Macerich's Occupancy and Sales per Square Foot Continue to Improve in Second Quarter

Macerich reported second-quarter results that were slightly better than we anticipated, leading us to reaffirm our $28.50 fair value estimate for the no-moat company. Occupancy improved 50 basis points sequentially to 91.8%, better than our estimate of 91.2%. Re-leasing spreads remained positive but very low, with new rents just 0.6% higher than prior rent levels, in line with our expectations. Still, Macerich recorded same-store net operating income growth of 7.8% in the quarter. Macerich reported funds from operations per share of $0.46 in the second quarter; this was below the $0.59 reported in the second quarter of 2021, though the $0.13 decline was due to the company benefiting from nonrecurring mark-to-market valuation adjustments and gains recorded on land sales that had a combined $0.16 impact. Therefore, Macerich reported FFO that was $0.03 better than recurring FFO reported in 2021 and $0.03 better than our estimate for the quarter.