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Macerich Co MAC Stock Quote

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NYSE:MAC

Morningstar‘s Stock Analysis MAC

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Macerich Reports Slightly Lower-Than-Anticipated Q3 Results Due to Lower Lease Termination Income

Kevin Brown, CFA Senior Analyst

Analyst Note

| Kevin Brown, CFA |

Third-quarter results for Macerich were slightly below our expectations, though we don’t anticipate making any material changes to our $27.50 fair value estimate for the no-moat company. Occupancy improved 30 basis points sequentially to 92.1%, better than our estimate of remaining at 91.8%, and is up 180 basis points year over year. Re-leasing spreads of 6.6%, the strongest quarter Macerich has reported since the third quarter of 2019, were significantly better than the 6.3% decline we had anticipated. Despite improving occupancy and rent, same-store net operating income fell 3.5% year over year. However, this decline is due to lease termination income falling to just $1.5 million in the third quarter compared with $12.1 million in the third quarter of 2021, which we view as a positive for the health of Macerich’s tenants. Excluding the impact of lease termination income, same-store net operating income, or NOI, grew 2.1% in the quarter, which was relatively in line with our estimate of 2.7% growth. Funds from operation, or FFO, of $0.46 per share similarly missed our estimate of $0.49 due to lower lease termination income reported in the quarter.

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Key Statistics MAC

Company Profile MAC

Business Description

The Macerich Company is an S&P 500 company that invests in premium mall assets. The company owns 29 regional malls in its consolidated portfolio and 19 regional malls in its unconsolidated portfolio along with six power centers and six other real estate assets. The company's total portfolio has 47.6 million square feet of gross leasable area and averaged $801 sales per square foot over the 12 months prior to the pandemic, with the consolidated portfolio averaging $646 sales per square foot and the unconsolidated portfolio averaging $998 sales per square foot.

Contact
401 Wilshire Boulevard, Suite 700
Santa Monica, CA, 90401
T +1 310 394-6000
Industry REIT - Retail
Most Recent Earnings Sep 30, 2022
Fiscal Year End Dec 31, 2022
Employees 640

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