Sign in

You're signed outSign in or to get full access.

MC

MACERICH CO (MAC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered higher total revenues but a GAAP net loss driven by asset sale/write-down accounting; adjusted FFO/share fell year over year as higher interest expense (including non‑cash marks) and severance weighed, while same‑center NOI was modestly negative ex‑lease terminations .
  • Balance sheet progress accelerated: equity raise repaid Washington Square’s 2026 loan, Queens Center was refinanced at 5.37%, liquidity stood at ~$683M, and net debt/EBITDA improved to just under 8x; management reiterated a path to low–mid‑6x over several years .
  • Operating KPIs remained resilient: portfolio occupancy improved to 94.1% (+60 bps YoY), re‑leasing spreads stayed positive, and TTM sales PSF edged up to $837; signed‑not‑open (SNO) pipeline implies $66M of incremental rent, with ~$27M expected to hit in 2025 .
  • Capital allocation under the Path Forward Plan continued: JV consolidations, dispositions (The Oaks, Southridge) and an under‑contract sale of Wilton Mall advanced toward a ~$2B disposition target, with management now “almost 60%” of the way there including planned outparcel monetizations into 2026/1H27 .
  • Dividend held at $0.17/share, supporting cash generation during the multi‑year repositioning and SNO ramp (payable Mar 18, 2025) .

What Went Well and What Went Wrong

  • What Went Well

    • Positive leasing momentum and SNO: 1.1M sq ft signed in Q4; SNO totals ~1.2M sq ft/104 leases and ~$66M incremental rent at share; management targets 4.0M sq ft annual leasing in 2025–26 to lift permanent occupancy and NOI by 2028 .
    • Balance sheet actions reduced risk: $454M equity offering repaid the high‑cost Washington Square loan; Queens Center refinanced at a fixed 5.37%; liquidity ~$683M at filing .
    • Process improvements: companywide leasing dashboard, 5‑year Argus plans, and unified team structures are increasing speed/visibility and prioritizing high‑value space, a “massive change in mindset” to drive long‑term NOI .

  • What Went Wrong

    • GAAP loss and lower adjusted FFO/share: Q4 diluted EPS was $(0.89) (vs $0.29 LY) and adjusted FFO/share (ex‑items) was $0.47 (vs $0.57 LY), with higher interest expense (including non‑cash debt mark amortization) and ~$5M severance pressure .
    • Same‑center NOI softness: Q4 same‑center NOI ex‑lease termination declined 0.36% YoY; management cautioned near‑term SSS NOI and FFO may be “roughly flat” as the mix shifts to more new deals with downtime before 2027–28 step‑ups .
    • Capex/leasing TIs skew near term: management flagged higher near‑term landlord work and TAs as mix tilts to new tenants in 2025–26, before normalizing in 2027–28; development timing (e.g., FlatIron) is a watch item .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Total Revenues ($MM)$215.5 $220.2 $273.7
Diluted EPS ($)$1.16 $(0.50) $(0.89)
FFO/share – basic & diluted ($)$0.44 $0.36 $0.51
FFO/share – ex Chandler Freehold, gain on extinguishment/default interest/non‑real‑estate investments ($)$0.39 $0.38 $0.47
Same‑center NOI growth YoY (ex LTI)1.32% 1.87% (0.36)%
Wall St. Consensus (FFO/share, EPS, Revenue)N/A (S&P Global consensus unavailable this cycle)N/A (S&P Global consensus unavailable)N/A (S&P Global consensus unavailable)

Segment/KPI detail

  • Leasing revenue mix – Company’s Total Share

    Component ($MM)Q2 2024Q3 2024Q4 2024
    Minimum Rents$195.3 $198.4 $211.8
    Percentage Rents$5.1 $10.3 $30.7
    Tenant Recoveries$81.6 $82.4 $84.5
    Other$7.9 $8.0 $14.3
    Bad Debt$(1.6) $0.6 $(1.8)
    Total Leasing Revenue$288.2 $299.7 $339.5

  • Portfolio KPIs

    KPIQ2 2024Q3 2024Q4 2024
    Portfolio Occupancy93.3% 93.7% 94.1%
    TTM Sales PSF – Total Centers$835 $834 $837
    Base Rent Re‑leasing Spreads (TTM, <10k sf)10.1% 11.9% 8.8%

Note: Q4 YoY EPS/FFO declines reflect non‑cash impacts (debt mark amortization), severance (~$5M), and interest expense, while Q4 percentage rent seasonality lifted leasing revenue mix .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQuarterly$0.17 (declared Oct 31, 2024, paid Dec 2024) $0.17 (payable Mar 18, 2025) Maintained
Leverage (Net Debt/EBITDA) TargetMulti‑yearLow–mid 6x over 3–4 yrs Low–mid 6x “over the next several years” Maintained (timing language broadened)
Dispositions Program2024–2027~$2B total (multi‑year) Almost 60% identified/underway including $500M outparcels by 2026/1H27 Progressed
SNO realized in 2025FY2025~$34M of $80M pipeline (Q3 view) ~$27M of $66M pipeline (Q4 view) Revised (mix/timing reset)

Management has not reinstated formal 2025 FFO/NOI guidance, citing plan execution variability; prior 2024 guidance remained withdrawn .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
DeleveragingPath to low–mid 6x over 3–4 yrs; leverage 8.48x at 6/30 and 8.23x at 9/30 Sub‑8x at YE; reiterated low–mid 6x target over several years Improving
DispositionsLine‑of‑sight to $1.0–$1.4B; The Oaks under contract; outparcels planned ~$800M done/identified; almost 60% of $2B target incl. $500M outparcels through 2026/1H27 Improving
Debt RefinancingChandler JV refi; Victor Valley refi planned; Queens refi targeted Queens Center refi at 5.37%; Washington Square loan fully repaid post‑equity Improving
Leasing & SNOSNO ~$71–80M; strong velocity; 1.7M sq ft signed by Q3 1.1M sq ft signed in Q4; SNO ~$66M, ~$27M to hit 2025; targeting 4.0M sq ft/yr 2025–26 Stable to Improving
Process/TechRollout of leasing CRM, 5‑yr Argus plans; team realignment Dashboard live; A–F space ranking and accountability across teams Improving
Consumer/TrafficSales flat; traffic +1–5%; mix shifting to essentials; holiday +3–3.5% outlook Sales PSF stable; traffic up ~2%; “replacement” cycle tailwind cited Stable
DevelopmentScottsdale (lux wing), Green Acres, FlatIron residential; Scottsdale Chanel announced Green Acres on track; some FlatIron timing risk; Scottsdale progressing Mixed

Management Commentary

  • “We are targeting an average of 4 million square feet of leasing in 2025 and 2026… with a higher percentage of new lease deals versus renewals… New deals typically involve more rental revenue downtime in range of 12 to 18 months.” — CEO Jackson Hsieh .
  • “This is a massive change in mindset… historically… focused on annual near‑term FFO targets.” — CEO on prioritizing long‑term NOI and re‑merchandising .
  • “Debt to EBITDA at year-end 2024 was slightly below 8x… strategy to further reduce leverage to the low to mid 6x range over the next several years.” — CFO Daniel Swanstrom .
  • “At the end of the fourth quarter, we had 104 leases signed for 1.2 million square feet… This pipeline of new store openings now accounts for $66 million of incremental rent, of which $27 million will be realized in 2025.” — EVP Leasing Doug Healey .

Q&A Highlights

  • Near‑term SSS NOI/FFO cadence: Management expects same‑store NOI to be “roughly flat” for the next couple of years as mix shifts to more new deals (downtime) before rising in 2027–28; investors should track leasing progress percentages rather than quarterly NOI .
  • Capex/TIs: Landlord work and TAs likely higher in 2025–26 given greater emphasis on new tenants; then moderating into 2027–28 .
  • Dispositions & outparcels: Almost 60% of $2B identified; $500M outparcels expected by 2026/1H27 at sub‑8% caps, balancing other sales to ~8% blended .
  • Densification/entitlements: At Los Cerritos (now wholly owned), management is maximizing residential entitlements and likely to sell land entitled versus self‑develop .
  • Occupancy & renewals: 84% of 2025 expirations already committed or LOI; bankruptcy pipeline is limited; watch list significantly smaller than 2019 .

Estimates Context

  • S&P Global (Capital IQ) consensus for Q4 2024 (revenue, EPS/FFO) was unavailable via our data connector at this time; as a result, we cannot quantify beats/misses versus Street for this quarter. We will update when access is restored.

Key Takeaways for Investors

  • Execution, not quarterly prints, drives near‑term narrative: management is intentionally trading near‑term NOI/FFO smoothness for higher future run‑rate via more new leasing and re‑merchandising of A/B/C‑rated spaces, with NOI step‑ups modeled for 2027–28 .
  • Balance sheet trajectory is a support: equity raise used for deleveraging, high‑cost loans repaid/refinanced (Queens 5.37%), liquidity ~$683M, leverage sub‑8x with a realistic path to low–mid‑6x over several years; refinancing markets for Class‑A retail remain open .
  • Leasing/SNO underpins 2025–2028: 104 SNO leases/1.2M sq ft and ~$66M incremental rent (>$27M in 2025) provide embedded growth; management targets 4.0M sq ft annual leasing in 2025–26 to lift permanent occupancy and pricing power .
  • Asset mix improving: JV buy‑ins of key “Fortress” assets (e.g., Los Cerritos, Washington Square) plus pruning of “Eddy” assets and outparcel monetizations simplify the portfolio and should aid growth and multiple over time .
  • Watch items: timing risk at FlatIron, higher near‑term capex/TIs, Santa Monica loan default (non‑recourse; title transfer negotiations ongoing), and macro sensitivity of tenant sales; nonetheless, tenant demand/traffic remain solid and renewals are well advanced .

Appendix: Additional Data Points

  • Q4 2024 highlights: Total revenues $273.7M; net loss attributable to MAC $(211.2)M; FFO (ex special items) $116.7M or $0.47/share; portfolio occupancy 94.1%; TTM sales PSF $837 .
  • Capital markets: $525M five‑year Queens Center refinance at fixed 5.37%; $478M Washington Square mortgage repaid with equity proceeds; liquidity ~$683M at filing date .
  • Dividend: $0.17/share (payable Mar 18, 2025; record Mar 4, 2025) .

Sources: MAC Q4 2024 8‑K Earnings Results & Supplemental (Form 8‑K, Feb 27, 2025) –; Q4 2024 Earnings Call Transcript (Feb 27, 2025) –; Q3 2024 and Q2 2024 8‑K supplements and call transcripts – – –; Dividend PR (Feb 14, 2025) .