to a receiver [173]. - The Company closed a $525.0 million refinance of the loan on Queens Center on October 28, 2024, replacing a $600.0 million loan [177]. - The Company recognized a gain on extinguishment of debt of $14.4 million upon repaying a $478.0 million loan on Washington Square using proceeds from a public stock offering [178]. - As of June 30, 2025, the Company's total outstanding loan indebtedness was $6.88 billion, including $5.32 billion of consolidated debt and $1.59 billion of its pro rata share of unconsolidated joint venture debt [263]. - The Company completed nine transactions totaling approximately $1.8 billion in non-recourse loan maturities from early 2024 to mid-2025, with about $1.6 billion at the Company's pro rata share [267]. Cash Flow and Dividends - Cash provided by operating activities increased by $30.5 million from 2024 to 2025, primarily due to changes in assets and liabilities [249]. - Cash used in investing activities increased by $231.3 million from 2024 to 2025, mainly due to property acquisitions and contributions to unconsolidated joint ventures [250]. - The Company declared a cash dividend of $0.17 per share for each quarter of 2024 and the first two quarters of 2025 [186]. - The Company had cash dividends and distributions of $96.2 million for the six months ended June 30, 2025, funded by operations [270]. - The Company had cash and cash equivalents of $131.1 million as of June 30, 2025 [270]. Development and Redevelopment - The Company is redeveloping Scottsdale Fashion Square with an estimated total project cost of $84.0 million to $90.0 million, with a pro rata share of $42.0 million to $45.0 million [183]. - The redevelopment of Green Acres Mall is estimated to cost between $130.0 million and $150.0 million, with approximately $25.9 million incurred as of June 30, 2025 [184]. - The joint venture in FlatIron Crossing is developing luxury residential units and retail spaces with a total estimated cost of $245.0 million to $265.0 million, with a pro rata share of $125.0 million to $135.0 million [185]. - The Company expects to incur approximately $250.0 million to $300.0 million during 2025 for development, redevelopment, expansion, and renovations [255]. Interest Rates and Risk Management - The Company plans to continue managing interest rate risk through various strategies, including maintaining a ratio of fixed rate debt to total debt [280]. - A 1% increase in interest rates is estimated to decrease future earnings and cash flows by approximately $4.4 million per year based on $444.5 million of floating rate debt outstanding [285]. - The Company had one interest rate cap agreement in place as of June 30, 2025, to manage interest rate risk [284]. - The average interest rate on the fixed rate debt for the Consolidated Centers increased from 4.40% at December 31, 2024, to 4.49% at June 30, 2025 [282].