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The Macerich Company Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 5, 2012 04:11PM
The Macerich Company (MAC) filed Quarterly Report for the period ended 2012-09-30.
Highlight of Business Operations:For comparison of the three months ended September 30, 2012 to the three months ended September 30, 2011, the Acquisition Properties include Fashion Outlets of Niagara Falls USA, the SDG Acquisition Properties and 500 North Michigan Avenue. For comparison of the nine months ended September 30, 2012 to the nine months ended September 30, 2011, the Acquisition Properties include Desert Sky Mall, the Kohl's store at Capitola Mall, Superstition Springs Land, Fashion Outlets of Niagara Falls USA, the SDG Acquisition Properties and 500 North Michigan Avenue. The increase in revenues and expenses of the Acquisition Properties during the three and nine months ended September 30, 2012 in comparison to the three and nine months ended September 30, 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 a minimum of 12 months and 10,000 square feet and under) for regional shopping centers, 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
Tenant sales per square foot increased from $467 for the twelve months ended September 30, 2011 to $511 for the twelve months ended September 30, 2012. Occupancy rate increased from 91.9% at September 30, 2011 to 93.0% at September 30, 2012. Releasing spreads increased 18.5% for the twelve months ended September 30, 2012. These calculations exclude Valley View Center, Granite Run Mall, Shoppingtown Mall, Prescott Gateway and Centers under development or redevelopment.
The Company's recent trend of retail sales growth continued during the twelve months ended September 30, 2012 with tenant sales per square foot and releasing spreads increasing compared to the twelve months ended September 30, 2011. The Company expects that releasing spreads will continue to be positive during the remainder of 2012 as it renews or relets leases that are scheduled to expire during the year. The Company's occupancy rate as of September 30, 2012 also increased compared to September 30, 2011. 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.
On August 17, 2012, the Company entered into an equity distribution agreement ("Distribution Agreement") with a number of sales agents to issue and sell, from time to time, shares of common stock, having an aggregate offering price of up to $500 million (the "Shares"). Sales of the Shares, if any, may be made in privately negotiated transactions and/or any other method permitted by law, including sales deemed to be an "at the market" offering, which includes sales made directly on the New York Stock Exchange or sales made to or through a market maker other than on an exchange. This offering is referred to herein as the "ATM Program." During the three months ended September 30, 2012, the Company sold 2,961,903 shares of common stock under this ATM Program in exchange for aggregate gross proceeds of $177.9 million and net proceeds of $175.9 million, after commissions and other transaction costs. The proceeds from the sales were used to pay down the Company's line of credit. As of September 30, 2012, $322.1 million remained available to be sold under the ATM Program. Actual future sales will depend upon a variety of factors including but not limited to market conditions, the trading price of the Company's common stock and our capital needs. The Company has no obligation to sell the remaining shares available for sale under the ATM Program.
Stocks Discussed: MAC,