Business Context and Reporting Period
Company: The Macerich Company (Macerich)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Three months ended March 31, 2026
Business Overview: Macerich is a self-administered and self-managed Real Estate Investment Trust (REIT) engaged in the acquisition, ownership, development, redevelopment, management, and leasing of regional retail centers and community/power shopping centers. As of March 31, 2026, the portfolio consisted of 38 regional retail centers and one community/power shopping center totaling approximately 39 million square feet of gross leasable area (GLA).
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $241.5 million | $249.2 million |
| Net Loss (GAAP) | $(36.4) million | $(50.1) million |
| Loss Per Share (Diluted) | $(0.14) | $(0.20) |
| Funds From Operations (FFO) - Adjusted | $92.4 million | $89.8 million |
| Net Cash Provided by Operating Activities | $77.4 million | $88.5 million |
| Total Debt (Consolidated + Pro Rata JV) | $6.45 billion | N/A |
| Cash and Cash Equivalents | $182.0 million | $253.2 million |
| Leased Occupancy Rate | 93.4% | 92.6% |
Material Changes vs. Prior Period
- Revenue Decline: Total revenues decreased 3.1% to $241.5 million. Leasing revenue dropped 4.1% primarily due to dispositions of properties (Wilton Mall, SouthPark Mall, Lakewood Center) and the impact of Santa Monica Place, partially offset by the acquisition of Crabtree Mall.
- Improved Net Loss: Net loss narrowed by $13.8 million (27.4% improvement) to $(36.4) million. This was driven by a $20.8 million swing in "Gain (loss) on sale or write down of assets," which turned from a $14.0 million loss in Q1 2025 to a $6.8 million gain in Q1 2026, largely due to a $10.1 million gain on the sale of an outparcel at Washington Square.
- FFO Growth: Adjusted FFO increased 2.9% to $92.4 million, reflecting operational improvements despite the GAAP net loss.
- Debt Reduction: Mortgage notes payable decreased by approximately $218 million to $4.85 billion, driven by debt paydowns from asset sales and refinancing activities.
- Equity Issuance: The Company raised approximately $60.5 million in net proceeds through its "at-the-market" (ATM) stock offering program during the quarter.
Outlook, Risks, and Management Commentary
Path Forward Plan
Management continues to execute the "Path Forward Plan," a multi-pronged strategy focused on deleveraging the capital structure, investing in key assets, consolidating joint ventures, and achieving operational efficiencies. The goal is to reduce the Net Debt to Adjusted EBITDA leverage ratio over the next two to three years.
Acquisitions and Dispositions
- Acquisitions: Acquired Annapolis Mall (1.5M sq. ft.) for $260 million in April 2026 (subsequent event) and Crabtree Mall (1.3M sq. ft.) in June 2025.
- Dispositions: Sold various non-core assets and land parcels, including a significant outparcel at Washington Square, to generate liquidity and pay down debt.
Risks and Contingencies
- Loan Defaults: The $300 million non-recourse loan on Santa Monica Place remains in default (since April 2024) with a court-appointed receiver in control. Additionally, a $76.5 million loan (Company's pro rata share) on Twenty Ninth Street is in default as of February 6, 2026, with negotiations ongoing.
- Interest Rate Risk: Elevated interest rates continue to impact borrowing costs. The Company has $571.1 million in floating-rate debt; a 1% increase in rates would decrease future earnings by approximately $5.7 million annually.
- Tenant Bankruptcies: Bankruptcies of major tenants (e.g., Express, Forever 21, Claire's, Saks Global) have resulted in store closures and potential co-tenancy clause triggers, though the pace of filings is expected to be lower than the decade average.
Investor Verification Checklist
- Default Status: Verify the resolution timeline for the Santa Monica Place and Twenty Ninth Street loan defaults and potential asset transfers to lenders.
- Debt Maturities: Review the schedule of debt maturities over the next 12 months, specifically the refinancing strategy for the $951.8 million in obligations due within one year.
- FFO Reconciliation: Analyze the reconciliation of Net Loss to Adjusted FFO to understand the impact of non-cash items, default interest, and property receivership exclusions.
- Capital Expenditures: Monitor the $275M-$325M projected capital spend for development and redevelopment (Scottsdale Fashion Square, Green Acres Mall, FlatIron Crossing) and its funding sources.
- ATM Program: Track the remaining $307.3 million capacity under the 2024 ATM program and potential dilution from future equity issuances.