The Macerich Company

The Macerich Company (NYSE: MAC) is a fully integrated, self-managed and self-administered real estate investment trust. The Company conducts its operations through The Macerich Partnership, L.P. (the Operating Partnership). The Company is focused on the acquisition, leasing, management, development and redevelopment of regional retail centers throughout the United States. The Company, through its operating partnership, owns ownership interests in approximately 45 million square feet of gross leasable area (GLA) consisting primarily of interests in 42 regional retail centers, three community/power shopping centers and one redevelopment property.

Recent Business and Financial Updates

• Quarterly Financial Performance:
  • The Macerich Company reported a net loss attributable to the company of USD 108.2 million, or USD 0.50 per diluted share, for the third quarter of 2024. This reflects a notable improvement compared to a net loss of USD 262.5 million, or USD 1.22 per diluted share, recorded in the same quarter of 2023. Funds from Operations (FFO), excluding specific financing expenses, accrued interest, and losses, amounted to USD 86.0 million, or USD 0.38 per diluted share, compared to USD 100.6 million, or USD 0.45 per diluted share, in the prior year. Same-center net operating income (NOI), excluding lease termination income, rose by 1.9% year-over-year.
  • Portfolio tenant sales per square foot for spaces under 10,000 square feet were USD 834 for the trailing twelve months ending September 30, 2024. This represents a slight decline from USD 835 in the previous quarter and USD 847 in the same quarter of 2023. For the nine months ending September 30, 2024, portfolio tenant sales from comparable spaces decreased modestly by 1.0% compared to the same period in 2023.
• Leasing and Occupancy Metrics:
  • As of September 30, 2024, portfolio occupancy stood at 93.7%, up from 93.4% in the prior year and 93.3% in the preceding quarter. Base rent re-leasing spreads for the trailing twelve months ended September 30, 2024, were 11.9% higher than expiring base rents, marking the twelfth consecutive quarter of positive leasing spreads.
  • During the third quarter, Macerich signed leases for 831,000 square feet, a 16% increase in leased square footage compared to the same quarter in 2023. Year-to-date through September 30, 2024, the company leased 2.6 million square feet, a 14% decline compared to the same period in 2023. Despite the decrease, Macerich expects to meet or exceed its historic leasing pace of nearly 3.8 million square feet annually achieved in 2021, 2022, and 2023.
• Significant Transactions and Financing Activity:
  • In the third quarter, Macerich completed key transactions to optimize its portfolio and financial position. On July 31, 2024, the company sold its 50% interest in Biltmore Fashion Park in Phoenix, AZ, for USD 110 million, reflecting a 6.5% implied cap rate. Additionally, the company refinanced the loan on The Mall of Victor Valley on August 22, 2024, securing USD 85 million at a fixed interest rate of 6.72% for ten years.
  • Subsequently, on October 24, 2024, Macerich acquired its partner’s 40% interest in the PPRT portfolio for USD 122 million, representing a 7.4% implied cap rate. This transaction was funded through proceeds from its at-the-market (ATM) equity program. On October 28, 2024, the company refinanced the loan on Queens Center, replacing the existing USD 600 million loan with a USD 525 million facility at a fixed interest rate of 5.37%. The sale of The Oaks for USD 157 million is under contract and expected to close in the fourth quarter of 2024.
• Balance Sheet and Liquidity:
  • During the third quarter, Macerich raised USD 151.7 million by selling 9.4 million shares of common stock through its ATM program at an average price of USD 16.14 per share. These funds were utilized to finance the PPRT acquisition and reduce leverage on Queens Center.
  • As of the filing date, the company reported liquidity of approximately USD 667 million, comprising USD 505 million in available capacity on its USD 650 million revolving line of credit. These measures enhance the company's financial flexibility and support its strategic initiatives.
• Guidance and Strategic Direction: On April 30, 2024, Macerich withdrew its 2024 guidance due to uncertainties associated with the implementation of its Path Forward Plan and the timing and impact of related transactions. The company has not provided updated guidance but remains committed to executing its strategic plan to enhance long-term shareholder value.
• Dividend Announcement: On October 31, 2024, Macerich declared a quarterly cash dividend of USD 0.17 per share of common stock. This dividend will be paid on December 2, 2024, to shareholders of record as of November 12, 2024. The announcement reflects Macerich’s ongoing dedication to returning value to its shareholders while navigating a dynamic operating environment.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 48.28, downward trending, with expectations of a consolidation or support from the current important support levels of USD 18-USD 20. Additionally, the stock's current positioning is above both the 50-period SMA and 200-period SMA, which may serve as dynamic short to medium-term support levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given for The Macerich Company (NYSE: MAC) at the closing market price of USD20.24, as of January 02, 2025. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is January 02, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.