Macerich reports 3,600% profit jump in Q4 while “running out of anchor space”
Retail REIT refinances debt, improves occupancy but future leasing likely to slow
Some mall owners might struggle with retail tenants filing for bankruptcy, exiting spaces and refinancing debt. But, apparently not Macerich.
Macerich reeled in $62.2 million in net income during the last three months of 2023 — or 3,580 percent more than the $1.7 million in profit it reported in the fourth quarter of 2022, according to an earnings release on Wednesday.
“Congratulations on a great ‘23,” an analyst said on a conference call discussing Macerich’s quarterly earnings Wednesday.
The Santa Monica-based real estate investment trust still ended the year with an annual loss of $274 million, mostly attributed to $134 million in asset write-downs.
Macerich reported $884 million in revenues in 2023, up from $859 million in 2022, financial filings show.
Macerich also ended the year closing refinancing deals on some of its debt, pushing out near-term maturities, as many other mall owners have defaulted on loans tied to properties.
About 6 percent of all commercial mortgage-backed securities loans tied to retail properties were delinquent last month — about the same as office, but higher than other asset classes.
In December, Macerich and a joint venture partner scored a $710 million, fixed-rate loan to refinance its Tysons Corner Center in Virginia. Last month, the company closed a $155 million, fixed-rate loan to refinance the Danbury Fair Mall in Connecticut.
Also last month, Macerich repaid most of the loan tied to its Fashion District Philadelphia, an 803,000-square-foot mall.
On the leasing front, 93.5 percent of its portfolio was occupied at the end of last year, up from 92.6 percent at the end of 2022 and 91.5 percent in 2021. But leasing is likely to slow over the next year.
“We’re running out of large-format inventory — we’re running out of boxes, big anchor locations,” Macerich CFO Scott Kingsmore said on the company’s earnings call.
Macerich also is kicking off the year with an executive shakeup. Earlier this month, the company announced CEO Thomas O’Hern would retirie at the end of February. Jackson Hsieh, the former CEO of Spirit Realty, will take over on Feb. 29.