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The Macerich Company Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 7, 2012 10:22AM
The Macerich Company (MAC) filed Quarterly Report for the period ended 2012-03-31. Macerich Co has a market cap of $8.22 billion; its shares were traded at around $62.02 with a P/E ratio of 22.1 and P/S ratio of 10.2. The dividend yield of Macerich Co stocks is 3.5%.
Highlight of Business Operations:The increase in revenues and expenses of the Acquisition Properties during the three months ended March 31, 2012 in comparison to the three months ended March 31, 2011 is primarily due to the inclusion of the SDG Acquisition Properties in the results of operations in 2012. (See "Acquisitions and Dispositions" in Management's Overview and Summary).
The Company considers tenant annual sales per square foot (for tenants in place for 12 months or longer and under 10,000 square feet), occupancy rates (excluding large retail stores or "Anchors") for the Centers and releasing spreads (i.e. a comparison of average base rent per square foot on leases executed during the trailing twelve months to average base rent per square foot on leases expiring during the year) to be key performance indicators of the Company's internal growth.
Tenant sales per square foot increased from $449 for the three months ended March 31, 2011 to $504 for the three months ended March 31, 2012. Occupancy rate decreased from 92.3% at March 31, 2011 to 92.1% at March 31, 2012. Releasing spreads increased 15.8% for the twelve months ended March 31, 2012. These calculations exclude Valley View Center, Granite Run Mall, Shoppingtown Mall and Centers under development or redevelopment.
The Company's recent trend of retail sales growth continued during the three months ended March 31, 2012 with tenant sales per square foot increasing compared to the three months ended March 31, 2011. The Company expects that releasing spreads will continue to be positive during 2012 as it renews or relets leases that are scheduled to expire during the year. The Company's occupancy rate as of March 31, 2012 decreased compared to March 31, 2011 primarily because of the liquidation of one tenant. Although certain aspects of the U.S. economy, the retail industry as well as the Company's operating results have continued to improve, economic and political uncertainty remains in various parts of the world. In addition, the U.S. economy is still experiencing weakness, high levels of unemployment have persisted and rental rates and valuations for retail space have not fully recovered to pre-recession levels. Any further continuation of these adverse conditions could harm the Company's business, results of operations and financial condition.
The Company expects amounts to be incurred during the next twelve months for tenant allowances and deferred leasing charges to be comparable or less than 2011 and that capital for those expenditures will be available from working capital, cash flow from operations, borrowings on property specific debt or unsecured corporate borrowings. The Company expects to incur between $200 million and $300 million during the next twelve months for development, redevelopment, expansion and renovations. Capital for these major expenditures, developments and/or redevelopments has been, and is expected to continue to be obtained from a combination of debt or equity financings, which are expected to include borrowings under the Company's line of credit and construction loans. The Company has also generated liquidity in the past through equity offerings, property refinancings, joint venture transactions and the sale of non-core assets including the sales of Chandler Village Center, Chandler Festival and SanTan Village Power Center (See "Acquisitions and Dispositions" in Management's Overview and Summary), and has plans to sell additional non-core assets in 2012. Furthermore, the Company has filed a shelf registration statement which registered an unspecified amount of common stock, preferred stock, depositary shares, debt securities, warrants, rights and units.
Stocks Discussed: MAC,