MACERICH (MAC) Q1 FY26 earnings call: guidance and Q&A

Confirm no mortgage was assumed for Annapolis Mall and discuss long-term capitalization plans.

Management confirmed no mortgage was assumed, with the acquisition funded by cash on hand (including $85 million from ATM equity) and $150 million from the revolving line of credit. This resulted in a leverage-neutral outcome for 2028 targets. Long-term funding options will be evaluated over time, leveraging existing credit facility capacity.

“So, the initial funding was funded with cash on hand. As part of that, there was $85 million of proceeds that we used on the ATM. And additionally, we put $150 million of borrowings on our revolving line of credit.”

asked by Unknown Analyst · answered by Daniel Swanstrom

Explain how Annapolis Mall's yield will increase from 10.5% to 11%+ at stabilization, focusing on leasing and value-add opportunities.

The yield increase is driven by existing leasing momentum from the prior owners, with 18 new leases rolling in 2026-2027. Macerich sees significant opportunity in leasing 52,000 square feet of prime in-line space, flipping underperforming tenants, and evaluating the vacant Sears parcel for future retail, mixed-use, or alternative development. The goal is to stabilize the center and consolidate the trade area.

“So, a lot of those 18 leases that we talked about are effectively rolling in this year and next year as part of that SNO component. But what's really exciting for our team is that 52,000 square feet of prime space that if you look on that leasing map diagram in our deck, that's Center Court, that's opposite Uniqlo, which is soon to open and where Dick's is opening in August.”

asked by Andrew Reale · answered by Jackson Hsieh

Confirm if the 'at least 3%' same-store NOI growth target for 2026 is still the base case, given year-to-date leasing activity.

Management reiterated that the go-forward NOI growth for 2026 is still expected to be at least 3%, with the contribution being back-end weighted. They emphasized that NOI growth is expected to accelerate materially in 2027 and 2028 as the SNO pipeline tenants open and begin paying rent.

“As I mentioned in the prepared remarks, we continue to expect that go-forward NOI for 2026 will be at least 3%. And as we've mentioned before, and I'll reiterate, it's kind of back-end weighted towards the end of 2026.”

asked by Viktor Fediv · answered by Daniel Swanstrom

Request a breakdown of new versus renewal leasing for the 1.6 million square feet signed and commentary on re-leasing spreads.

Of the 1.6 million square feet leased, 700,000 square feet were new deals, including anchor tenants like Von Mauer, Round 1, and Zara, and mall shop stores. Management noted the healthy retail environment and strong tenant demand. Regarding re-leasing spreads, they stated they are no longer using that metric and will introduce a more thoughtful metric after the Path Forward plan is completed.

“Yes. So, the 1.6 million square feet we leased 700,000 square feet of it was to new retailers, some of which were anchor stores, some of which were in line. I think I mentioned in my prepared remarks, we did a Von Mauer deal at Freehold. We did a round 1 deal at Washington Square and Zara at Los Cerritos.”

asked by Michael Griffin · answered by Doug Healey

Inquire about sales trends for luxury versus non-luxury tenants and across the portfolio, given the K-shaped economy.

Management noted that the middle and upper-income groups are still spending, with Q1 comparable sales up 3.8%. Only the shoes category was negative, while fast food, general, home furnishings, and jewelry were positive. They highlighted that more mature, elevated assets like Broadway Plaza, Kierland Commons, and Scottsdale Fashion Square saw double-digit traffic increases. Retailers are focused on value, newness, and innovation, and are expanding their physical stores due to positive top-line and bottom-line impacts.

“So, what we're seeing is as we continue to complete this plan, get these stores built out, get these environments and anchor stores secured, we believe that we're going to experience what we're experiencing in those centers like those 3 I just mentioned. And like I said, overall sales trend is pretty much unchanged from what we saw last year going into last year.”

asked by Ravi Vaidya · answered by Jackson Hsieh

Ask for the current physical permanent occupancy rate and how in-place occupancy cost compares to new leases, and its expected movement.

Current physical permanent occupancy is around 84%, projected to reach 88% to 89% once all new stores open. Management expects occupancy costs to increase as more tenants convert from gross leases to fixed rent plus fixed CAM and taxes. This shift, combined with increased traffic and productivity from new tenants, is expected to create a better ecosystem and more productive financial results.

“Yes. I mean I think our physical permanent sits at around 84% now. And when all these stores open, it's projected again in that range that we talked about, 88% to 89%. We're actually signing leases. You can see just when we have our disclosure, you can see the lease rates are going up.”

asked by Caitlin Burrows · answered by Jackson Hsieh