The Macerich Company (MAC) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presented strong financial performance with record high revenue per square foot, increased occupancy, and successful leasing activities. Despite high net debt to EBITDA, liquidity is robust. The Q&A section reinforced positive sentiment, with management confirming achievable growth targets and strategic asset management. While some uncertainty remains regarding specific financial metrics, the overall outlook is optimistic, supported by strategic leasing and sales strategies. Given the company's market cap and the positive indicators, a 'Positive' rating is justified, anticipating a stock price increase of 2% to 8% over the next two weeks.
Key Financial Performance
FFO as adjusted per diluted share $0.34, reflecting the company's financial performance for the quarter.
Sales per square foot (go-forward portfolio) $941, increased year-over-year, reflecting a 3.9% increase in total comparable in-line sales from Q1 2025 to Q1 2026. Reasons include improved leasing strategies and elevated merchandising plans.
Go-forward portfolio centers NOI growth 1.2%, reflecting a slight increase year-over-year. Winter weather negatively impacted growth by about 50 basis points.
Cumulative SNO pipeline revenue $116 million against a $140 million target, representing contracted revenue with approximately 80% flow-through to NOI.
Portfolio sales per square foot $899, up $18 compared to the last quarter, representing a new high watermark for the company.
Occupancy (go-forward portfolio) 94.5%, reflecting strong demand for space in the company's best centers.
New and renewal leases signed 1.6 million square feet, including 700,000 square feet of new deals, more than double the amount completed in Q1 2025.
Year 1 NOI for Annapolis Mall acquisition Approximately $29 million, projected to stabilize at $33 million, with an initial yield of 10.5% increasing to 11%+ at stabilization.
Net debt to adjusted EBITDA 7.76x, a full turn lower than at the outset of the Path Forward plan, reflecting progress in reducing leverage.
Liquidity Approximately $780 million, including $650 million of capacity on the revolving line of credit.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Leasing of 1,000 new units: The company is focused on leasing 1,000 new units to transform its retail centers, increase customer traffic, and improve tenant productivity. This strategy is expected to generate $140 million in cumulative SNO revenue by 2028.
Annapolis Mall acquisition: Acquired for $260 million plus $12 million for a vacant Sears parcel. The mall is in an affluent market and is expected to generate $29 million in year 1 NOI, stabilizing at $33 million. The acquisition is accretive to the 2028 FFO target by $0.04 per share.
Class A regional malls: The company is focusing on Class A regional malls, which account for 90% of its NOI. These malls are positioned in affluent, supply-constrained markets.
Gen Z demographic: The company is targeting the Gen Z demographic, which is expected to become the largest spending group by 2040. A Gen Z committee has been created to align strategies with this demographic.
Occupancy improvement: Physical permanent occupancy is expected to increase from 84% to 88%-89%, enhancing pricing power and tenant mix.
Debt management: The company has refinanced loans and extended maturities, reducing net debt to adjusted EBITDA to 7.76x, with plans to lower it further to the low to mid-6x range.
Path Forward plan: The plan includes leasing new units, reducing corporate leverage, and refining the portfolio through dispositions. Approximately $1.3 billion in dispositions have been completed, with an additional $300-$400 million expected by year-end.
Elevate and Transform strategy: This strategy focuses on replacing underperforming tenants with high-performing ones, as seen in Scottsdale Fashion Square and Chandler Mall, leading to increased sales and traffic.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Leasing Challenges: Leasing temporary vacant and below-market in-line and vacant anchor spaces is critical to the Path Forward plan. The company still has 250 remaining leases to complete, with 125 in the LOI phase and 125 in the prospecting phase, which could delay achieving leasing targets.
Anchor Space Backfilling: Backfilling 30 vacant anchor spaces is essential for the elevate and transform strategy. Delays or challenges in securing tenants for these spaces could hinder the overall transformation and productivity of mall wings.
Debt Maturities: The company faces challenges with 2026 debt maturities, including a $76 million loan in default and ongoing discussions with lenders. Failure to address these maturities could impact financial stability.
Economic Uncertainty: Winter weather negatively impacted NOI growth by 50 basis points in Q1 2026. Broader economic uncertainties could similarly affect future performance.
Disposition Plan Execution: The company has completed $1.3 billion in dispositions but still needs to sell or give back $300-$400 million in assets by year-end. Delays in these sales could impact leverage reduction and financial targets.
Retailer Expansion Risks: While there is strong leasing momentum, reliance on expanding retailers and new store openings could be impacted by broader retail market conditions or shifts in retailer strategies.
Gen Z Strategy Execution: The company is focusing on Gen Z shoppers as a long-term growth driver. Failure to effectively capture this demographic could impact future revenue growth.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Leasing Strategy: The company plans to lease 1,000 new units by 2028, creating $140 million in cumulative signed-not-open (SNO) tenant pipeline revenue, with 80% flow-through to NOI. This is expected to drive NOI growth through 2028.
Occupancy Projections: Physical permanent occupancy is projected to increase from 84% to 88%-89%, enabling more pricing power and further transformation of centers.
Anchor Space Backfilling: All 30 vacant anchor locations (2.9 million square feet) are committed, expected to generate over $750 million in sales, and act as catalysts for in-line leasing and mall productivity.
Annapolis Mall Acquisition: The acquisition is projected to contribute $0.04 per share to 2028 FFO on a leverage-neutral basis. Year 1 NOI, including SNO, is expected to be $29 million, stabilizing at $33 million.
Gen Z Demographic Focus: The company anticipates long-term growth driven by Gen Z shoppers, who are expected to become the largest spending demographic by 2040.
2026 NOI Growth: Go-forward portfolio centers NOI growth is expected to be at least 3% for 2026, with acceleration in 2027 and 2028 as SNO tenants open.
Debt and Leverage Reduction: Net debt to adjusted EBITDA is targeted to reduce to the low to mid-6x range over the next few years, supported by asset sales and refinancing activities.
Dispositions: The company plans to sell or give back $300-$400 million in assets by the end of 2026, increasing total dispositions to approximately $1.7 billion.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Could you confirm that there is no mortgage assumed for the Annapolis mall? How do you plan to capitalize this asset long-term?
A:There is no mortgage on the Annapolis mall. The initial funding was done with cash on hand, $85 million from the ATM, and $150 million from the revolving line of credit. The financing is leverage neutral to 2028 debt-to-EBITDA targets and accretive to 2028 FFO targets. Permanent funding will be evaluated over time, with sufficient capacity on the line of credit.
Q:How do you plan to achieve the 11% yield target for Annapolis mall?
A:The 11% yield target will be achieved through leasing opportunities, including 52,000 square feet of prime space near Uniqlo and Dick's Sporting Goods, flipping underperforming tenants, and evaluating the Sears parcel for anchor or residential options. Leasing momentum and merchandising efforts are key drivers.
Q:Is the same-store NOI growth target of at least 3% for 2026 still achievable?
A:Yes, the same-store NOI growth target of at least 3% for 2026 is still achievable. The growth is back-end weighted towards the end of 2026, with material ramp-up expected in 2027 and 2028.
Q:Why doesn't the financing of the Annapolis mall involve more equity? Are there other attractive mall acquisitions in the pipeline?
A:The acquisition criteria prioritize accretiveness to 2028 FFO per share, strong trade area, competitive position, and the ability to transform the property. Annapolis was an off-market opportunity with significant potential. There is a pipeline of opportunities being evaluated, and financing will be approached prudently.
Q:Can you provide a breakdown of the 1.6 million square feet leased in the quarter and comment on re-leasing spreads?
A:Of the 1.6 million square feet leased, 700,000 square feet were new leases, including anchor stores like Von Mauer, Round 1, and Zara. The remaining were mall shop stores. Re-leasing spreads are not being used as a metric currently, but a more thoughtful metric will be introduced in the future.
Q:How are sales trends for luxury versus non-luxury tenants across the portfolio?
A:Sales trends are positive, with a 3.8% comp sales increase in Q1. Most categories, except shoes, showed positive trends. Middle and upper-income groups are spending, and traffic at mature assets like Broadway Plaza and Scottsdale Fashion Square showed double-digit growth. Retailers are focused on value, relevance, and innovation.
Q:What is the update on physical occupancy and rent commencement schedules?
A:Physical permanent occupancy is projected to increase to 88%-89% as new stores open. The company is on track with rent commencement schedules, focusing on completing the leasing effort and opening stores to improve occupancy and financial performance.
Q:What is the current status of the 2028 FFO target?
A:The 2028 FFO target midpoint was $1.81, with recent acquisitions like Crabtree and Annapolis adding accretive value. The updated target will be addressed in the upcoming Path Forward 3.0 presentation.
Q:What is the composition of temporary tenants, and how do they impact the portfolio?
A:Temporary tenants typically pay gross rent and are used to manage pricing tension and merchandising mix. The company aims to reduce reliance on temporary tenants as permanent occupancy increases, creating opportunities for new tenants and improving financial performance.
Q:What is the current physical permanent occupancy rate, and how does occupancy cost compare to lease rates?
A:The current physical permanent occupancy rate is around 84%, with a target of 88%-89%. Lease rates are increasing as tenants transition from gross leases to fixed rent with fixed CAM and taxes, which will drive occupancy costs higher while improving financial results.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer to the updated 2028 FFO target, stating that it will be addressed in the upcoming Path Forward 3.0 presentation.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Aritzia
Class mall
Elephante
Elevate Transform
FFO share
Forward plan
Freehold Raceway
Gen
Mall
NOI Class
Nordstrom
Path Forward
Sears parcel
Teleferic
anchor space
anchor tenant
approval
catalyst
concept
convention
customer traffic
decade
dining
family
foot line
line tenant
luxury
mall acquisition
mall industry
mall wing
mix center
phase
restaurant
role
share leverage
space unit
trade area
transformation
wing line
MAC Transcript
The Macerich Company (MAC) Q1 2026 Earnings Call Transcript
Positive5-7
The earnings call presented strong financial performance with record high revenue per square foot, increased occupancy, and successful leasing activities. Despite high net debt to EBITDA, liquidity is robust. The Q&A section reinforced positive sentiment, with management confirming achievable growth targets and strategic asset management. While some uncertainty remains regarding specific financial metrics, the overall outlook is optimistic, supported by strategic leasing and sales strategies. Given the company's market cap and the positive indicators, a 'Positive' rating is justified, anticipating a stock price increase of 2% to 8% over the next two weeks.
The Macerich Company (MAC) Presents at Citi's Miami Global Property CEO Conference 2026 Transcript
Neutral3-2
The Macerich Company (MAC) Q4 2025 Earnings Call Transcript
Positive2-18
The earnings call shows strong leasing momentum, a significant reduction in net debt, and a robust liquidity position, indicating good financial health. The Q&A section reveals strategic focus on value-add acquisitions and a cautious yet positive outlook on consumer demand. Despite some unclear management responses, the overall sentiment is positive, supported by strong operational performance and strategic initiatives. With a market cap of approximately $3.3 billion, the stock is likely to experience a moderate positive reaction, falling into the 2% to 8% range.
The Macerich Company (MAC) Q3 2025 Earnings Call Transcript
Positive11-5
The company's strategic initiatives, such as the successful leasing targets, Crabtree Mall acquisition, and debt reduction plans, indicate positive momentum. The Q&A section showed a constructive debt market and positive leasing demand, despite some management opacity. The company's strong leasing performance, optimistic holiday sales outlook, and positive impact from the Crabtree acquisition support a positive sentiment. The market cap suggests moderate sensitivity to these factors, leading to a prediction of a 2% to 8% stock price increase over the next two weeks.
MAC Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
