Macerich Company ((MAC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Macerich’s latest earnings call revealed a generally positive sentiment, driven by strong leasing activity and sales growth. The company showcased significant progress in its Path Forward plan, although challenges such as the impact of Forever 21’s liquidation and a maturing loan in technical default slightly tempered the positive momentum.
Significant Increase in Leasing Activity
During the third quarter, Macerich signed 1.5 million square feet of new and renewal leases, marking an impressive 87% increase from Q3 2024. Year-to-date, the company has signed leases totaling 5.4 million square feet, representing an 86% increase compared to the same period in 2024. This surge in leasing activity is a testament to Macerich’s robust leasing strategy.
Portfolio Sales and Occupancy Growth
Portfolio sales at the end of the third quarter reached $867 per square foot, reflecting a growth of almost 4% compared to the same period in 2024. Additionally, occupancy rates rose to 93.4%, up 140 basis points from the previous quarter, indicating a healthy demand for Macerich’s properties.
Progress on Path Forward Plan
Macerich has made substantial strides in its Path Forward plan, successfully reducing leverage to 7.76x net debt to EBITDA and achieving $1.2 billion in mall dispositions towards its $2 billion target. This progress underscores the company’s commitment to strengthening its financial position.
Successful Acquisition of Crabtree Mall
The acquisition of Crabtree Mall is expected to be a compelling investment for Macerich. The SNO pipeline has grown from $87 million in August to $99 million, putting the company on track to meet or exceed its $100 million target by year-end.
Positive Trailing 12-Month Leasing Spreads
Macerich reported positive trailing 12-month leasing spreads of 5.9% as of September 30, 2025, marking 16 consecutive quarters of positive leasing spreads. This consistent performance highlights the company’s ability to maintain favorable leasing terms.
Forever 21 Liquidation Impact
The liquidation of Forever 21 has posed a challenge, affecting occupancy rates. Of the 0.5 million square feet that became vacant, commitments have been made on 74% of that space, though it remains a transitional issue for the company.
South Plains Loan Maturity Issues
Macerich faces a challenge with a maturing loan of approximately $200 million on the South Plains property, which is expected to be in technical default at maturity. This issue requires careful management to mitigate potential financial impacts.
Flat Traffic Despite Sales Growth
Despite an increase in sales per square foot, traffic through the third quarter remained flat compared to the same period in 2024. This indicates that while sales are growing, visitor numbers have not yet followed suit.
Forward-Looking Guidance
Macerich has set ambitious goals for the future, with expectations to exceed $100 million in their SNO pipeline by year-end, potentially increasing to $140 million with the inclusion of Crabtree. The company also plans to open 30 targeted anchor stores between 2025 and 2028, including key tenants like Dick’s House of Sport.
In summary, Macerich’s earnings call painted a picture of a company making significant strides in leasing and sales growth, with a clear focus on executing its strategic plans. While challenges remain, particularly with the Forever 21 liquidation and loan maturity issues, the overall sentiment remains positive, driven by strong leasing activity and strategic acquisitions.