On February 27, 2025, Macerich Co (MAC, Financial) released its 8-K filing detailing its financial performance for the fourth quarter and full year ended December 31, 2024. The company, a prominent investor in premium mall assets, owns a substantial portfolio of 28 regional malls in its consolidated portfolio and 14 in its unconsolidated portfolio, along with other real estate assets, totaling 45.5 million square feet of gross leasable area.
Performance Overview and Challenges
Macerich Co (MAC, Financial) reported a net loss attributable to the company of $211.2 million, or $0.89 per share-diluted, for the fourth quarter of 2024. This is a significant decline compared to the net income of $62.2 million, or $0.29 per share-diluted, in the same quarter of the previous year. The reported EPS fell short of the analyst estimate of $0.04. However, the company's revenue for the quarter was $223.10 million, meeting the analyst estimate of $223.10 million.
The company's challenges include a decrease in same center net operating income (NOI) by 0.4% in Q4 2024 compared to Q4 2023. Despite these challenges, Macerich Co (MAC, Financial) has been actively executing its Path Forward Plan, focusing on simplifying the business, improving operational performance, and reducing leverage.
Financial Achievements and Strategic Initiatives
During the fourth quarter, Macerich Co (MAC, Financial) made significant strides in its strategic initiatives. The company completed the acquisition of its partner’s 40% interest in the Pacific Premier Retail Trust (PPRT) portfolio for $122 million, now owning 100% of key assets like Los Cerritos Center, Washington Square, and Lakewood Center. Additionally, the company successfully completed an underwritten public offering of 23 million shares, raising approximately $454 million, which was used to repay a substantial mortgage loan, thereby reducing leverage and strengthening the balance sheet.
Income Statement and Balance Sheet Insights
Funds from Operations (FFO), excluding certain expenses, was $116.7 million or $0.47 per share-diluted in Q4 2024, compared to $127.7 million or $0.57 per share-diluted in Q4 2023. The company's portfolio occupancy improved to 94.1% as of December 31, 2024, up from 93.5% a year earlier. This improvement is crucial for maintaining rental income stability and enhancing asset value.
The company's balance sheet reflects a proactive approach to managing debt maturities, with over $1.3 billion in loans refinanced during 2024. As of the filing date, Macerich Co (MAC, Financial) reported approximately $683 million in liquidity, including $540 million of available capacity on its revolving line of credit.
Operational Metrics and Leasing Activity
Macerich Co (MAC, Financial) reported a 15.3% increase in leased square footage during Q4 2024 compared to the same period in 2023. The company signed leases for 1.1 million square feet in the quarter, contributing to a total of 3.7 million square feet leased in 2024. The base rent re-leasing spreads were 8.8% greater than expiring base rent, marking the thirteenth consecutive quarter of positive leasing spreads.
Analysis and Outlook
Macerich Co (MAC, Financial)'s strategic initiatives under the Path Forward Plan are pivotal in navigating the current economic landscape. The company's focus on reducing leverage and enhancing operational performance is expected to bolster its financial stability. However, the reported net loss and decline in same center NOI highlight ongoing challenges in the retail real estate sector. The company's ability to maintain high occupancy rates and positive leasing spreads will be critical in driving future growth and profitability.
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Explore the complete 8-K earnings release (here) from Macerich Co for further details.
