Mall owner Macerich is on the ropes, and may have to sell or surrender properties to tackle its debt.
The Santa Monica-based real estate investment trust, owner of 47 million square feet strip and indoor malls across the U.S., posted a net loss of $126.7 million in the first quarter, more than double its loss of $58.7 million during the same period last year, Bisnow reported, citing a quarterly earnings report.
During the quarter, Macerich’s funds from operations fell to $74.6 million, from $95.9 million a year ago.
The REIT partly blamed the decline on the bankruptcy of Express, an apparel retailer that plans to close more than 100 of its 530 stores.
The 60-year-old Macerich withdrew its prior earnings guidance, citing a plan under new leadership to reduce its debt.
Former CEO Thomas O’Hern retired March 1, with former Spirit Realty Capital CEO Jackson Hsieh taking the helm.
“We have already started to execute on that plan, including property sales, potentially returning assets to lenders and buying out joint venture interests on certain assets,” Macerich said in a statement.
Early this month, Macerich defaulted on a $300 million loan tied to the 527,000-square-foot Santa Monica Place outdoor mall at 395 Santa Monica Place.
The firm has also reworked multiple loans this year, including a $155 refinance of its Danbury Fair Mall in Connecticut, while closing a three-year extension of the $85 million loan on the Fashion Outlets of Niagara Falls in New York, according to Bisnow.
Macerich is also closing an extension on a $151 million on The Oaks, in Thousand Oaks, and is refinancing a $256 million loan on Chandler Fashion Center in Arizona, which matures in July.
The company beat expectations for revenue, reporting $208.8 million, up from an expected $203.5 million, but down from $214.9 million in the first quarter last year. Expenses rose to $232.1 million, up from $192.9 million in the prior quarter and $216.9 million the year before.
Macerich has signed more than 1 million square feet of leases so far this year, a 14 percent increase from the same time last year. And last year was a record year for leasing at the company, with 4.2 million square feet of deals signed.
Occupancy across Macerich shopping centers was 93.4 percent, up from 92.2 percent a year ago. Rents for re-leased space was up 14 percent.
— Dana Bartholomew
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