The Macerich Company
11/05/2025 | Press release | Distributed by Public on 11/05/2025 07:41
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
IMPORTANT INFORMATION RELATED TO FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q of The Macerich Company (the "Company") contains or incorporates statements that constitute forward-looking statements within the meaning of the federal securities laws. Any statements that do not relate to historical or current facts or matters are forward-looking statements. You can identify some of the forward-looking statements by the use of forward-looking words, such as "may," "will," "could," "should," "expects," "anticipates," "intends," "projects," "predicts," "plans," "believes," "seeks," "estimates," "scheduled" and variations of these words and similar expressions. Statements concerning current conditions may also be forward-looking if they imply a continuation of current conditions. Forward-looking statements appear in a number of places in this Form 10-Q and include statements regarding, among other matters:
•expectations regarding the Company's growth;
•expectations regarding the Company's Path Forward Plan and its ability to meet the goals established under such plan;
•the Company's beliefs regarding its acquisition, redevelopment, development, leasing and operational activities and opportunities, including the performance and financial stability of its retailers;
•the Company's acquisition, disposition and other strategies;
•regulatory matters pertaining to compliance with governmental regulations;
•the Company's capital expenditure plans and expectations for obtaining capital for expenditures;
•the Company's expectations regarding income tax benefits;
•the Company's expectations regarding its financial condition or results of operations; and
•the Company's expectations for refinancing its indebtedness, entering into and servicing debt obligations and entering into joint venture arrangements.
Stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company or the industry to differ materially from the Company's future results, performance or achievements, or those of the industry, expressed or implied in such forward-looking statements. Such factors include, among others, general industry, as well as global, national, regional and local economic and business conditions, including the impact of tariffs and elevated interest rates and inflation, which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of current and prospective tenants, anchor or tenant bankruptcies, closures, mergers or consolidations, lease rates, terms and payments; elevated interest rates and its impact on the financial condition and results of operations of the Company, including as a result of any increased borrowing costs on the Company's outstanding floating-rate debt and defaults on mortgage loans, availability, terms and cost of financing and operating expenses; adverse changes in the real estate markets including, among other things, competition from other companies, retail formats and technology, risks of real estate development and redevelopment (including elevated inflation, supply chain disruptions and construction delays), acquisitions and dispositions; adverse impacts from any pandemic, epidemic or outbreak of any highly infectious disease on the U.S., regional and global economies and the financial condition and results of operations of the Company and its tenants; the liquidity of real estate investments; government shutdowns and other governmental actions and initiatives (including legislative and regulatory changes); environmental and safety requirements; and terrorist activities or other acts of violence which could adversely affect all of the above factors. You are urged to carefully review the disclosures we make concerning these risks and other factors that may affect our business and operating results, including those made in "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, as well as our other reports filed with the Securities and Exchange Commission (the "SEC"), which disclosures are incorporated herein by reference. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. The Company does not intend, and undertakes no obligation, to update any forward-looking information to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, unless required by law to do so.
Management's Overview and Summary
The Company is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community/power shopping centers located throughout the United States. The Company is the sole general partner of, and owns a majority of the ownership interests in, The Macerich Partnership, L.P. (the "Operating Partnership"). As of September 30, 2025, the Operating Partnership owned or had an ownership interest in 37 regional retail centers (including office, hotel and residential space adjacent to these shopping centers) and one community/power shopping center. These 38 regional retail centers and community/power shopping center consist of approximately 39 million square feet of gross leasable area ("GLA") and are referred to herein as the "Centers". The Centers consist of consolidated Centers ("Consolidated Centers")
and unconsolidated joint venture Centers ("Unconsolidated Joint Venture Centers"), unless the context otherwise requires. The property management, leasing and redevelopment of the Company's portfolio is provided by the Company's seven management companies (collectively referred to herein as the "Management Companies"). The Company is a self-administered and self-managed real estate investment trust ("REIT") and conducts all of its operations through the Operating Partnership and the Management Companies.
The following discussion is based primarily on the consolidated financial statements of the Company for the three and nine months ended September 30, 2025 and 2024. It compares the results of operations for the three months ended September 30, 2025 to the results of operations for the three months ended September 30, 2024. It also compares the results of operations and cash flows for the nine months ended September 30, 2025 to the results of operations and cash flows for the nine months ended September 30, 2024.
This information should be read in conjunction with the accompanying consolidated financial statements and notes thereto.
Acquisitions:
On May 14, 2024, the Company acquired its joint venture partner's 40% interest in each of Arrowhead Towne Center and South Plains Mall for a purchase price of $36.4 million and the assumption of its joint venture partner's share of debt for each property. The Company now owns and has consolidated its 100% interests in Arrowhead Towne Center and South Plains Mall (See Note 15-Acquisitions in the Notes to the Consolidated Financial Statements).
On May 17, 2024, the Company acquired the former Sears parcel located at Inland Center for $5.4 million (See Note 15-Acquisitions in the Notes to the Consolidated Financial Statements).
On October 24, 2024, the Company acquired its joint venture partner's 40% interest in the Pacific Premier Retail Trust portfolio, which included Los Cerritos Center, Washington Square and Lakewood Center, for a net purchase price of approximately $122.1 million, which included the assumption of the partner's share of property level indebtedness. The Company now owns and has consolidated its 100% interests in these properties in its consolidated financial statements. On August 18, 2025, the Company sold Lakewood Center (See Note 15-Acquisitions and Note 16-Dispositions in the Notes to the Consolidated Financial Statements).
On June 23, 2025, the Company acquired Crabtree Mall, a 1,325,000 square foot regional retail center in Raleigh, North Carolina, for a total purchase price of $290.0 million. The acquisition was initially funded with cash on hand and $100.0 million of borrowings on the Company's credit facility (See "Financing Activities" and Note 15-Acquisitions in the Notes to the Consolidated Financial Statements).
Dispositions:
On June 13, 2024, the partnership agreement between the Company and its joint venture partner was amended and as a result, the Company no longer accounts for its investment in Chandler Fashion Center as a financing arrangement. Effective June 13, 2024, the Company accounts for its investment in Chandler Fashion Center under the equity method of accounting (See Note 12-Financing Arrangement and Note 16-Dispositions in the Notes to the Consolidated Financial Statements).
On June 28, 2024, the Company's joint venture sold Country Club Plaza, a 971,000 square foot regional retail center in Kansas City, Missouri, for $175.6 million. Concurrent with the sale, the remaining amount owed by the joint venture under the $295.5 million loan ($147.7 million at the Company's share) was forgiven by the lender.
On June 28, 2024, the Company sold a former department store parcel at Valle Vista Mall in Harlingen, Texas for $7.1 million. The Company used the net proceeds to pay down debt. The Company recognized a gain on sale of assets of $0.8 million (See Note 16-Dispositions in the Notes to the Consolidated Financial Statements).
On July 31, 2024, the Company sold its 50% interest in Biltmore Fashion Park, a 611,000 square foot regional retail center in Phoenix, Arizona, for $110.0 million. The Company used the net proceeds to pay down debt. As a result of this transaction, the Company recognized a gain of $42.8 million (See "Liquidity and Capital Resources" and Note 4-Investments In Unconsolidated Joint Ventures in the Notes to the Consolidated Financial Statements).
On November 25, 2024, the Company sold Southridge Mall, a 791,000 square foot power center in Des Moines, Iowa, for $4.0 million, which resulted in a loss on sale of assets of $0.9 million. The Company used the net proceeds to pay down debt.
On December 10, 2024, the Company sold The Oaks, a 1,206,000 square foot regional retail center in Thousand Oaks, California, for $157.0 million, which resulted in a loss on sale of assets of $6.9 million. The Company used the net proceeds to pay off the $147.8 million loan on the property.
For the twelve months ended December 31, 2024, the Company and certain joint venture partners sold various land parcels in separate transactions, resulting in the Company's share of the gain on sale of land of $2.8 million. The Company used its share of the proceeds from these sales of $6.1 million to pay down debt and for other general corporate purposes.
On March 27, 2025, the Company sold Wilton Mall, a 740,000 square foot regional retail center in Saratoga Springs, New York, for $24.8 million, which resulted in a loss on sale of assets of $2.9 million. The Company used the net proceeds to pay down debt and for other general corporate purposes.
On April 16, 2025, the Company sold a parcel at SanTan Adjacent in Gilbert, Arizona for $3.0 million, which resulted in a loss on sale of assets of $0.2 million. On April 28, 2025, the Company sold various parcels at SanTan Adjacent in Gilbert, Arizona for $24.5 million, which resulted in a gain on sale of assets of $0.1 million. The Company used the net proceeds from these sales to pay down debt and for other general corporate purposes.
On April 30, 2025, the Company sold SouthPark Mall, an 802,000 square foot regional retail center in Moline, Illinois, for $10.5 million, which resulted in a loss on sale of assets of $4.3 million. The Company used the net proceeds for general corporate purposes. This asset was unencumbered.
On May 28, 2025, the Company sold Paradise Village Office Park in Phoenix, Arizona for $6.2 million, which resulted in a loss on sale of assets of $0.6 million. The Company used the net proceeds for general corporate purposes.
On June 11, 2025, the Company sold a former department store parcel located in Petaluma, California, for $2.6 million, which resulted in a gain on sale of assets of $2.0 million. The Company used the net proceeds for general corporate purposes.
On June 30, 2025, the Company sold 1010-1016 Market Street parcels at Fashion District Philadelphia in Philadelphia, Pennsylvania for $10.8 million, which resulted in a gain on sale of assets of $2.4 million. The Company used the net proceeds for general corporate purposes.
On June 30, 2025, the Company sold its remaining 5% effective interest in Paradise Valley Mall in Phoenix, Arizona for $5.5 million, which resulted in a loss on sale of assets of $1.2 million. The Company used the proceeds for general corporate purposes.
On July 30, 2025, the Company's joint venture sold Atlas Park, a 374,000 square foot community center in Queens, New York, for $72.0 million. Concurrent with the sale, the $65.0 million loan ($32.5 million at the Company's share) owed by the joint venture was paid off in full. The Company's share of the gain from this transaction was approximately $12.0 million. The Company used its share of the net proceeds for general corporate purposes.
On August 18, 2025, the Company closed on the sale of Lakewood Center in Lakewood, California, for $332.1 million, including the assumption by the buyer of the $317.1 million loan on the property that had a June 2026 maturity date. The Company recognized a gain on sale of assets of $21.1 million. The Company used its share of net proceeds from this sale, totaling approximately $5.0 million for general corporate purposes.
On August 20, 2025, the Company closed on the sale of Valley Mall in Harrisburg, Virginia, for $22.1 million, which resulted in a gain on sale of assets of $0.3 million. This asset was unencumbered. The Company used the net proceeds of approximately $20.9 million from this sale for general corporate purposes.
For the three and nine months ended September 30, 2025, the Company and certain joint venture partners sold various land parcels in separate transactions, resulting in the Company's share of the gains on sale of land of $1.2 million and $2.0 million, respectively. The Company's proceeds from these sales in the three and nine months ended September 30, 2025 were $2.0 million and $14.3 million, respectively. The Company used its share of the proceeds from these sales to pay down debt and for other general corporate purposes.
Financing Activities:
On January 10, 2024, the Company's joint venture in Boulevard Shops replaced the existing $23.0 million mortgage loan on the property with a new $24.0 million loan that bears interest at a variable rate of SOFR plus 2.50%, is interest only during the entire loan term and matures on December 5, 2028. The new loan has a required interest rate cap throughout the term of the loan at a strike rate of 7.5%.
On January 22, 2024, the Company repaid the majority of the mortgage loan on Fashion District Philadelphia. The remaining $8.2 million was scheduled to mature on April 21, 2024 and was paid in full prior to maturity.
On January 25, 2024, the Company replaced the existing $116.9 million mortgage loan on Danbury Fair Mall with a new $155.0 million loan that bears interest at a fixed rate of 6.39%, is interest only during the majority of the loan term and matures on February 6, 2034.
On April 9, 2024, the Company defaulted on the $300.0 million loan on Santa Monica Place. The Company has completed transition of the property to a receiver but is still the owner of record.
On May 24, 2024, the Company closed a two-year extension of the $149.9 million loan on The Oaks, which was scheduled to mature on June 5, 2026. The interest rate during the first year of the extended term was 7.5% and would have increased to 8.5% during the second year of the extended term. On December 10, 2024, the Company repaid in full the $147.8 million loan with the net proceeds from the sale of the property (See "Dispositions").
On June 27, 2024, the Company's joint venture in Chandler Fashion Center replaced the existing $256.0 million loan on the property with a new $275.0 million loan that bears interest at 7.06%, is interest only during the entire loan term and matures on July 1, 2029. The Company received a distribution of $17.7 million in connection with the refinancing.
On August 22, 2024, the Company closed an $85.0 million, ten-year refinance of the loan on The Mall of Victor Valley. The new loan bears interest at a fixed rate of 6.72%, is interest only during the entire loan term and matures on September 6, 2034.
On October 28, 2024, the Company closed a $525.0 million, five-year refinance of the loan on Queens Center, which matures on November 6, 2029. The new loan replaced the existing $600.0 million loan, bears interest at a fixed rate of 5.37% and is interest only during the entire loan term.
On December 2, 2024, the Company repaid in full the $478.0 million loan on Washington Square with the net proceeds received from the Company's public stock offering, which closed on November 27, 2024, together with cash on hand (See "Other Transactions and Events"). The mortgage loan on the property was scheduled to mature on November 1, 2026. The Company recognized a gain on extinguishment of debt of $14.4 million upon the repayment of the loan.
On February 7, 2025, the Company's joint venture in Flatiron Crossing repaid in full the $14.5 million mezzanine loan and $14.5 million of the first mortgage, and obtained a 90-day extension for the remaining $140.5 million of the first mortgage. The mezzanine loan had an interest rate of SOFR plus 12.25% and the first mortgage had an interest rate of SOFR plus 2.90% for a weighted average aggregate interest rate of SOFR plus 3.70%. The interest rate on the first mortgage was SOFR plus 2.90% during the extension period. On March 28, 2025, the Company's joint venture in Flatiron Crossing repaid in full the remaining $140.5 million ($71.6 million at the Company's share) of the first mortgage, as discussed below.
On March 27, 2025, the Company closed a $340.0 million, ten-year loan on Washington Square, which matures on April 6, 2035. The loan bears interest at a fixed rate of 5.58% and is interest only during the entire loan term. The Company used a portion of the net proceeds from this refinancing to repay the remaining first mortgage on Flatiron Crossing, which was $71.6 million at the Company's share, and to repay the balance outstanding on the Company's revolving credit facility of $110.0 million.
On July 30, 2025, the Company's joint venture in Atlas Park repaid in full the $65.0 million loan ($32.5 million at the Company's pro rata share) concurrent with the sale of the property (See "Dispositions").
On August 7, 2025, the Company closed on an initial $159.1 million two-year term loan with two one-year extension options on Crabtree Mall. The term loan also allows for additional requested advances of up to $51.2 million based on defined conditions for capital expenditures and leasing costs for a maximum total term loan of $210.3 million. The term loan bears interest at a rate of SOFR plus 2.50%. The Company has purchased a SOFR interest rate cap for the initial term loan advance with a strike rate of 5.0% for the two-year base term of the term loan. The Company used a portion of the net proceeds from this term loan to fully repay borrowings outstanding on the Company's revolving credit facility (See Note 15 - Acquisitions and Note 11 - Bank and Other Notes Payable).
On August 18, 2025, as part of the sale of Lakewood Center, the Company's remaining loan of $317.1 million on the property was assumed by the purchaser (See "Dispositions").
Redevelopment and Development Activities:
The Company's joint venture in Scottsdale Fashion Square, a 1,878,000 square foot regional retail center in Scottsdale, Arizona, is redeveloping a two-level Nordstrom wing with luxury-focused retail and restaurant uses. The total cost of the project is estimated to be between $84.0 million and $90.0 million, with $42.0 million to $45.0 million estimated to be the Company's pro rata share. The Company has incurred approximately $32.1 million of the total $64.2 million incurred by the joint venture as of September 30, 2025. The opening will be in phases which began in 2024, with anticipated completion in 2027. The majority of tenants are expected to be open in 2026, with a few remaining tenants expected to open in early 2027.
The Company is redeveloping the northeast quadrant of Green Acres Mall, a 2,076,000 square foot regional retail center in Valley Stream, New York. The project will include new exterior shops and facade totaling approximately 375,000 square feet of leasing, including new grocery use, redevelopment of a vacant anchor building and demolition of another vacant anchor building. The total cost of the project is estimated to be between $130.0 million and $150.0 million. The Company has incurred
approximately $31.4 million as of September 30, 2025. The anticipated opening is in 2026 for the majority of the tenants, with one anchor tenant expected to open in 2027.
The Company's joint venture in FlatIron Crossing, a 1,390,000 square foot regional retail center in Broomfield, Colorado, is developing luxury, multi-family residential units, new/repurposed retail and food and beverage uses, and a community plaza, in addition to the redevelopment of the vacant former Nordstrom store located on the property. The Company's ownership percentage is 43.4% in the residential portion of the development and 51.0% in the remainder of the property. The total cost of the project is estimated to be between $245.0 million and $265.0 million, with $125.0 million to $135.0 million estimated to be the Company's pro rata share. The Company has incurred approximately $22.8 million of the total $47.7 million incurred by the joint venture as of September 30, 2025. The anticipated opening will be in phases beginning in 2027.
Other Transactions and Events:
The Company declared a cash dividend of $0.17 per share of its common stock for each quarter of 2024 and the first three quarters of 2025. On October 30, 2025, the Company announced a fourth quarter cash dividend of $0.17 per share of its common stock, which will be paid on December 29, 2025 to stockholders of record on December 15, 2025. The dividend amount will be reviewed by the Board on a quarterly basis.
In connection with the commencement of an "at the market" offering program on March 26, 2021, which is referred to as the "2021 ATM Program," the Company entered into an equity distribution agreement with certain sales agents pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $500.0 million. During the twelve months ended December 31, 2024, the Company sold 9.4 million shares of common stock for approximately $148.6 million of net proceeds through the 2021 ATM Program at a weighted average share price of $15.81. The 2021 ATM Program was fully utilized as of September 30, 2024 and is no longer active.
In connection with the commencement of a separate "at the market" offering program on November 12, 2024, which is referred to as the "2024 ATM Program," the Company entered into an equity distribution agreement with certain sales agents pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $500.0 million. During the twelve months ended December 31, 2024, the Company sold 3.7 million shares of common stock for approximately $69.1 million of net proceeds through the 2024 ATM Program at a weighted average price of $18.68. During the three and nine months ended September 30, 2025, the Company sold 2.8 million shares of common stock for approximately $49.7 million of net proceeds through the 2024 ATM Program at a weighted average price of $18.03. As of September 30, 2025, the Company had approximately $378.4 million of gross sales of its common stock available under the 2024 ATM Program.
On November 27, 2024, the Company completed a public offering of 23.0 million shares of its common stock at a price per share of $19.75, which includes the underwriters' full exercise of their option to purchase an additional 3.0 million shares, for gross proceeds of approximately $454.3 million. The net proceeds of the offering were approximately $439.5 million after deducting the underwriting discount and offering costs of approximately $14.8 million. The Company used the proceeds from the offering, together with cash on hand, to repay the mortgage loan secured by its Washington Square property.
See "-Liquidity and Capital Resources" for a further discussion of the Company's anticipated liquidity needs, and the measures taken by the Company to meet those needs.
Inflation:
Most of the leases at the Centers have rent adjustments periodically throughout the lease term. These rent increases are either in fixed increments or based on using an annual multiple of increases in the Consumer Price Index. In addition, the routine expiration of leases for spaces 10,000 square feet and under each year enables the Company to replace existing leases with new leases at higher base rents if the rents of the existing leases are below the then existing market rate. The Company has generally entered into leases that require tenants to pay a stated amount for operating expenses, generally excluding property taxes, regardless of the expenses actually incurred at any Center, which places the burden of cost control on the Company. Additionally, most leases require the tenants to pay their pro rata share of property taxes and utilities. Inflation is expected to have a negative impact on the Company's operating and capital costs for the remainder of 2025.
Critical Accounting Policies and Estimates
The preparation of financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Some of these estimates and assumptions include judgments on revenue recognition, estimates for common area maintenance and real estate tax accruals, provisions for uncollectible accounts, impairment of long-lived assets, the allocation of purchase price between tangible and intangible assets, capitalization of costs and fair value measurements. The Company's significant accounting policies and estimates are described in more detail in Note 2-Summary of Significant Accounting Policies in the Company's Notes to the Consolidated Financial Statements. However, the following policies are deemed to be critical.
Acquisitions:
Upon the acquisition of real estate properties, the Company evaluates whether the acquisition is a business combination or asset acquisition. For both business combinations and asset acquisitions, the Company allocates the purchase price of properties to acquired tangible assets and intangible assets and liabilities. For asset acquisitions, the Company capitalizes transaction costs and allocates the purchase price using a relative fair value method allocating all accumulated costs. For business combinations, the Company expenses transaction costs incurred and allocates purchase price based on the estimated fair value of each separately identified asset and liability. The Company allocates the estimated fair value of acquisitions to land, building, tenant improvements and identified intangible assets and liabilities, based on their estimated fair values. In addition, any assumed mortgage notes payable are recorded at their estimated fair values. The estimated fair value of the land and buildings is determined utilizing an "as if vacant" methodology. Tenant improvements represent the tangible assets associated with the existing leases valued on a fair value basis at the acquisition date prorated over the remaining lease terms. The tenant improvements are classified as an asset under property and are depreciated over the remaining lease terms. Identifiable intangible assets and liabilities relate to the value of in-place operating leases which come in three forms: (i) leasing commissions and legal costs, which represent the value associated with "cost avoidance" of acquiring in-place leases, such as lease commissions paid under terms generally experienced in the Company's markets; (ii) value of in-place leases, which represents the estimated loss of revenue and of costs incurred for the period required to lease the "assumed vacant" property to the occupancy level when purchased; and (iii) above or below-market value of in-place leases, which represents the difference between the contractual rents and market rents at the time of the acquisition, discounted for tenant credit risks. Leasing commissions and legal costs are recorded in deferred charges and other assets and are amortized over the remaining lease terms. The value of in-place leases are recorded in deferred charges and other assets and amortized over the remaining lease terms plus any below-market fixed rate renewal options. Above or below-market leases are classified in deferred charges and other assets or in other accrued liabilities, depending on whether the contractual terms are above or below-market, and the asset or liability is amortized to minimum rents over the remaining terms of the leases. The remaining lease terms of below-market leases may include certain below-market fixed-rate renewal periods. In considering whether or not a lessee will execute a below-market fixed-rate lease renewal option, the Company evaluates economic factors and certain qualitative factors at the time of acquisition such as tenant mix in the Center, the Company's relationship with the tenant and the availability of competing tenant space.
Remeasurement gains are recognized when the Company becomes the primary beneficiary of an existing equity method investment that is a variable interest entity to the extent that the fair value of the existing equity investment exceeds the carrying value of the investment, and remeasurement losses are recognized to the extent the carrying value of the investment exceeds the fair value. The fair value is determined based on a discounted cash flow model, with the significant unobservable inputs including discount rate, terminal capitalization rate and market rents.
Asset Impairment:
The Company assesses whether an indicator of impairment in the value of its properties exists by considering expected future operating income, trends and prospects, as well as the effects of demand, competition and other economic factors. Such factors include projected rental revenue, operating costs and capital expenditures as well as capitalization rates and estimated holding periods. The Company generally holds and operates its properties long-term, which decreases the likelihood of their carrying values not being recoverable. Changes in events or changes in circumstances may alter the expected hold period of an asset or asset group, which may result in an impairment loss and such loss could be material to the Company's financial condition or operating performance. If the carrying value of the property exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over its estimated fair value. Properties classified as held for sale are measured at the lower of the carrying amount or fair value less cost to sell.
The estimated fair value of a property is typically determined through a discounted cash flow analysis or based upon a contracted sales price. The discounted cash flow method includes significant unobservable inputs including the discount rate, terminal capitalization rate and market rents. Cash flow projections and rates are subject to management's judgment and changes in those assumptions could impact the estimation of fair value.
The Company's investments in unconsolidated joint ventures apply the same accounting model for property level impairment as described above. Further, the Company reviews its investments in unconsolidated joint ventures for a series of
operating losses and other factors that may indicate that a decrease in the value of its investments has occurred which is other-than-temporary. The investment in each unconsolidated joint venture is evaluated periodically, and as deemed necessary, for recoverability and valuation declines that are other-than-temporary. The Company records any such impairment up to the extent of its investment.
Results of Operations
Many of the variations in the results of operations, discussed below, occurred because of the transactions affecting the Company's properties described in Management's Overview and Summary above, including those related to the Redevelopment Properties, the Acquisition Property, the JV Transition Centers and the Disposition Properties (each as defined below).
For purposes of the discussion below, the Company defines "Same Centers" as those Centers that are substantially complete and in operation for the entirety of both periods of the comparison. Non-Same Centers for comparison purposes includes a recently acquired property ("Acquisition Property"), those Centers or properties that are going through a substantial redevelopment often resulting in the closing of a portion of the Center ("Redevelopment Properties"), those properties that have recently transitioned to or from equity method joint ventures to or from consolidated assets ("JV Transition Centers") and properties that have been disposed of ("Disposition Properties"). The Company moves a Center in and out of Same Centers based on whether the Center is substantially complete and in operation for the entirety of both periods of the comparison. Accordingly, the Same Centers consist of all Consolidated Centers, excluding the Redevelopment Properties, the JV Transition Centers, Santa Monica Place and the Disposition Properties, for the periods of comparison. Santa Monica Place is excluded from Same Centers due to the Company's default on the non-recourse loan on April 9, 2024 and the completion of the transition of the property to a receiver during the first quarter of 2025. The Company is still the owner of record of the property.
For the comparison of the three and nine months ended September 30, 2025 to the three and nine months ended September 30, 2024, the Acquisition Property is Crabtree Mall (See "Acquisitions" in Management's Overview and Summary). The JV Transition Centers are Arrowhead Towne Center, Chandler Fashion Center, Los Cerritos Center, Washington Square and South Plains Mall (See "Acquisitions" in Management's Overview and Summary). The Disposition Properties are The Oaks, Southridge Mall, Wilton Mall, Southpark Mall, Lakewood Center, Valley Mall and former department store parcels at Valle Vista Mall in Harlingen, Texas and in Petaluma, California (See "Dispositions" in Management's Overview and Summary). For the comparison of the three and nine months ended September 30, 2025 to the three and nine months ended September 30, 2024, there are no Redevelopment Properties.
Unconsolidated joint ventures are reflected using the equity method of accounting. The Company's pro rata share of the results from these Centers is reflected in the Consolidated Statements of Operations as equity in loss of unconsolidated joint ventures.
The Company considers tenant annual sales, occupancy rates (excluding large retail stores or "Anchors") and releasing spreads (i.e., a comparison of initial average base rent per square foot on leases executed during the trailing twelve months to average base rent per square foot at expiration for the leases expiring during the trailing twelve months based on the spaces 10,000 square feet and under) to be key performance indicators of the Company's internal growth.
During the trailing twelve months ended September 30, 2025, comparable tenant sales for spaces less than 10,000 square feet across the portfolio increased by 0.5% relative to the same period of 2024. The leased occupancy rate of 93.4% at September 30, 2025 represented a 0.3% decrease from 93.7% at September 30, 2024 and a 1.4% sequential increase compared to the 92.0% occupancy rate at June 30, 2025. Releasing spreads increased as the Company executed leases at an average rent of $68.75 for new and renewal leases executed compared to $64.89 on leases expiring, resulting in a releasing spread increase of $3.86 per square foot, or 5.9%, for the trailing twelve months ended September 30, 2025. This was the Company's sixteenth consecutive quarter of positive base rent leasing spreads.
As of September 30, 2025, the Company has executed renewal leases or commitments on 94% of its square footage expiring in 2025, that is anticipated to renew, which leases are expected to commence throughout 2025 and 2026 and another 5% of such expiring space is in the letter of intent stage. Excluding those leases, the remaining leases expiring in 2025, which represent approximately 25,000 square feet of the Centers, are in the prospecting stage.
The Company has entered into 103 leases for new stores totaling approximately 524,000 square feet that have opened or are planned for opening in 2025, and another 107 leases for new stores totaling approximately 1.3 million square feet opening after 2025. In total, through 2028, new store leases are expected to produce total gross revenue of approximately $99 million (at the Company's pro rata share) in excess of the revenue generated in 2024 from prior uses in those same spaces. This new store leasing pipeline represents a cumulative and incremental estimate and includes open stores, leases signed not yet open, and leases in documentation that will or have commenced from 2024 through 2028. While there may be additional new space openings in 2025, any such leases are not yet executed.
During the quarter ended September 30, 2025, the Company signed 86 new leases and 193 renewal leases comprising approximately 1.5 million square feet of GLA. The average tenant allowance was $49.58 per square foot.
Outlook
During the second quarter of 2024, the Company unveiled the Path Forward Plan which is a multi-pronged strategy to improve the Company's balance sheet, while also making inward-facing enhancements to both bolster company culture and improve key business processes to gain operating efficiencies. Essential goals of the Path Forward Plan include:
•Deleverage the capital structure, with a focus on reducing the Company's Net Debt to Adjusted EBITDA leverage ratio over the next three to four years;
•Invest in and fortify the Company's key assets in the portfolio;
•Proactively consolidate selected joint venture assets over time that are core to the Company's overall strategy;
•Deliver a post-deleveraging Funds From Operations ("FFO") launch point goal over the next three to four years;
•Achieve outstanding operational results through rigorous internal process improvements; and
•Position the Company to take an offensive stance on acquisitions, reinvestment and selected development.
The Company may achieve these goals through a variety of methods and the timing, extent and impact of any transactions that the Company has or will undertake while implementing the Path Forward Plan may vary and evolve. In order to deleverage its capital structure, the Company may pursue asset dispositions and acquisitions, experience organic growth in EBITDA as tenants in its lease pipeline open for business, be selective about undertaking new development and redevelopment projects, and/or issue common stock. Asset sales will focus on whether a property is core to the Company's strategy and may include defaulting on certain mortgage debts on the Company's properties and giving possession of such secured properties to the lender. Additionally, as part of the Path Forward Plan, the Company is targeting for disposition certain outparcels, freestanding retail assets, non-enclosed mall assets and vacant land. The Company also began acquiring properties in June 2025 with the acquisition of Crabtree Mall and will continue to look for other strategic acquisition opportunities that would compliment the Company's portfolio.
In May 2025, as a further update to the Company's Path Forward Plan and to provide a strategic disposition plan that refines the portfolio and creates a more focused platform for growth, the Company identified the following Centers as the go-forward portfolio Centers (the "Go-Forward Portfolio Centers"). The Go-Forward Portfolio Centers are subject to change.
| Arrowhead Towne Center (a) | Kierland Commons (b) | ||||||||||
| Broadway Plaza (b) | Kings Plaza Shopping Center (a) | ||||||||||
| Chandler Fashion Center (b) | Los Cerritos Center (a) | ||||||||||
| Corte Madera, The Village at (b) | NorthPark Mall (a) | ||||||||||
| Crabtree Mall (a) | Pacific View (a) | ||||||||||
| Danbury Fair Mall (a) | Queens Center (a) | ||||||||||
| Deptford Mall (b) | SanTan Village Regional Center (a) | ||||||||||
| Desert Sky Mall (a) | Scottsdale Fashion Square (b) | ||||||||||
| Eastland Mall (a) | South Plains Mall (a) | ||||||||||
| Fashion District Philadelphia (a) | Stonewood Center (a) | ||||||||||
| Fashion Outlets of Chicago (a) | Superstition Springs Center (a) | ||||||||||
| Flatiron Crossing (b) | Tysons Corner Center (b) | ||||||||||
| Freehold Raceway Mall (a) | Valley River Center (a) | ||||||||||
| Fresno Fashion Fair (a) | Victor Valley, Mall of (a) | ||||||||||
| Green Acres Mall (a) | Vintage Faire Mall (a) | ||||||||||
| Inland Center (a) | Washington Square (a) | ||||||||||
| (a) Included in Consolidated Centers | |||||||||||
| (b) Included in Unconsolidated Joint Venture Centers | |||||||||||
Further, the Company has a long-term four-pronged business strategy that focuses on the acquisition, leasing and management, redevelopment and development of regional retail centers. Although some of the key performance indicators at
the Centers continued to improve during 2024 and the first three quarters of 2025, including a strong start to 2025 leasing volume and leasing spreads, operating results in 2025 have been and are expected to continue to be negatively impacted by certain external factors, including sustained inflation, tariffs and elevated interest rates, as well as the impact from the bankruptcies of Express, Forever 21 and Claire's and any future tenant bankruptcies.
Traffic levels at the Company's Centers for the first three quarters of 2025 increased by 0.1% from 2024 levels for the same time period. Portfolio tenant sales per square foot from spaces less than 10,000 square feet for the trailing twelve months ended September 30, 2025 were $867 compared to $837 for the year ended December 31, 2024. Comparable tenant sales from spaces less than 10,000 square feet across the portfolio for the quarter ended September 30, 2025 increased by 3.1% compared to the same period in 2024.
During the first three quarters of 2025, the Company signed 888 leases for approximately 5.4 million square feet, compared to 621 leases and 2.9 million square feet leased during the same period in 2024, representing an 85% increase in the amount of square footage leased and a 43% increase in the number of leases signed on a comparable center basis.
The Company believes that diversity of use within its tenant base has been, and will continue to be, a prominent internal growth catalyst at its Centers going forward, as new uses enhance the productivity and diversity of the tenant mix and have the potential to significantly increase customer traffic at the applicable Centers. During the quarter ended September 30, 2025, the Company signed leases for new stores with new-to-Macerich portfolio uses for 99,000 square feet, with another 346,000 square feet of such new-to-Macerich portfolio leases currently in negotiation as of the date of this Quarterly Report on Form 10-Q.
As of September 30, 2025, the leased occupancy rate was 93.4%, a 0.3% decrease compared to the leased occupancy rate at September 30, 2024 of 93.7% and a 1.4% sequential increase compared to the 92.0% occupancy rate at June 30, 2025.
Many of the Company's leases contain co-tenancy clauses. Certain Anchor or small tenant closures have become vacant, and co-tenancy clauses within certain leases may be triggered as a result. The Company does not anticipate that the negative impact of such clauses on lease revenue will be significant.
The pace of bankruptcy filings involving the Company's tenants has remained steady in recent years but is substantially lower than 2021 levels. For the year ended December 31, 2024, there were 13 bankruptcy filings involving the Company's tenants, including the bankruptcy of Express, totaling 54 leases and representing approximately 369,000 square feet of leased space and $21.7 million of annual leasing revenue at the Company's share. Year-to-date 2025, there were seven bankruptcy filings involving the Company's tenants, including the bankruptcies of Forever 21 and Claire's, totaling 66 leases and representing approximately 873,000 square feet of leased space and approximately $12.8 million of annual leasing revenue at the Company's share. Based on current information and market data, the Company expects that the pace of bankruptcy filings in 2025 will be lower than the average bankruptcy rate over the last decade but the Company will continue to monitor the impact of tariffs and other economic conditions on the Company's tenants.
During 2025, the Company expects to generate positive cash flow after recurring operating capital expenditures, leasing capital expenditures and payment of dividends. This assumption does not include any potential capital generated from dispositions, refinancings or issuances of common stock. To the extent available, any excess cash flow may be used to fund the Company's development and redevelopment pipeline and/or de-lever the Company's balance sheet.
The Company continues to actively address its near-term, non-recourse loan maturities, with ten completed transactions from the beginning of 2024 through the first three quarters of 2025, totaling approximately $1.9 billion, or approximately $1.7 billion at the Company's pro rata share. For additional information on the Company's financing transactions in the year ended 2024 through the date of this Quarterly Report on Form 10-Q, see "Financing Activities" in Management's Overview and Summary.
On April 9, 2024, the Company defaulted on the $300.0 million non-recourse loan on Santa Monica Place and during the first quarter of 2025, completed the transition of the property to a receiver. The Company is still the owner of record of the property.
Interest rates have increased, and may continue to increase, the cost of the Company's borrowings due to its outstanding floating-rate debt and have led, and may continue to lead, to higher interest rates on new fixed-rate debt. While interest rates have begun to decrease, they remain elevated and the Company expects to incur increased interest expense from the refinancing or extension of loans that may currently carry below-market interest rates. In certain cases, the Company has limited, and may continue to limit, its exposure to interest rate fluctuations related to a portion of its floating-rate debt by using interest rate cap and swap agreements. Such agreements, subject to current market conditions, allow the Company to replace floating-rate debt with fixed-rate debt in order to achieve its desired ratio of floating-rate to fixed-rate debt. However, any interest rate cap or swap agreements that the Company enters into may not be effective in reducing its exposure to interest rate changes.
Comparison of Three Months Ended September 30, 2025 and 2024
Revenues:
Leasing revenue increased by $33.8 million, or 16.6%, from 2024 to 2025. The increase in leasing revenue is attributed to increases of $30.6 million from the JV Transition Centers and $11.0 million from the Acquisition Property offset in part by decreases of $4.8 million from the Disposition Properties and $2.1 million from the Same Centers. Leasing revenue includes the amortization of above and below-market leases, the amortization of straight-line rents, lease termination income, percentage rent and the recovery of bad debts. The amortization of above and below-market leases was $0.7 million for both 2024 and 2025. The amortization of straight-line rents increased from $1.1 million in 2024 to $2.2 million in 2025. Lease termination income increased from $0.2 million in 2024 to $0.8 million in 2025. Percentage rent increased from $6.2 million in 2024 to $6.9 million in 2025. Provisions for bad debts increased from $0.1 million in 2024 to $1.0 million in 2025.
Shopping Center and Operating Expenses:
Shopping center and operating expenses increased $4.6 million, or 6.2%, from 2024 to 2025. The increase in shopping center and operating expenses is attributed to increases of $6.6 million from the JV Transition Centers and $2.8 million from the Acquisition Property offset in part by a decreases of $3.2 million from the Disposition Properties and $2.2 million from the Same Centers.
Management Companies' Operating Expenses:
Management Companies' operating expenses increased $1.3 million from 2024 to 2025 due to an increase in compensation expense, including employee severance costs of $0.2 million.
Depreciation and Amortization:
Depreciation and amortization increased $17.6 million from 2024 to 2025. The increase in depreciation and amortization is attributed to an increase of $10.6 million from the JV Transition Centers, $6.8 million from the Acquisition Property and $1.0 million from the Same Centers offset in part by a decrease of $2.2 million from the Disposition Properties. Additionally, $1.4 million of the increase is attributable to Santa Monica Place.
Interest Expense:
Interest expense increased $15.6 million from 2024 to 2025. The increase in interest expense is attributed to increases of $11.0 million from the JV Transition Centers, $3.2 million from the Same Centers, $0.3 million from the Disposition Properties and $1.8 million from the Acquisition Property offset in part by a decrease of $0.9 million from lower outstanding balances on the Company's revolving credit facility.
Equity in Income (Loss) of Unconsolidated Joint Ventures:
Equity in income (loss) of unconsolidated joint ventures increased $84.7 million from 2024 to 2025. The increase in equity in income (loss) of unconsolidated joint ventures is primarily due to impairment losses of $67.0 million recognized in 2024 as a result of the reduction in the estimated holding period of properties held by certain unconsolidated joint ventures and a gain of approximately $12.0 million from the sale of Atlas Park in 2025 (See Note 4-Investments in Unconsolidated Joint Ventures in the Notes to the Consolidated Financial Statements).
Loss on Sale or Write Down of Assets, net:
Loss on sale or write down of assets, net increased $56.0 million from 2024 to 2025 primarily due to the impairment loss of $91.0 million at Santa Monica Place and the gain of $21.1 million from the sale of Lakewood Center in 2025 offset in part by the $42.8 million gain from the sale of the Company's ownership interest in Biltmore Fashion Park and impairment losses of $67.0 million in 2024 (See Note 6-Property, net in the Notes to the Consolidated Financial Statements).
Net Loss:
Net loss decreased $22.1 million from 2024 to 2025. The decrease in net loss is primarily due to the increase in equity in income (loss) of unconsolidated joint ventures offset in part by the increase in loss on sale or write down of assets, net as discussed above.
Funds From Operations ("FFO"):
Primarily as a result of the factors mentioned above, FFO attributable to common stockholders and unit holders-diluted, excluding financing expense in connection with Chandler Freehold, accrued default interest expense and loss on non-real estate investments increased from $86.0 millionin 2024 to $93.4 millionin 2025. For a reconciliation of net loss attributable to the
Company, the most directly comparable GAAP financial measure, to FFO attributable to common stockholders and unit holders-diluted, and FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold, accrued default interest expense and loss on non-real estate investments-diluted, see "Funds From Operations ("FFO")" below.
Comparison of Nine Months Ended September 30, 2025 and 2024
Revenues:
Leasing revenue increased by $112.5 million, or 19.0%, from 2024 to 2025. The increase in leasing revenue is attributed to increases of $96.2 million from the JV Transition Centers, $8.6 million from the Same Centers and $12.0 million from the Acquisition Property offset in part by decreases of $0.9 million from the Disposition Properties and $3.4 million from Santa Monica Place. Leasing revenue includes the amortization of above and below-market leases, the amortization of straight-line rents, lease termination income, percentage rent and the recovery of bad debts. The amortization of above and below-market leases increased from $3.2 million in 2024 to $3.7 million in 2025. Straight-line rents increased from $(2.6) million in 2024 to $2.7 million in 2025. Lease termination income increased from $1.4 million in 2024 to $6.3 million in 2025. Percentage rent increased from $11.7 million in 2024 to $15.3 million in 2025. Provisions for bad debts decreased from $4.6 million in 2024 to $3.3 million in 2025.
Management Companies' revenue decreased 26.4% from $22.1 million in 2024 to $16.3 million in 2025 primarily due to a decrease in management fees from the JV Transition Centers.
Shopping Center and Operating Expenses:
Shopping center and operating expenses increased $25.0 million, or 11.4%, from 2024 to 2025. The increase in shopping center and operating expenses is attributed to an increase of $5.9 million from the Same Centers, which is primarily due to increased property taxes, maintenance and utilities costs, $18.6 million from the JV Transition Centers and $3.0 million from the Acquisition Property offset in part by a decrease of $3.5 million from the Disposition Properties.
Leasing Expenses:
Leasing expenses increased from $30.0 million in 2024 to $32.5 million in 2025 due primarily to an increase in compensation expense.
Management Companies' Operating Expenses:
Management Companies' operating expenses increased $5.3 million from 2024 to 2025 due primarily to an increase in compensation expense, including employee severance costs increase of $1.6 million.
Depreciation and Amortization:
Depreciation and amortization increased $58.6 million from 2024 to 2025. The increase in depreciation and amortization is attributed to increases of $45.3 million from the JV Transition Centers, $5.8 million from the Same Centers and $7.5 million from the Acquisition Property offset in part by a decrease of $1.3 million from the Disposition Properties. Additionally, $1.3 million of the increase is attributable to Santa Monica Place.
Interest Expense:
Interest expense increased $64.6 million from 2024 to 2025. The increase in interest expense is attributed to increases of $38.2 million from the JV Transition Centers, $11.3 million from the financing arrangement discussed in Note 12 in the Company's Notes to the Consolidated Financial Statements, $8.7 million from the Same Centers, $7.8 million from the Disposition Properties and $1.8 million from the Acquisition Property offset in part by a decrease of $6.7 million from lower outstanding balances on the Company's revolving credit facility. Additionally, $3.5 million of the increase is attributable to Santa Monica Place, which includes default interest expense of $9.1 million. The increase in interest expense from the financing arrangement is primarily due to the change in fair value of the underlying properties and the mortgage notes payable on the underlying properties and Chandler Fashion Center no longer being accounted for as a financing arrangement (See Note 12-Financing Arrangement in the Notes to the Consolidated Financial Statements).
Equity in Income (Loss) of Unconsolidated Joint Ventures:
Equity in income (loss) of unconsolidated joint ventures increased $213.5 million from 2024 to 2025. The increase in equity in income (loss) of unconsolidated joint ventures is primarily due to the write-down of the Company's investment in Los Angeles Premium Outlets of $57.7 million during the first quarter of 2024 and impairment losses of $120.6 million recognized in 2024 as a result of the reduction in the estimated holding period of properties held by certain unconsolidated joint ventures.
(Loss) Gain on Sale or Write Down of Assets, net:
(Loss) gain on sale or write down of assets, net increased $369.4 million from 2024 to 2025. The increase is primarily due to the gains recognized in 2024 of $334.3 million relating to the Company no longer accounting for its investment in Chandler Fashion Center as a financing arrangement (See Note 12-Financing Arrangement and Note 16-Dispositions in the Company's Notes to the Consolidated Financial Statements) and $42.8 million from the sale of the Company's ownership interest in Biltmore Fashion Park offset in part by $21.1 million gain recognized from the sale of Lakewood Center in 2025 (See Note 6-Property, net in the Notes to the Consolidated Financial Statements).
Net (Loss) Income:
Net (loss) income decreased $204.6 million from 2024 to 2025. The decrease in net (loss) income is primarily due to the gains recognized in 2024 of $334.3 million relating to Chandler Fashion Center along with the other variances noted above.
Funds From Operations ("FFO"):
Primarily as a result of the factors mentioned above, FFO attributable to common stockholders and unit holders-diluted, excluding financing expense in connection with Chandler Freehold, accrued default interest expense and loss on non-real estate investments increased 7.8% from $248.7 million in 2024 to $268.1 millionin 2025. For a reconciliation of net (loss) income attributable to the Company, the most directly comparable GAAP financial measure, to FFO attributable to common stockholders and unit holders-diluted, and FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold, accrued default interest expense and loss on non-real estate investments-diluted, see "Funds From Operations ("FFO")" below.
Operating Activities:
Cash provided by operating activities increased $42.8 million from 2024 to 2025. The increase is primarily due to the changes in assets and liabilities and the results, as discussed above.
Investing Activities:
Cash used in investing activities increased $300.8 million from 2024 to 2025. The increase in cash used in investing activities is primarily attributed to increases in acquisitions of property of $225.1 million and contributions to unconsolidated joint ventures of $98.2 million. The increase in acquisitions of property is due to the acquisition of Crabtree Mall (See "Acquisitions" in Management's Overview and Summary). The increase in contributions to unconsolidated joint ventures is primarily due to contributions to Flatiron Crossing in 2025 to payoff the remaining loan balance (See "Financing Activities" in Management's Overview and Summary).
Financing Activities:
Cash provided by (used in) financing activities increased $421.4 million from 2024 to 2025. The increase in cash provided by (used in) financing activities is primarily due to a decrease in payments on mortgages, bank and other notes payable of $341.6 million and an increase in proceeds from mortgages, bank and other notes payable of $199.1 million offset in part by a decrease in proceeds from stock offering of $100.1 million and an increase in dividends and distributions of $22.0 million.
Liquidity and Capital Resources
The Company anticipates meeting its liquidity needs for its operating expenses, debt service and dividend requirements for the next twelve months and beyond through cash generated from operations, distributions from unconsolidated joint ventures, working capital reserves and/or borrowings under its revolving credit facility.
Additionally, the Company is focused on implementing the Path Forward Plan, including its goal to reduce its Net Debt to Adjusted EBITDA leverage ratio to a lower level over the next three to four years. The Company may achieve this goal, and other goals set in connection with the Path Forward Plan, through a variety of methods and the timing, extent and impact of any transactions that the Company has or will undertake while implementing the Path Forward Plan may vary and evolve. In order to de-leverage its capital structure, the Company may pursue asset dispositions and acquisitions, experience organic growth in EBITDA as tenants in its lease pipeline open for business, be selective about undertaking new development and redevelopment projects, and/or issue common stock. Asset sales will focus on whether a property is core to the Company's strategy and may include defaulting on certain mortgage debts on the Company's properties and giving possession of such secured properties to the lender.
Uses of Capital
The following tables summarize capital expenditures incurred at the Centers (at the Company's pro rata share):
| For the Nine Months Ended September 30, | |||||||||||
| (Dollars in thousands) | 2025 | 2024 | |||||||||
| Consolidated Centers: | |||||||||||
| Acquisition of property(1) | $ | 290,000 | $ | 41,829 | |||||||
| Property improvements | 15,761 | 27,776 | |||||||||
| Development, redevelopment, expansions and renovations of Centers | 74,807 | 66,924 | |||||||||
| Tenant allowances | 19,422 | 12,655 | |||||||||
| Deferred leasing charges | 3,289 | 3,308 | |||||||||
| $ | 403,279 | $ | 152,492 | ||||||||
| Unconsolidated Joint Venture Centers: | |||||||||||
| Property improvements | $ | 4,989 | $ | 9,814 | |||||||
| Development, redevelopment, expansions and renovations of Centers | 52,804 | 27,433 | |||||||||
| Tenant allowances | 11,558 | 12,841 | |||||||||
| Deferred leasing charges | 2,933 | 3,753 | |||||||||
| $ | 72,284 | $ | 53,841 | ||||||||
(1) For the nine months ended September 30, 2025, this includes the $290.0 million acquisition of Crabtree Mall, excluding closing adjustments and other related transaction costs. For the nine months ended September 30, 2024, this includes the cash paid of $36.4 million on May 14, 2024, for the Company's acquisition of its joint venture partner's 40% interest in Arrowhead Towne Center and South Plains Mall. The total purchase price also included the assumption of the partner's share of debt. The Company now owns 100% of these regional retail centers (See Note 15-Acquisitions in the Notes to the Consolidated Financial Statements).
The Company expects amounts to be incurred during the next twelve months for tenant allowances and deferred leasing charges to be approximately $50.0 million to $75.0 million. The Company expects to incur approximately $250.0 million to $300.0 million during the next twelve months for development, redevelopment, expansion and renovations, which includes Scottsdale Fashion Square, Green Acres Mall and FlatIron Crossing (See "Redevelopment and Development Activities" in Management's Overview and Summary). Capital for these expenditures, developments and/or redevelopments has been, and is expected to continue to be, obtained from a combination of cash on hand, cash generated from operations, asset sales, debt or equity financings, which may include borrowings under the Company's revolving loan facility and sales of common stock, from property financings and construction loans, each to the extent available. The Company will be very selective in undertaking any future development or redevelopment projects and may choose to pause existing projects if the Company believes they are no longer economically viable.
Sources of Capital
The Company has also generated liquidity in the past, and may continue to do so in the future, through equity offerings and issuances, property refinancings, joint venture transactions and the sale of non-core assets. Asset sales will focus on whether a property is core to the Company's strategy and may include defaulting on certain mortgage debts on the Company's properties and giving possession of such secured properties to the lender. Since implementing the Path Forward Plan in the second quarter of 2024, the Company has sold joint venture interests in properties and consolidated properties as described in "-Dispositions" in Management's Overview and Summary. The Company used its share of proceeds from these transactions to pay down its revolving credit facility and other debt obligations. During the nine months ended September 30, 2025 and the year ended December 31, 2024, the Company and certain joint venture partners sold various land parcels in separate transactions for aggregate proceeds of $14.3 million and $6.1 million (at the Company's share), respectively, which the Company used to pay down debt and for other general corporate purposes.
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, stock purchase contracts and units that may be sold from time to time by the Company.
On November 27, 2024, the Company completed a public offering of 23.0 million shares of its common stock at a price per share of $19.75, which includes the underwriters' full exercise of their option to purchase an additional 3.0 million shares, for gross proceeds of approximately $454.3 million. The net proceeds of the offering were approximately $439.5 million after
deducting the underwriting discount and offering costs of approximately $14.8 million. The Company used the proceeds from the offering, together with cash on hand, to repay the mortgage loan secured by its Washington Square property.
On each of March 26, 2021 and November 12, 2024, the Company registered separate "at the market" offering programs, pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $500.0 million under each of the 2021 ATM Program and the 2024 ATM Program, in each case, in amounts and at times to be determined by the Company. The 2021 ATM Program was fully utilized as of September 30, 2024 and is no longer active. During the three months ended September 30, 2025, the Company issued shares of common stock under the 2024 ATM Program. The following table sets forth certain information with respect to issuances made under the 2024 ATM Program as of September 30, 2025.
| (Dollars and shares in thousands) | 2024 ATM Program(1) | ||||||||||
| For the Three Months Ended: | Number of Shares Issued | Net Proceeds | Sales Commissions | ||||||||
| September 30, 2025 | 2,783 | $ | 49,044 | $ | 1,004 | ||||||
| Total | 2,783 | $ | 49,044 | $ | 1,004 | ||||||
(1) The table does not reflect shares sold at the end of the quarter that did not settle until October 2025 (See Note 14-Stockholders' Equity).
As of September 30, 2025, including sales of common stock that did not settle until October 2025, the Company had approximately $378.4 million of gross sales of its common stock available under the 2024 ATM Program.
The capital and credit markets can fluctuate and, at times, limit access to debt and equity financing for companies. The Company has been able to access capital; however, there is no assurance the Company will be able to do so in future periods or on similar terms and conditions. Many factors impact the Company's ability to access capital, such as its overall debt level, interest rates, interest coverage ratios and prevailing market conditions, including periods of economic slowdown or recession.
For example, the credit markets have experienced and may continue to experience a slowdown stemming from broader market issues pertaining to various factors, including among others, the health of regional banks, prevailing market sentiment regarding various commercial real estate sectors and interest rate increases imposed by the Federal Reserve. While interest rates have begun to decrease, they remain elevated and the Company expects to incur increased interest expense from the refinancing or extension of loans that may carry below-market interest rates. In addition, increases in the Company's proportion of floating rate debt will cause it to be subject to interest rate fluctuations in the future.
The Company's total outstanding loan indebtedness, which includes mortgages and other notes payable, at September 30, 2025 was $6.60 billion (consisting of $5.08 billion of consolidated debt, less $0.03 billion of noncontrolling interests, plus $1.56 billion of its pro rata share of unconsolidated joint venture debt). The majority of the Company's debt consists of fixed-rate conventional mortgage notes collateralized by individual properties. The Company expects that all of the maturities during the next twelve months will be refinanced, restructured, extended and/or paid off from the Company's revolving credit facility or cash on hand, with the exception of Santa Monica Place (See "-Financing Activities" in Management's Overview and Summary). The Company expects that the $198.9 million mortgage loan on South Plains Mall will be in technical default as of November 6, 2025, as the Company continues negotiations with the lender on the terms of the loan.
The Company believes that the pro rata debt provides useful information to investors regarding its financial condition because it includes the Company's share of debt from unconsolidated joint ventures and, for consolidated debt, excludes the Company's partners' share from consolidated joint ventures, in each case presented on the same basis. The Company has several significant joint ventures and presenting its pro rata share of debt in this manner can help investors better understand the Company's financial condition after taking into account the Company's economic interest in these joint ventures. The Company's pro rata share of debt should not be considered as a substitute for the Company's total consolidated debt determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Company's financial information prepared in accordance with GAAP.
The Company accounts for its investments in joint ventures that it does not have a controlling interest or is not the primary beneficiary using the equity method of accounting and those investments are reflected on the consolidated balance sheets of the Company as investments in unconsolidated joint ventures.
Additionally, as of September 30, 2025, the Company was contingently liable for $6.5 million in letters of credit guaranteeing performance by the Company of certain obligations relating to the Centers. As of September 30, 2025, $5.9 million of these letters of credit were secured by restricted cash. The Company does not believe that these letters of credit will result in a liability to the Company.
The Company continues to actively address its near-term, non-recourse loan maturities, with ten completed transactions from the beginning of 2024 through the first three quarters of 2025 totaling approximately $1.9 billion, or approximately $1.7 billion at the Company's pro rata share. For additional information on the Company's financing transactions in the year ended 2024 through the date of this Quarterly Report on Form 10-Q, see "Financing Activities" in Management's Overview and Summary.
On September 11, 2023, the Company and the Operating Partnership entered into an amended and restated credit agreement, which amended and restated their prior credit agreement, and provides for an aggregate $650.0 million revolving credit facility that matures on February 1, 2027, with a one-year extension option. The revolving credit facility can be expanded up to $950.0 million, subject to receipt of lender commitments and other conditions. All obligations under the revolving credit facility are guaranteed unconditionally by the Company and are secured in the form of mortgages on certain wholly-owned assets and pledges of equity interests held by certain of the Company's subsidiaries. The revolving credit facility bears interest, at the Operating Partnership's option, at either the base rate (as defined in the credit agreement) or adjusted term SOFR (as defined in the credit agreement) plus, in both cases, an applicable margin. The applicable margin depends on the Company's overall leverage ratio and ranges from 1.00% to 2.50% over the selected index rate. As of September 30, 2025, the borrowing rate was SOFR plus a spread of 2.10%. As of September 30, 2025, there were no borrowings under the revolving credit facility. Unamortized deferred finance costs were $8.8 million as of September 30, 2025, which are netted against balances outstanding or within deferred charges and other assets, net when no borrowings are outstanding on the revolving credit facility, which was the case as of September 30, 2025. As of September 30, 2025, the Company's availability under the revolving credit facility for additional borrowings was $649.4 million.
Cash dividends and distributions for the nine months ended September 30, 2025 were $142.0 million (including distributions from consolidated joint ventures of $4.1 million), which were funded by operations.
At September 30, 2025, the Company was in compliance with all applicable loan covenants under its agreements.
At September 30, 2025, the Company had cash and cash equivalents of $290.2 million.
Material Cash Commitments:
The following is a schedule of material cash commitments as of September 30, 2025 for the Consolidated Centers over the periods in which they are expected to be paid (in thousands):
| Payment Due by Period | |||||||||||||||||||||||||||||
| Cash Commitments | Total |
Less than 1 year |
1 - 3 years |
3 - 5 years |
More than five years |
||||||||||||||||||||||||
| Long-term debt obligations (includes expected interest payments)(1) | $ | 6,053,668 | $ | 967,229 | (3) | $ | 1,986,057 | $ | 1,998,961 | $ | 1,101,421 | ||||||||||||||||||
| Lease obligations(2) | 119,993 | 3,224 | 24,347 | 16,014 | 76,408 | ||||||||||||||||||||||||
| $ | 6,173,661 | $ | 970,453 | $ | 2,010,404 | $ | 2,014,975 | $ | 1,177,829 | ||||||||||||||||||||
__________________________________________________________
(1)Interest payments on floating rate debt were based on rates in effect at September 30, 2025.
(2)See Note 8-Leases in the Company's Notes to the Consolidated Financial Statements.
(3)Includes the $300.0 million non-recourse loan on Santa Monica Place which the Company defaulted on in April 9, 2024. The Company is still the owner of record of the property.
Funds From Operations ("FFO")
The Company uses FFO in addition to net loss to report its operating and financial results and considers FFO and FFO -diluted as supplemental measures for the real estate industry and a supplement to GAAP measures. The National Association of Real Estate Investment Trusts defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of properties, plus real estate related depreciation and amortization, impairment write-downs of real estate and write-downs of investments in an affiliate where the write-downs have been driven by a decrease in the value of real estate held by the affiliate and after adjustments for unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis.
Prior to June 13, 2024, the Company accounted for its joint venture in Chandler Freehold as a financing arrangement. In connection with this treatment, the Company recognized financing expense on (i) the changes in fair value of the financing arrangement obligation, (ii) any payments to the joint venture partner equal to their pro rata share of net income and (iii) any payments to the joint venture partner less than or in excess of their pro rata share of net income. The Company excludes from its definition of FFO the noted expenses related to the changes in fair value and for the payments to the joint venture partner less than or in excess of their pro rata share of net income. On November 16, 2023, the Company acquired its joint venture partner's 49.9% ownership interest in Freehold Raceway Mall and as a result, this property is no longer part of the financing arrangement and is 100% owned by the Company. On June 13, 2024, the partnership agreement between the Company and its partner was amended. As a result, the Company no longer accounts for its investment in Chandler Fashion Center as a financing arrangement. Effective June 13, 2024, the Company accounts for its investment in Chandler Fashion Center under the equity method of accounting (See Note 12 - Financing Arrangement and Note 16 - Dispositions in the Notes to the Consolidated Financial Statements). References to Chandler Freehold for the period November 16, 2023 through June 13, 2024 shall be deemed to only refer to Chandler Fashion Center.
The Company also presents FFO excluding financing expense in connection with Chandler Freehold, gain or loss on extinguishment of debt, accrued default interest expense and gain or loss on non-real estate investments.
FFO and FFO on a diluted basis are useful to investors in comparing operating and financial results between periods. This is especially true since FFO excludes real estate depreciation and amortization, as the Company believes real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time. The Company believes that such a presentation also provides investors with a more meaningful measure of its operating results in comparison to the operating results of other REITs. In addition, the Company believes that FFO excluding financing expense in connection with Chandler Freehold, impact associated with extinguishment of debt, accrued default interest expense and impact of non-cash changes in the market value of non-real estate investments provides useful supplemental information regarding the Company's performance as it shows a more meaningful and consistent comparison of the Company's operating performance and allows investors to more easily compare the Company's results. On March 19, 2024, the Company closed on a three-year extension of the Fashion Outlets of Niagara Falls non-recourse loan and all default interest expense was reversed. Effective April 9, 2024, default interest expense has been accrued on the non-recourse loan on Santa Monica Place. GAAP requires that the Company accrue default interest expense, which is not expected to be paid and is expected to be reversed once a loan is modified or once title to the mortgaged loan collateral is transferred. The Company believes that the accrual of default interest on non-recourse loans, and the related reversal thereof should be excluded. The Company holds certain non-real estate investments that are subject to mark to market changes every quarter. These investments are not core to the Company's business, and the changes to market value and the related gain or loss are entirely non-cash in nature. As a result, the Company believes that the gain or loss on non-real estate investments should be excluded.
The Company believes that FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income (loss) as defined by GAAP, and is not indicative of cash available to fund all cash flow needs. The Company also cautions that FFO, as presented, may not be comparable to similarly titled measures reported by other real estate investment trusts.
Management compensates for the limitations of FFO by providing investors with financial statements prepared according to GAAP, along with this detailed discussion of FFO and a reconciliation of net loss to FFO and FFO-diluted. Management believes that to further understand the Company's performance, FFO should be compared with the Company's reported net loss and considered in addition to cash flows in accordance with GAAP, as presented in the Company's consolidated financial statements. The following reconciles net loss attributable to the Company to FFO attributable to common stockholders and unit holders-basic and dilutedand FFO attributable to common stockholders and unit holders-basic and diluted, excluding financing expense in connection with Chandler Freehold, accrued default interest expense and loss on non-real estate investments for the three and nine months ended September 30, 2025 and 2024 (dollars and shares in thousands):
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Net (loss) income attributable to the Company | $ | (87,360) | $ | (108,189) | $ | (178,389) | $ | 17,090 | ||||||||||||||||||
| Adjustments to reconcile net (loss) income attributable to the Company to FFO attributable to common stockholders and unit holders-basic and diluted: | ||||||||||||||||||||||||||
| Noncontrolling interests in the Operating Partnership | (3,695) | (5,056) | (7,609) | 791 | ||||||||||||||||||||||
| Loss (gain) on sale or write down of assets, net-consolidated assets | 72,634 | 16,605 | 97,106 | (272,306) | ||||||||||||||||||||||
| Add: noncontrolling interests share of gain on sale or write down of assets-consolidated assets | - | - | - | 330 | ||||||||||||||||||||||
| Add: gain on sale of undepreciated assets-consolidated assets | 1,229 | 222 | 2,309 | 455 | ||||||||||||||||||||||
| (Gain) loss on sale or write down of assets-unconsolidated joint ventures, net(1) | (11,939) | 66,969 | (9,880) | 176,150 | ||||||||||||||||||||||
| Add: gain (loss) on sale of undepreciated assets-unconsolidated joint ventures(1) | - | 53 | (291) | 1,129 | ||||||||||||||||||||||
| Depreciation and amortization-consolidated assets | 90,904 | 73,299 | 271,966 | 213,326 | ||||||||||||||||||||||
| Less: noncontrolling interests in depreciation and amortization-consolidated assets | (577) | (561) | (1,711) | (3,817) | ||||||||||||||||||||||
| Depreciation and amortization-unconsolidated joint ventures(1) | 28,858 | 39,524 | 85,377 | 119,531 | ||||||||||||||||||||||
| Less: depreciation on personal property | (1,463) | (1,641) | (5,337) | (5,209) | ||||||||||||||||||||||
| FFO attributable to common stockholders and unit holders-basic and diluted | 88,591 | 81,225 | 253,541 | 247,470 | ||||||||||||||||||||||
| Financing expense in connection with Chandler Freehold | - | - | - | (12,829) | ||||||||||||||||||||||
| Accrued default interest expense | 3,067 | 3,067 | 9,100 | 4,789 | ||||||||||||||||||||||
| Loss on non-real estate investments | 1,741 | 1,676 | 5,424 | 9,235 | ||||||||||||||||||||||
| FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold, accrued default interest expense and loss on non-real estate investments -basic and diluted | $ | 93,399 | $ | 85,968 | $ | 268,065 | $ | 248,665 | ||||||||||||||||||
| Weighted average number of FFO shares outstanding for: | ||||||||||||||||||||||||||
| FFO attributable to common stockholders and unit holders-basic(2) | 264,845 | 228,409 | 264,224 | 226,945 | ||||||||||||||||||||||
| Adjustments for impact of dilutive securities in computing FFO-diluted: | ||||||||||||||||||||||||||
| Share and unit based compensation plans | - | - | - | - | ||||||||||||||||||||||
| Weighted average number of FFO shares outstanding for FFO attributable to common stockholders and unit holders-basic and diluted(2) | 264,845 | 228,409 | 264,224 | 226,945 | ||||||||||||||||||||||
(1) Unconsolidated joint ventures are presented at the Company's pro rata share.
(2) Calculated based upon basic net income as adjusted to reach basic FFO. Includes 10.7 millionand 10.0 million of OP Units outstanding for the three months ended September 30, 2025 and 2024, respectively, and 10.8 million and 10.1 million of OP Units outstanding for the nine months ended September 30, 2025 and 2024, respectively.
The computation of FFO-diluted shares outstanding includes the effect of share and unit-based compensation plans using the treasury stock method. It also assumes the conversion of MACWH, LP common and preferred units to the extent that they are dilutive to the FFO-diluted computation.
The Macerich Company published this content on November 05, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 05, 2025 at 13:42 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]