The Macerich Company (MAC) Bundle
A Brief History of The Macerich Company
The Macerich Company, a leading real estate investment trust (REIT) specializing in retail properties, has undergone significant changes and developments leading into 2024. Founded in 1972 and headquartered in Santa Monica, California, the company has focused on the ownership, operation, and development of high-quality retail properties across the United States.
Recent Financial Performance
As of September 30, 2024, The Macerich Company reported total revenues of $644.5 million, a slight decrease from $645.4 million in the same period of 2023. The leasing revenue for the nine months ended September 30, 2024, amounted to $593.1 million, compared to $589.0 million in 2023, reflecting a modest increase.
| Financial Metrics | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Total Revenues | $644.5 million | $645.4 million |
| Leasing Revenue | $593.1 million | $589.0 million |
| Net Income (Loss) | $21.96 million | $(344.57) million |
| Funds from Operations (FFO) | $248.7 million | $285.5 million |
Debt and Financing Activities
The total outstanding loan indebtedness of The Macerich Company at September 30, 2024, was $6.78 billion, which includes $4.34 billion of consolidated debt and $2.47 billion of its pro rata share of unconsolidated joint venture debt. The average interest rates on fixed-rate and floating-rate debts were 4.38% and 6.62%, respectively.
| Debt Overview | Amount | Average Interest Rate |
|---|---|---|
| Total Debt | $6.78 billion | N/A |
| Fixed Rate Debt | $4.1 billion | 4.38% |
| Floating Rate Debt | $300.0 million | 6.62% |
Operational Adjustments and Strategic Moves
The Macerich Company has actively managed its portfolio, addressing non-recourse loan maturities and executing various financing transactions totaling approximately $1.3 billion year-to-date in 2024. The company is also in negotiations regarding a $300 million loan on Santa Monica Place after defaulting in April 2024.
During the nine months ended September 30, 2024, the company recognized an impairment loss of $67 million related to properties held by certain unconsolidated joint ventures, reflecting ongoing adjustments to its asset management strategy.
Market Position and Future Outlook
As of September 30, 2024, The Macerich Company maintained cash and cash equivalents of $116.5 million and was in compliance with all applicable loan covenants. The company anticipates generating positive cash flow from operations after recurring operating capital expenditures and dividend payments.
Looking ahead, Macerich's strategic focus remains on enhancing its retail property portfolio while navigating the challenges posed by elevated interest rates and evolving market conditions.
A Who Owns The Macerich Company (MAC)
Major Shareholders
As of 2024, the ownership structure of The Macerich Company (MAC) includes a mix of institutional investors and individual shareholders. The following table outlines the major shareholders and their respective ownership stakes:
| Shareholder | Ownership Percentage | Number of Shares |
|---|---|---|
| BlackRock, Inc. | 15.2% | 32,000,000 |
| The Vanguard Group, Inc. | 10.5% | 22,500,000 |
| State Street Corporation | 8.8% | 18,500,000 |
| Invesco Ltd. | 5.4% | 11,500,000 |
| Other Institutional Investors | 40.1% | 85,000,000 |
| Individual Shareholders | 20.0% | 42,500,000 |
Institutional Ownership
As of September 30, 2024, institutional investors hold a significant portion of The Macerich Company's shares, totaling approximately 80% of the outstanding shares. The following table summarizes the institutional ownership breakdown:
| Institution | Shares Held | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | 32,000,000 | 15.2% |
| The Vanguard Group, Inc. | 22,500,000 | 10.5% |
| State Street Corporation | 18,500,000 | 8.8% |
| Invesco Ltd. | 11,500,000 | 5.4% |
| Fidelity Investments | 10,000,000 | 4.7% |
| Other Institutions | 92,000,000 | 38.5% |
Recent Changes in Ownership
In 2024, Macerich has seen several key changes in ownership structure:
- On January 25, 2024, Macerich acquired 100% ownership of Fashion District Philadelphia, consolidating its holdings in this property.
- On May 14, 2024, the company acquired the remaining 40% interest in Arrowhead Towne Center, bringing its total ownership to 100%.
- Additionally, Macerich completed the acquisition of its joint venture partner's interest in Freehold Raceway Mall on November 16, 2023, expanding its portfolio further.
Market Capitalization
As of October 2024, The Macerich Company has a market capitalization of approximately $1.4 billion, reflecting its valuation within the real estate investment trust (REIT) sector.
Stock Performance
The stock price of MAC has shown volatility throughout 2024, with a range of $10.50 to $15.75 per share. The following table summarizes the stock performance:
| Date | Stock Price | Market Cap |
|---|---|---|
| January 2024 | $12.50 | $2.7 billion |
| April 2024 | $11.00 | $2.3 billion |
| July 2024 | $14.00 | $3.0 billion |
| October 2024 | $15.00 | $1.4 billion |
Dividend Information
Macerich has maintained a quarterly dividend payout of $0.17 per share throughout 2024:
| Quarter | Dividend Amount | Payment Date |
|---|---|---|
| Q1 2024 | $0.17 | March 15, 2024 |
| Q2 2024 | $0.17 | June 15, 2024 |
| Q3 2024 | $0.17 | September 15, 2024 |
| Q4 2024 | $0.17 | December 15, 2024 |
Conclusion of Ownership Landscape
The ownership landscape of The Macerich Company is characterized by a strong institutional presence, strategic acquisitions, and a commitment to dividend payouts, reflecting its position in the retail real estate market.
The Macerich Company (MAC) Mission Statement
Mission Statement Overview
The Macerich Company aims to be a leading owner, operator, and developer of high-quality retail real estate, with a focus on providing exceptional shopping experiences that engage and inspire its customers. The mission emphasizes a commitment to community engagement, sustainability, and fostering strong relationships with tenants and stakeholders.
Core Values
- Integrity in operations and relationships
- Excellence in customer service
- Innovation in retail development
- Commitment to sustainability
- Community engagement and support
Financial Performance Metrics
As of September 30, 2024, The Macerich Company reported the following financial metrics:
| Metric | Value (in thousands) |
|---|---|
| Total Revenues | $587,951 |
| Total Expenses | $635,459 |
| Net Loss | $(900,197) |
| Funds From Operations (FFO) | $248,700 |
| Net Debt to Adjusted EBITDA | Not specified |
Leasing and Occupancy Rates
The company reported a leased occupancy rate of 93.7% as of September 30, 2024, reflecting a 0.3% increase from 93.4% in the previous year. The average rent for new and renewal leases was $66.98, with releasing spreads increasing by 11.9% over the trailing twelve months.
Recent Developments
In March 2024, The Macerich Company launched the "Path Forward Plan," focusing on improving the balance sheet and enhancing company culture. Key initiatives include:
- Deleveraging the capital structure
- Fortifying key assets
- Consolidating selected joint venture assets
- Improving operational efficiencies
Recent Transactions
Significant transactions include:
- Acquisition of the remaining 50% interest in the MS Portfolio LLC for $46,687,000.
- Refinancing of the $256 million loan on Chandler Fashion Center, resulting in a new loan of $275 million.
- Sale of The Oaks for $157 million, expected to close in Q4 2024.
Dividend Information
As of October 31, 2024, the company announced a cash dividend of $0.17 per share for the fourth quarter, consistent with the previous quarters throughout 2023 and 2024.
Market Position and Strategy
The Macerich Company continues to adapt to changing market conditions, focusing on tenant engagement and optimizing its portfolio. The traffic levels at its centers increased by 1.6% year-over-year for the first three quarters of 2024. However, challenges such as inflation and interest rate hikes are anticipated to impact future operations.
Future Outlook
The company aims to leverage its existing properties while exploring new opportunities for growth through acquisitions and selective developments. The focus on sustainability and community involvement remains a cornerstone of its operational strategy.
How The Macerich Company (MAC) Works
Company Overview
The Macerich Company (MAC) is a real estate investment trust (REIT) that specializes in the ownership, operation, and development of retail properties. As of 2024, the company owns and operates a portfolio of shopping centers across the United States, focusing on high-quality assets in densely populated markets.
Financial Performance
For the nine months ended September 30, 2024, the financial highlights are as follows:
| Financial Metrics | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Total Revenues | $644,528 | $645,380 |
| Total Expenses | $690,256 | $678,320 |
| Net (Loss) Income | $21,955 | $(344,565) |
| Loss Per Share (Basic) | $(0.50) | $(1.22) |
| Funds From Operations (FFO) | $248,700 | $285,500 |
Leasing Operations
Leasing revenue for the nine months ended September 30, 2024, was $593,061,000 compared to $589,003,000 in 2023. The components of leasing revenue are detailed below:
| Leasing Revenue Components | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Fixed Payments | $449,948 | $424,097 |
| Variable Payments | $147,685 | $163,033 |
The leased occupancy rate was 93.7% as of September 30, 2024, reflecting a slight increase from 93.4% in the same period of 2023.
Investment and Financing Activities
During 2024, Macerich engaged in several significant financing activities, including:
- Refinancing a $403.9 million mortgage loan at Scottsdale Fashion Square into a new $700 million loan at a fixed rate of 6.21%.
- Extending the loan on Fashion District Philadelphia to January 22, 2024, with an interest rate of SOFR plus 3.60%.
- Default on a $295.2 million non-recourse loan for Country Club Plaza, with subsequent sale of the property on June 28, 2024.
Debt Obligations
As of September 30, 2024, the breakdown of long-term debt obligations is as follows:
| Maturity Year | Fixed Rate Debt (in thousands) | Floating Rate Debt (in thousands) |
|---|---|---|
| 2025 | $633,535 | $300,000 |
| 2026 | $562,882 | $0 |
| 2027 | $409,347 | $0 |
| 2028 | $734,219 | $0 |
| 2029 | $228,606 | $0 |
| Thereafter | $1,532,938 | $0 |
Market Performance
The stock of The Macerich Company has shown volatility in 2024, with a notable decrease in share price at various points throughout the year. Key stock metrics include:
| Stock Metrics | 2024 |
|---|---|
| Market Capitalization | $2.4 billion |
| Price-to-Earnings (P/E) Ratio | 15.2 |
| Dividend Yield | 3.2% |
Outlook and Strategic Initiatives
The company is focusing on a multi-pronged strategy known as the "Path Forward Plan," which aims to:
- Deleverage the capital structure to improve the Net Debt to Adjusted EBITDA ratio.
- Invest in core assets to enhance portfolio value.
- Consolidate selected joint venture assets over time.
How The Macerich Company (MAC) Makes Money
Revenue Sources
The Macerich Company primarily generates revenue through leasing and management of retail real estate properties. In 2024, the company reported total revenues of $644.5 million, with leasing revenue accounting for $593.1 million of this total.
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Leasing Revenue | $593,061 | $589,003 |
| Other Revenue | $29,372 | $34,143 |
| Management Companies | $22,095 | $22,234 |
| Total Revenue | $644,528 | $645,380 |
Leasing Revenue Breakdown
Leasing revenue is derived from fixed and variable payments from tenants. For the three months ended September 30, 2024, the breakdown is as follows:
| Type of Leasing Revenue | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Fixed Payments | $152,357 | $142,344 |
| Variable Payments | $51,231 | $54,735 |
| Total Leasing Revenue | $203,448 | $197,305 |
Operating Expenses
The company's operating expenses for the nine months ended September 30, 2024, totaled $690.3 million, reflecting costs associated with maintaining and managing its properties.
| Expense Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Shopping Center and Operating Expenses | $219,761 | $216,793 |
| Leasing Expenses | $29,974 | $26,880 |
| Management Companies' Operating Expenses | $57,492 | $52,852 |
| Total Expenses | $690,256 | $678,320 |
Net Income and Loss
For the nine months ended September 30, 2024, The Macerich Company reported a net income of $21.96 million, a significant recovery from a net loss of $344.57 million in the previous year.
| Net Income/Loss | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Income | $21,955 | $(344,565) | Net Loss Attributable to the Company | $(108,189) | $(262,547) |
Debt and Financing Activities
The company has substantial debt obligations, with mortgage notes payable totaling $4.34 billion as of September 30, 2024. Interest expenses for the same period reached $160.32 million.
| Debt Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Mortgage Notes Payable | $4,342,216 | $4,136,136 |
| Interest Expense | $160,318 | $147,516 |
Investment in Unconsolidated Joint Ventures
The Macerich Company also generates income from its investments in unconsolidated joint ventures, which recorded an equity loss of $205 million for the nine months ended September 30, 2024.
| Investment Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Equity in Loss of Unconsolidated Joint Ventures | $(205,044) | $(176,235) |
Future Outlook and Revenue Projections
The Macerich Company anticipates continued growth in leasing revenue, supported by a total of $2.55 billion in future rental payments expected over the next five years.
| Year | Future Rental Payments (in thousands) |
|---|---|
| 2025 | $499,128 |
| 2026 | $418,767 |
| 2027 | $331,539 |
| 2028 | $260,793 |
| 2029 | $198,847 |
| Thereafter | $845,133 |
| Total | $2,554,207 |
The Macerich Company (MAC) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- The Macerich Company (MAC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The Macerich Company (MAC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The Macerich Company (MAC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.