Macerich Earnings Call Highlights Leasing Surge, Leverage Goals
Macerich Company ((MAC)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Macerich’s latest earnings call struck a cautiously optimistic tone, as management highlighted record leasing, a growing signed‑not‑open pipeline and accelerating portfolio re‑positioning, even as near‑term NOI growth, elevated leverage and a defaulted loan tempered enthusiasm. Investors heard a story of solid operational momentum with clear 2027–2028 upside, but one that still requires disciplined execution to fully translate into earnings power.
Record Leasing Volume Signals Strong Tenant Demand
Macerich reported a record 7.1 million square feet of new and renewal leases signed in 2025, an 85% jump versus 2024 that underscores robust retailer demand for its properties. Notably, about 30% of this total came from brand‑new leases, pointing to genuine expansion rather than simple lease rollovers.
Leasing Progress Running Ahead of Internal Plan
Management’s “leasing speedometer” reached 76% revenue completion, already above its 70% target for year‑end 2025 and tracking toward 85% by mid‑2026, suggesting leasing is running ahead of schedule. Of roughly 1,000 new targeted deals, about 650 are already open, executed or in documentation, leaving 350 uncommitted and representing 1.6 million square feet still to secure.
SNO Pipeline Sets Up Multi‑Year NOI Ramp
The signed‑not‑open pipeline now stands around $107 million, exceeding the company’s year‑end target and supporting a total cumulative SNO opportunity of about $140 million relative to 2024. Management expects this pipeline to translate into incremental annual NOI of roughly $30 million in 2026, $40–45 million in 2027 and $45–50 million in 2028.
Anchor Replacement Initiative Fully Locked In
All 30 of the company’s targeted anchor and big‑box replacements, totaling 2.9 million square feet, are now fully committed, marking a major de‑risking milestone for the portfolio. These new anchors are projected to drive approximately $750 million in annual tenant sales, which should boost traffic and support higher in‑line leasing over time.
Asset Sales Advance, More Dispositions to Come
Macerich has completed roughly $1.3 billion of mall and outparcel sales toward its $2.0 billion disposition goal, helping fund deleveraging and redevelopment. The company has identified another $200–300 million of assets for sale or potential giveback, with more than $15 million already under contract and over $50 million currently in negotiations.
Sales Productivity Holds Up as Traffic Stabilizes
Portfolio sales per square foot reached $881 in Q4, up $14 quarter over quarter, while the forward‑looking sales number stood even higher at $921 per square foot, signaling solid tenant performance. Overall traffic was flat year over year in 2025, but select flagship assets such as Tysons posted meaningful gains, with Tysons traffic up 16% in Q4.
Occupancy Gains and Leasing Spreads Stay Positive
Q4 occupancy improved to 94%, up 60 basis points from the prior quarter, with go‑forward occupancy at 94.9% reflecting recent lease signings and future openings. Leasing spreads on a trailing 12‑month basis reached 6.7%, 80 basis points higher sequentially, marking the 17th consecutive quarter of positive spreads and indicating continued pricing power.
New Concepts and Store Openings Boost Traffic
The company opened 416,000 square feet of new stores in Q4 and 1.3 million square feet over 2025, demonstrating strong execution in bringing tenants from signing to opening. A highlight was the first DICK’S House of Sport at Freehold, which has outperformed expectations and accounted for roughly 18% of the mall’s traffic since opening, with nine more DICK’S commitments in the pipeline.
Liquidity Strengthened as Debt Maturities Addressed
Macerich ended the period with approximately $990 million of liquidity, including $650 million of revolver capacity, providing flexibility to weather volatility and fund projects. The company extended a $200 million loan on South Plains to November 2029 at around 4.2% and has paid down or otherwise addressed all 2025 debt maturities plus a substantial portion of 2026 obligations.
FFO Lifted by One‑Time Settlement Benefits
Adjusted FFO for Q4 came in at about $129 million, or $0.48 per share, but that result included notable nonrecurring items that investors must strip out for a clean view. A one‑time legal settlement added roughly $16.1 million, partially offset by $8.4 million of incremental corporate bonus expense, together boosting FFO by about $0.03 per share.
NOI Growth Lags Long‑Term Targets
Despite the leasing wins, go‑forward portfolio NOI grew only 1.7% year over year in Q4 and 1.8% for full‑year 2025, falling short of the company’s targeted 5.2% compound annual growth for 2025–2028. Management indicated 2026 growth is likely to be back‑end weighted at about 3%, with a more meaningful inflection expected in the second half as SNO leases commence.
Leverage Elevated Despite Recent Deleveraging
Net debt to EBITDA stood at 7.78 times in Q4, representing a roughly one‑turn improvement since the Path‑Forward plan began but still high relative to long‑term goals and peers. The company is targeting leverage in the low‑ to mid‑6 times range over the next couple of years, which will depend on continued asset sales, NOI growth and disciplined capital allocation.
Disposition Pipeline Faces Execution and Timing Risks
Around $700 million of additional dispositions are needed to hit the $2.0 billion goal, with $400–450 million of that tied to outparcels and land that involve lender approvals and entitlements. Management acknowledged that while buyer interest is solid, the process to unencumber and close these deals is weighted toward 2026, introducing timing risk to deleveraging plans.
29th Street Loan Default Adds Asset‑Specific Uncertainty
An additional overhang is the roughly $76 million pro rata loan tied to the 29th Street property, which is now in default following its maturity. The company is in active negotiations with the lender, and until a resolution is reached the asset represents a discrete balance sheet risk investors will watch closely.
Leased vs. Physical Occupancy Highlights Short‑Term Drag
While leased occupancy sits at 94.9%, physical occupancy is closer to 91%, reflecting the lag as tenants build out stores and prepare to open. This gap suggests some near‑term revenue headwind until rent commencement dates kick in, but it also underlines embedded growth once these spaces become fully operational.
Dependence on Nonrecurring Items Clouds FFO Quality
The quarter’s FFO performance benefited from a sizable one‑off legal settlement that will not recur, underscoring the need to focus on underlying run‑rate earnings rather than headline figures. Management explicitly separated this income from go‑forward expectations, reinforcing that future FFO growth must be driven by organic NOI and leasing rather than unusual gains.
Execution Risk on Remaining Leasing Pipeline
The remaining 350 uncommitted deals, covering 1.6 million square feet, are central to achieving the full SNO and Path‑Forward earnings potential through 2028, creating clear execution risk. Management emphasized careful coordination of rent commencement dates and construction timelines as a key operational focus to ensure that signed leases convert efficiently into revenue.
Outparcel and Land Sales Slowed by Structural Hurdles
Although market appetite for outparcels and land appears healthy, the company highlighted structural hurdles such as unencumbering assets, lender approvals and entitlement processes that slow closing timelines. These factors mean that, even with buyers in hand, the cash realization from these sales will be skewed later in the plan, potentially stretching deleveraging and capital recycling.
Guidance and Path‑Forward Outlook
Macerich reaffirmed its Path‑Forward trajectory and will provide an updated Path‑Forward 3.0 at REIT Week in June, while planning a return to formal earnings guidance in 2027 as visibility improves. Management highlighted a mid‑2026 leasing inflection driven by the SNO pipeline, underpinning an expected step‑up in NOI and FFO contributions in 2026–2028, even as near‑term NOI growth and leverage remain constraints.
Macerich’s call painted a picture of a mall REIT that has rebuilt its operational engine but is still working through balance sheet repairs and asset‑specific challenges. For investors, the story hinges on whether today’s record leasing, SNO pipeline and anchor re‑tenanting can translate into the stronger NOI growth and lower leverage that management is targeting for the back half of the decade.
