Business Context and Reporting Period
Company: The Macerich Company (Macerich)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Three and six months ended June 30, 2026
Business Overview: Macerich is a self-administered and self-managed Real Estate Investment Trust (REIT) involved in the acquisition, ownership, development, redevelopment, management, and leasing of regional retail centers and community/power shopping centers. As of June 30, 2026, the portfolio consisted of 37 regional retail centers and one community/power shopping center, totaling approximately 40 million square feet of gross leasable area.
Key Financial Metrics
All figures in thousands, except per share data.
Income Statement Highlights (Six Months Ended June 30, 2026)
- Total Revenues: $491,245 (Decreased 1.6% vs. prior year)
- Leasing Revenue: $459,418
- Net Loss: $(63,746) (Attributable to Company: $(63,421))
- Loss Per Share (Diluted): $(0.24)
- Funds From Operations (FFO) - Adjusted: $192,832 (Increased 8.0% vs. prior year)
- Net Operating Income (NOI) - Go-Forward Portfolio: $358,174
Balance Sheet Highlights (As of June 30, 2026)
- Total Assets: $8,523,895
- Cash and Cash Equivalents: $227,028
- Restricted Cash: $83,918
- Total Liabilities: $5,616,422
- Mortgage Notes Payable: $4,848,075
- Total Stockholders' Equity: $2,827,198
Cash Flow Highlights (Six Months Ended June 30, 2026)
- Net Cash Provided by Operating Activities: $144,248
- Net Cash Used in Investing Activities: $(392,766)
- Net Cash Provided by Financing Activities: $186,501
- Dividends and Distributions Paid: $100,829
Material Changes vs. Prior Period
- Revenue: Total revenues decreased slightly to $491.2 million for the six months ended June 30, 2026, compared to $499.0 million in the prior year. Leasing revenue declined $9.0 million, primarily due to dispositions and the impact of Santa Monica Place, partially offset by $27.5 million in revenue from new acquisitions (Crabtree Mall and Annapolis Mall).
- Net Loss: Net loss improved significantly to $(63.4) million from $(91.0) million in the prior year. This improvement was driven by a $37.9 million increase in gains on the sale of assets (including West Acres and Washington Square outparcels) and a reduction in impairment losses compared to the prior year.
- Interest Expense: Decreased by $7.5 million to $133.5 million, attributed to lower balances on the revolving credit facility and dispositions, offset by higher interest on new acquisitions.
- Equity in Loss of Joint Ventures: Increased to a loss of $(15.1) million from $(1.3) million, primarily due to an $8.0 million impairment loss recognized in 2026 related to a reduction in the estimated holding period of a joint venture property.
Guidance, Outlook, and Risks
Management Commentary and Strategy
Management continues to execute the "Path Forward Plan," focusing on deleveraging the capital structure, investing in key assets, and consolidating joint ventures. The company aims to reduce its Net Debt to Adjusted EBITDA leverage ratio over the next two to three years.
- Acquisitions: Acquired Annapolis Mall (April 2026) and Crabtree Mall (June 2025) to strengthen the portfolio.
- Dispositions: Sold West Acres (June 2026) and various land parcels to generate liquidity and pay down debt.
- Development: Major redevelopment projects are underway at Scottsdale Fashion Square, Green Acres Mall, and FlatIron Crossing, with estimated costs ranging from $84 million to $265 million.
- Occupancy: Leased occupancy rate increased to 94.0% as of June 30, 2026, up from 92.0% in the prior year.
Risks and Contingencies
- Debt Defaults: The $300 million non-recourse loan on Santa Monica Place is in default (since April 2024) and under receiver control. Additionally, the $76.5 million loan (pro rata share) on Twenty Ninth Street is in default as of February 6, 2026, with negotiations ongoing.
- Interest Rate Risk: Elevated interest rates increase borrowing costs. The company has $471.1 million in floating-rate debt; a 1% rate increase would decrease future earnings by approximately $4.7 million annually.
- Tenant Bankruptcies: Bankruptcies of major tenants (e.g., Express, Forever 21, Claire's, Saks Global) impact revenue. Year-to-date 2026 filings involved 18 leases representing $3.9 million in annual leasing revenue.
- Forward Sale Agreements: Entered into forward sale agreements for 16.1 million shares in June 2026. Proceeds are not yet received and settlement is expected by June 2027; cash settlement could result in no proceeds or cash outflows.
Investor Verification Checklist
- Debt Maturities: Verify the status of refinancing for the defaulted loans at Santa Monica Place and Twenty Ninth Street.
- Forward Sale Settlement: Monitor the settlement terms of the 16.1 million share forward sale agreement to confirm expected cash proceeds and potential dilution.
- Development Costs: Track capital expenditure progress and cost overruns on major redevelopment projects (Scottsdale Fashion Square, Green Acres, FlatIron Crossing).
- FFO vs. Net Loss: Reconcile the significant difference between GAAP Net Loss and Adjusted FFO to understand the impact of non-cash impairments and asset sales.
- Joint Venture Impairments: Review the specific details of the $8.0 million impairment loss in unconsolidated joint ventures and its impact on future cash flows.