MAC - Earnings call transcript Q3 2020

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Operator

Good day. And welcome to the Macerich Company Third Quarter 2020 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Jean Wood, Vice President of Investor Relations. Please go ahead.

Jean Wood

morning. good and you Thank Thank you XXXX our quarter us for call. joining earnings on third all

impact During this measures within of course Securities U.S. that the Reconciliations the supplemental financial of included harbor tenants. the Litigation may economy, release at certain the are be earnings safe the XXXX, be Investors press expectations. in novel statements condition coronavirus including and statements with Reform X-K making the its Act of website GAAP set suddenly uncertainties and of seen deemed non-GAAP filed Form which risks including the of future may of release our materially filings, the and Actual are today’s SEC, forward-looking SEC and posted on of regarding and the operations of adverse macerich.com. projections, of plans call, company due regional section the differ the meaning the in directly most and financial company’s forth results Private and measures we of results will or on the to the comparable variety in global a to

O’Hern, over Vice to Tom Vice Tom. Officer; call are Officer; today Senior With Executive that, Executive Leasing. President, us Joining Doug Healey, Kingsmore, to like President the turn Scott Financial Chief Executive and Chief and Senior I would

Tom O’Hern

continue as Jean. you navigate And today joining we these to you, unprecedented Thank thank of all through us times. for

and early Los re-leasing earnings most with quarter centers X% our occupancy most only quarter, X town better second were in albeit As by of Those release, October. the in nearly third centers in of XX%. challenging closed a our At of remaining mandate. had We reopened the government quarter, centers than closed you the at end read third Angeles in open quarter our was respects. the spreads

the holiday a to impacted obviously eagerly the season. the tenants quarter, a tenants quarter centers, due due job So were are shoppers. of quarter centers York closures. I’m and the employees all number open rehired time. our get better priority the and reopen general our in back New appreciative our of team than for as centers and of for back a cases during California reopened our COVID to planning and second The tremendous entire to was to safely safely the getting protracted adversely results today, were that did in open in one all and Macerich busy are second to work, Most let we welcome very City to of specifically their and of our but of some

hospital and approved to modified our services. CDC of advise the are us beyond air protocols, and engage UCLA Center policies. air include we to cleaning Medical safety CDC We hours, review upgrading head our measures clinical Some products self-health quality recommendations We firm and systems took for systems the filters, that HVAC increased to way and that on guidelines, protocols. included and a our renowned us advise filtration Infectious engineering with filtration on nationally implemented hired advanced sanitizing of baseline significantly went at and Disease protocols

the In much third we terms off the are better second of rent in compared collections, quarter. quarter to

collections quarter, XX%. trending the were October During average is rent our XX%. third above

rent that in paying fourth closure will with by generally for agreed reserves come period, the to we we rent Cash terms to landlord-favorable of not as the the the deferred the the in usually relief I tenants move them. to for quarter, with which would the continue. uncollectible in of leases. Scott to In improve we months in were during month form expect to flow in most There into large XXXX, exchange for many on. amendments repayment comment For rents some quarter, general, continues and closure cases, rent

have significant have reopening, million The today, currently been of good. has As sheet. liquidity reactions approximately on and we tenant $XXX to the of balance cash

were X to almost demand. tenants, levels. has centers shopping for The exception, By get pent-up and were purpose reopened. pre-COVID without sales to at opened weeks, consumer of a October, with eager Our been XX% is up least there

past more The tenants our Our and less focus about quarter leasing. in was second getting and quarter opened to the leasing. started shift about safely back and collecting was getting due open rents third to centers

in Looking traffic, running a it’s general, XX% about year ago. at compared to

restaurants on particularly the XX% no for I’d higher of categories be on be COVID, to different say, leisure. consumers on [indiscernible] to money money Day. our to food be closed spend there, will rate. spending ago, has hand, There a a in With and of And home other and earlier. with lots going but in for that do consumers limits. capacity of furnishings, having of There will which stores wellness, are this holiday entertainment be season. vacations will will be the with seating electronics Thanksgiving also not year Operating fitness Some expected have running our be average believe markets are This to capacity social Top distancing. and Sales, during most limits, and holiday court. it’s most will capture athletic shorter. season. means start We hours on year

Proposition questions from the in commercial known of potential There in California, We Prop California. in scheme proposition increased small have have things. It property political for tax XX. taxes of in that although properties removed would proposition commercial about That XX protection got a the a have increases on was California is would property number as of property.

as line leases [indiscernible] a our pass-through taxes to passing. with significant structure recoverable the tenant XX we the generally, to Prop us, shows that For bottom expense a impact

today, trailing. stand are of the it yes votes XX.X%. As XX.X%, is at no at The

means taxes California. So in that for hopefully, increase no commercial

than of not their Digitally going retail of especially ever, Doug. A away, and quarter Looking the at good Big specifics centers. from quality format is more the profitability the some stores. again in active brands pandemic balance that has the appreciate, you’ll physical third retailers hear of got XXXX, in the shown native

of Although we And XX% XX% of categories, pre-COVID. the still capacity, challenging if in those operating XX% portfolio, COVID, we of at are the sales our at more our you centers XXX one are and restaurants, in levels even look today. are of open restaurants have midst

even specifically was into fourth into an second carried quarter got the quarter quarter. opened partially was and of – quarter, the less the But carry second we adoption much The than higher of second better challenges many ‘XX, reserves accounts than The for of extremely third progress and some unique but the on may normal. collections. third tenants quarter metrics are quarter quarter leasing activity. number XX And and the the making impact in still on

We improve gradually more expect to normal a level to ‘XX. the of in quarter first

of many we I’ll year fourth better expect are XXXX. third And quarters to and second quarter uncertainties XXXX there to to too still XXXX turn much it of over now be the Scott. give guidance, Although the than the and

Scott Kingsmore

were City shares debt declined income down year-to-date, following parking accounted about New million Changes quarter third the down for Tom. you, a million operating million net operating of in Regency versus the assistance; for and primarily increased expense it share. for $X third sale $X $X per versus third totaling net quarter the a XX%. income million in impact. the XXXX the numbers quarter, COVID-XX stock quarter. in of in the third interest; Hotel of as per from impact of These reverse of rental cover coupled primarily; Same-center XXXX GAAP $X.XX decline expense quarter. at of driven a quarter of that between income in offset Thank Funds per capitalized share net declines as the three, on was cash centers issued five, million basis and lease common the $XX it seven, the revenue [indiscernible], was third second million four, Chicago urban the by million third XXXX, gains the contributed from dividend relating third XXXX was within XX%, decline; area due million closures the the and to both per decline our two, impact and lease to net the at $X.XX loss from $XX quarter a to factors XXXX and FFO from Revenue tenants, with I’m down reduced nonrecurring quarter $XX are and for Disruption declines was our percentage company: in factors well the continued all quarter debt allowance dilutive protracted the increased also six, rents; quarter. Hyatt by third from quarter; a for utilization the York income operating share, to severely million in occupancy results million a operations increased million – negative interest short-term from by of termination income $X $X.XX to net for $X over [indiscernible] $XX in land going second one, were $XX of bad form in ancillary and driven decline property parking $X revenue issued in

providing results We As uncertainties. fourth XXXX quarter. earnings in anticipate operating updated mentioned, not continued the guidance we continued volatility Tom are do given

operating lease year-to-date versus quarter. balance in will in with funneled $X $XX this assistance anticipated we believe We last cumulative approximately forward. While these that $XX in not is for anticipate reported We primarily of are the including those do embedded XXXX, expect of troubles rental the vending were recorded have volume already temporary approximately not of this reorgs results resulting liquidations. to next million do as we’re XXXX the effectively to forward to following revenue. we transit The other not reported million cadence guidance wave bankruptcy rent, typical a of accounted from garage XXXX. close rejections, company’s mentioned to stores parking and providing drop guidance additional [indiscernible], namely on ancillary anticipate not lease XX.X% of be occupancy million majority tenants factors: to into item revenue trough will expenses in half full certainly debt filings XXXX, XXXX. still of for revenue, pandemic within well numerous a within going fourth going Year-to-date, We X% and short-term revenue occupancy forward a due The increases financial the [indiscernible] the for the XXXX, quarter, expect our the accelerated and quarter, quarter has Similar we and which driven fourth recur reserves in in third We’ve reserves resulted in line have in And of filings of we $XX the that including on and cash million look then levels debt nonrecurring over reversals lastly, tenant basis. XXXX. income, XXXX quarter. sponsorship, the we providing time property advertising, continue percentage into and bad bad a fleet –

both retailers. negotiate testament XX% in and progress to all further rent Tom over continues the to elaborate in will improve. which continues solely agreements anticipate Given flow from our Doug our the the year. we by soon third improved the to has of improved in With million is million open this in negotiations, Herculean people improve on September cash and flow continued XX October, as quarter hand upon, $XXX day. operating right a increased operating thousands the with liquidity properties these to to improvement improvement This to to of And is due liquidity to $XXX our at to noted, cash XX% liquidity collections continued June efforts of and at Cash XX. throughout secure to

The of $XX are a Vita, will the tower Corner. approximately million have include loan extension. million of on secured Danbury within extension and that April The Tysons liquidity a to loan rate closing through We entire on loan next the interest-only on will rate loan the company, the amount occur a short-term following unchanged We X, and This several the remain X.X% $XX interest XX-year at weeks. closing Fair to and term. financing will we payment provide residential XXXX. during Tysons fixed expect

loan servicer of We extension have XXXX. loan through Fashion October on the which maturity of extend will Outlets terms with the X-year agreed a for Niagara, to

within we loan the that and loan our following We rate coming then we the adjacent to term to extended non-recourse and to of And Crossing, extension. secure Mall center amount each to on work lastly, and expect continue securing FlatIron unchanged the the interest weeks. Green with Commons, power be anticipate for that also Green lenders Acres extensions Acres mortgages

Now environment. leasing I the to will turn Doug to it operating discuss over and

Doug Healey

the quickly as of third once To square opened in partners now report to open of our allowed involved Thanks, centers efforts the to safely as date, our Scott. am our is the majority happy open reopen. open I properties of quarter, today. retail possible footage getting quarter pre-COVID Like were are second that the and as all was our XX% that and

the made case As time I discussed great of pay it those on call, did with much has third was rent energy our our in and closed. while been last progress. spent ability the have the not And we’ve to quarter, retailers that working

top approximately secured in we XX% pay. In paying improve. rent our to LOI payment at as look total XXX continue XXX another all rent received rent of these documents retailers, and XXX with XX, fact, collections full totals either of are or top we’ve the which Consequently, executed with

saw in the October our to collection But that’s quarter. about as stands quarter about Tom collection. average wasn’t at today, of an rate And third as XX% collection quarter compared all rate XX%. second of Third XX%, mentioned, for the

of at months, As on trade to with some importantly, on the rather per third $XXX executing the third let’s a square this metrics. climate the sales Retailers quarter were consistency, Portfolio-related to of first, for past. since But out that take the a expand to centers end time foot leases look sign some for new but moment, and first have leasing continue before I’ll improve. again, of exclude tenant. quarter foot, in most square as XXXX. we’re true than were that’s down been open deals and third our COVID that is began each $XXX at the in began to COVID. and retailers the able our computed focusing period retailers forward solely to for $XXX closures the per opened began looking quarter The now the committing from a the

from at in sales For was XX last due and that’s that’s XX% leasing spreads down X% That’s tenants from in our was local bankruptcies couldn’t the basis $XX.XX, last what XX survive Apple opened this Occupancy of store we quarter entire down once Trailing end occupancy last time the but down X.X%, that down centers of and the the X.X% up year they exclude year last from quarter X.X% year ago. year. from XX.X%. ago. primarily Temporary actually pandemic. from XX-month points were a Average from to QX points quarter month, and X.X% basis $XX.XX X.X%, from rent closures down September This was quarter, third for portfolio a Tesla. $XX.XX were from were down XXXX. ago, and is for the one

second the XXX,XXX was and do quarter not environment any the leasing signed improve. In over the include the is earlier, deals mentioned I This we workouts. continues stats in As footage Xx leases third XXX to to quarter, that square COVID signed number feet. square and of these

third signed Square; Barbarie’s and at Outlets Kids category Reed at at quarter to at XXth Fashion at Ducati Madison Paris District new at in additions Corner. and Fashion the finally, Danbury SanTan; Empire Lucid Scottsdale portfolio. Fashion electronic of note include The at Starbucks Polestar the Fashion car Polestar Some Fair; of Grill at Corte and Lucid Gucci, Philadelphia; XX to Village State Tysons Scottsdale leases Chicago, Macerich Street; the Square Both are Madera; and Motors first Brewery

through commitments of total in by our focus on XXXX XXXX LOI workouts footage expiring head we over our to time, course is of this in expiring normal and As stage. as square footage the of XX% in leasing, the year, as in of possible. deals finalizing secure COVID and with towards the At on to our of the lease virtue our XX% point leasing end XXXX square have we footage much expiring XX%. much square XXXX order another activity just brings expiration This on

quarter, the and total had footage year, of of XX% XXX,XXX in rent. annual openings million. rent the quarter new in more same virtually XX we $XX.X third represents openings opened but feet, the annual the to XX% same with we at resulting tenants last This square Turning square total and

the conditions Golden at portion at store quarter. opening. pipeline former at gallery a finished Deptford Scottsdale Sears a former at a think Aerie Sporting of months, the them we the Cafe to Sears And Dick’s several XXX in and retailers Warby with the annual a active Tempur-Pedic Village signed also Given Parker At Goose, Falls; FlatIron feet Street, Hospital Capital total leases into opening Levi’s of a and Mall, Elm industry of One. Deptford of Books store; that scheduled at X.X was million XXXX. Wilton retailers leasing omnichannel $XX Sporting totals also million. new Burch with new Dick’s brands have point, and rent. last throughout they X-Star And with and strong. have speaks in to square XX Fair and Outlets of over square spectacular The Notable won’t we pandemic, feet quarter of October, they La $X of store; remains X Faire; portion the Vintage Scottsdale; be we former the the of Danbury at open the won’t stores. commitments opening this Encantada; we at and Mall, at Round impact total The all by X.X million the large-format in Indochino hardware Amazon Fashion in remainder at informed continue opening at the made $XX no digitally only pipeline Vintage of and Madera. only had of Saratoga million be X Corte of Crossing. Square. Goods, our the remained in to include this at Fashion In And – restoration I and us and in looking repurposing Total of a feet was faced openings the opened XXth And with only Forever at Goods We volumes a XX,XXX square Sears exception. In October, stores West Amazon reopening at in for has box. expand this And category, is their along signed since Sears, the our opened One rent the at this and This strength presence Niagara emerging these Scottsdale third pre-pandemic. Tory with of Faire third and adidas of million XXXX we

to There’s with Lastly, of of year, I traffic and fact no traffic. and want last ton a is. down address that. arguing the been the traffic is compared issue on focus it There’s

such year’s is to like reopening outperforming COVID, seems XX% since Body last a close Works reopening to month Burlington, aren’t However, Atlas Park, with perceived ranked the or row traffic, Macerich or at XX% Italia, sales in these exceeding North all overwhelming virtue One Square or one since had Why success is Primark at the denying Golden notion stores important. list Broadway also months inventory Plaza, has reopening; Gucci, And on double-digit Round and Freehold, La conversion traffic stories sales forced waits or like I that XX% due is at that Louis Despite beating and about as season means Fashion X on stores expecting & the with replace; at of this with XX% goes and tremendous to company portfolio ever the River, while are last restaurant seeing at capacity often at Plaza the capacity; Sephora and higher night no and year of pre-COVID to top and limited talking on that. Goose, in we sales and Tillys is Encantada, the to the through Kings both? on. effect and occupancy; back as by traffic increases XX%; capacity Scottsdale were the HomeGoods sales to currently success even focus to Deptford at too to the Unfortunately, struggle of took at short-term than Arrowhead, best at location. as a at less be reported reopening Bath at a Valley of Vuitton in at #X May XX% their by planned at weekend; by store in that the or XX%; at no in pandemic rates full region on retailers or a in last selling that Make more success. retailer’s XX% the or are There’s to pre-vaccine. this Danbury, its mistake, being sole overshadowed by traffic luxury combination year; or [indiscernible] operating conversion hour-long the holiday

think think to time metrics focus in to However, that, And we stop do And I for we it other to call think. all operator a up thinking over with than we’ll dimensionally the I so that place the do, much I’ll traffic. are many better on and it’s in find open turn Q&A. simply one when we addition

Operator

Schmidt And to from Instructions] [Operator we America. the of Craig go first question of you. Bank Thank will

Craig Schmidt

given get stocked able the in inventory malls, this enclosed just wondering, for ‘XX? late to [indiscernible]. ability the was I some Or you. Thank are openings of their limited holiday of has to fully they

Tom O’Hern

having how and had reopened, doors closed are bit the as of in of to their Actually, little being Hi, go. ready experience you? inventory, most of a retailers result managing Craig, a

lined up know season. So decent both are generous of for benefits, we But been of given their difficulty back. employees of them malls lot And terms in had unemployment a had and inventory of good getting and the because them most poised pretty their most found holiday were furloughed. when the were even they the did, employees though and the employees, ready in have in open, enclosed didn’t the exactly a in position, retailers to expectation, inventory going California, and

Craig Schmidt

follow-up, of is debt a liable of then Philadelphia? District Macerich guarantees fully for And Fashion and rise Great.

Tom O’Hern

loan several No, REIT, Craig, the is that’s is – so a obligation obligation half Macerich. that’s a the a loan, half that Penn is

Craig Schmidt

Thank Okay. you.

Operator

And to Mike question JPMorgan. our we’ll move next of Mueller from

Mike Mueller

Hi.

the a talk this spreads what to about activity that was full of are how that just XX% little you’ve So you for XXXX quarter? referenced, compared reported the bit leasing on can bases

Tom O’Hern

should Yes, that Doug one. take

Doug Healey

sorry, I’m could repeat the you please? question,

Mike Mueller

Yes.

the rent For activity walked are for leasing that? XXXX through, that what the on spreads you

Doug Healey

feel free in, [indiscernible] Scott, to jump

Scott Kingsmore

good Mike, we’re hazard so Yes, The call [indiscernible]. morning. all separated a when of

say haven’t computed though. I the We spreads, this, would

We’re using this as an opportunity to get in front of our ‘XX [indiscernible].

Our certainly largest occupancy. is dollar focus than is REIT. the right now Occupancy the critical, of final more critical

a mind I strategy the in expect metric computed of a As declines but point. spreads the have at perhaps result recession, we’re in that don’t some about this right of rather occupancy, feedback out paper would XX we that we show bit, Bear very to coming occupancy on did ago, similar now, to be [indiscernible] years very than to strategy. what a the of focusing taking good

give [indiscernible] are say, going of err on these when shorter rather of longer a is the us would better side the couple years to now. from being I so price to than renewals, And environment

Mike Mueller

it. Got

Tom O’Hern

been we the spreads spread. in to though, it’s The included a it’s XXXX extent if actual – reported, a even the leasing start, the lease that signed, has

think I were X%. last So we quarter,

we’re quarter, Third X%.

third than quarter. signed letter any that referenced, spreads are those the openings intent. rather leases, the will of the be So to extent second on deals and actually of we There in reported XXXX the Doug

Mike Mueller

the is you top a levels how your when tenant quarters activity bottom you the then can at look and strong three follow-up, talk quartile about portfolio the it? of And it. compared Got interest to

Tom O’Hern

the been stores and XX, for year, started the were last of that take corporate open. offices, or since I they their as trading to I’ve where can was malls, interesting. and really But back really XX back retailers Mike. the can XX% their employees, their shutdown, to opened, business were our retailers pandemic real mean the they has leasing. days have to nobody focused I Yes. screeching on It’s came that, on really halt. peak. estate getting When get interest The focused and understanding mentioned, a

top normally XX% XX% think you XX%, XX%, been XX we ‘XX now have top – quartile them leased. see ‘XX, Our top – mentioned or our And I leased. in our XX% properties

said, that of are be – with really advantage in good time balance top-tier sheet, shape real have to are some going that So on in products happened up in went some Those with – side take come peaked opportunistic. the that while, retailers and And opening of the our the to strong into of years a the space be good to want in really, some interest that’s centers. great that other that. it’s hasn’t we of these and going pandemic out first

Mike Mueller

Got it.

Okay, thank you.

Operator

go we’ll And Point. to Van Compass Dijkum question of our Floris with next

Floris Van Dijkum

so of quarter to it should But sort how for be great? Thanks increase And the rents color that, would the you in guys. of talking some taking third get more leasing of your up that for give declined? what could guys base. billable a rate are off sense wanted your run billable Hi, you’re market about, has compared my can the question. – a some yourself presumably, on I setting if you much your it that sense get with how to first and quarter NOI rents? I activity So that

Scott Kingsmore

Yes, don’t bit but relative in one that rate Floris. say off-line, Hi, the have I down a to can is good figure morning. first billing quarter will as perhaps the the quarter, I imagine. quarter third certainly – can third the that is We handy. follow-up

primarily third that with concessions going short-term closures challenged through into categories. quarter, locals the we’ve had the have rental factored You’ve some some bankruptcy. as And then got a of result

the have I of but do me. relative billable first quarter third the that not pre-pandemic, certainly, in to rate in So reduced has quarter front the that

Floris Van Dijkum

them My getting pitch Maybe of follow-up how – maybe to question has up changed result as and of Okay. of have the in assets? as Or pandemic this? positioning follow-up terms tenants – your changed signing we your a result assets you to offline. can your a your the of

Doug Healey

really it’s has position Floris, Doug. don’t think our at Hey, changed all. I

what into has continues – is And call our something everybody. focus changed. hasn’t and malls we where to there’s that been Our morphing town for centers be

slowed come some the down not it does changed experiential that concepts bring to to categories, think such our of town where process a different in we to and but It’s the philosophy a to the active. remain and little in back and That theaters, hasn’t centers going But a it’s come bit. slowed creating properties. bit, going still back form, category of look I entertainment, away. going it’s

Operator

from move question, comes Citi. so to And which Michael Bilerman of we’ll our next

Michael Bilerman

the spend talking levels. with time you here fair Bilerman that And liquidity has up understand Citi. certainly the extensions resi I liquidity complex. leverage still new FlatIron the doing and like Michael from about same loan Outlets Fashion Danbury on the it’s and of on I It Hey, sort can level and a some shored Tom, company quite remains by overall having a Green sounds for wondering high. of the you’re But getting was Acres. company on amount if Tysons a standpoint, of and leverage the

it through about planning assets out? element additional And either so you are are may be maybe of of just on terms equity Or it’s handing waiting addressing capital back that that sales, in raising you some how thinking keys overleveraged?

Tom O’Hern

markets the much financial Michael, as great capital shut down. Well, saw we crisis, have with basically

We happen appetite a isn’t XXXX, again. change. good and So to the with happen change and in will saw raising to And particularly assets. delever. same for capital That will be a time now that will XXXX

the crisis liquidity. $X.X financial XX malls starting in XXXX, of recall, generated out As coming about you billion we of sold

flow, leverage though than in ought that opportunity post-pandemic, of and expect I cash more flow beginning it’s to the year, be current we the we’ll is, and had thing to would de-levering, would and that current fair excess allow levels. operations the forecasted at use out a to things for and for a cash level, given dispose level normal will of dividend it’s been that the capital post-vaccine, return near-term the significantly assets use amount to the of less even non-core play. have point us the from One reducing So in of

Michael Bilerman

billion be to year next help credit if July, push July, to of you line obviously, of are any understand lot an which of used you the Can you sort past out sort all that update predominantly fund get of now extended have of venture the because whether refinance commitments give to to way? not drawn. to capital that? your look your any willing full on X there’s could joint you’ll in you able you venture proceeds as joint if assets, you it us extension this a And $X.X And partners,

Doug Healey

I’ll that can of elaborate, you take part then part last the that, Scott. first and the and of

a new a of we’ve in line credit. Michael, We’ve some conversations our also indicate, XX-year we’ve to credit, you currently and that of relationship we’re with and line do As extended got bank time got our lenders line with group.

this time line be seventh the we’ve of credit. So recast that will

that’s It’s are credit overall really really balance. in to obviously, But the point, discussions on well. on. a look reduce you But of early in amounts. tell the used too to we discussions. like sheet as have some would at those the will the amount So cash what be terms And the fair that balance

all increases, of to what improve, pandemic. we spending spending cautious things post-COVID think, I far, expect have of us would about similar in to capital during Very terms and our partners financial the capital the similar saw to started that to see been and being in venture I as crisis, so as joint well. then And

Operator

we Burrows on from Caitlin of question so Goldman to move next Sachs. And will our

Caitlin Burrows

wondering as Combined list, I with talked you good XQ, occupancy down expectations? that you your talk was future with of leasing your the progress. about watch for could if mean watch occupancy basis what XXX but list morning. then does current points about Hi,

Tom O’Hern

Caitlin, I had result of COVID. we remarks, as Scott a into think list acceleration of in bankruptcy our Hi, well, an watch as his mentioned,

that’s we an not next keep are have tenants watch over we’re seeing the the would in of liquidations, of failures list the course open the we that tenants happened happened typically them. Most now, frankly, or about our reorg right Obviously, X years, And course and X keep case, of months. but the as bankruptcies, last roughly in eye XX% what so short. rejected And similar bankruptcy [indiscernible] stores in pretty them, the our – on indicated, post third to is So are Scott reorgs. here. of X were that

result COVID. that? short as watch fairly further So is want actually on the of to you elaborate today a Doug, list

Doug Healey

Sorry?

Tom O’Hern

on further elaborate to the care you Doug, list? watch

Doug Healey

No.

on similar that of this or X our our I list. were the only has means two a there say list watch all locked bankruptcies We or decreased many it only watch which I Tom, you think, things. I And the on that would think, X XX so spot them think of probably saw thing to I on. means list, significantly we of concert. keep were year, pretty The a watch fact XX, weren’t weren’t good

Operator

then Thank Sandler. Goldfarb to from Alexander of next move question Piper you. We’ll our

Alexander Goldfarb

Two Hey, out questions. good there. morning,

the First, just that quarter were now. the $XXX that guys on also you don’t full forbearance. that talked covers maturities right the of were I malls sheet, following on the if quarter. we discussed last XX a in But few another about then million up last have balance that know extended there’s

on that can and So malls? shrunk? update increased? Has give you XX process if just that the us forbearance Has an it’s still

Scott Kingsmore

here. It’s in I of we Commons. near-term Yes, secured secured remarks, Acres two or Still – Acres opening We have sure, Scott Mall, as Green closed FlatIron, on our either Alex. mentioned working five on terms Green maturities. my

[indiscernible] Commons pretty successful principal So that’s no quality or short-term Again, And the extensions assets. from effort, terms rate. remaining FlatIron change far, were thus Green and $XXX so those million. in interest the longer-term comprises what are high assets, far, extensions Acres to ranging

we do you [indiscernible]. think the to are. how I disclosures The was on extensive balance debt simply It loan what we and defer So those servicers sheet agreed the to with or successful periods in lasted We that be service the repayment XX the a mentioned, queue, agree amicable have on long which payments. cover lenders very those with well. assets as process will

through Now that will I first very it, quarter we with payments are debt call [indiscernible] so in amicable... November, or remaining, I XXXX, three to service catch-up months the believe about from they have the of it two

Alexander Goldfarb

understand sure I just Scott, you. so I make Alright

we that in see XX the those were So and assets will forbearance, out. when basically, queue you got comes –

quarter service of got deferred guys end debt Is through that You first XXXX. correct? the

Scott Kingsmore

debt repaid. which We now got is deferred being service,

months. will XXXX. extend repaying into repayments, the are all So, those Alex, were now And the that we during debt summer And those first quarter of deferrals of service.

Tom O’Hern

debt X-month service that It’s in will quarter for of generally they payments the later repay even agreement were generally when the a it two to months fourth we first defer XXXX. able quarter in or

Alexander Goldfarb

just, you are taxable dividend don’t driven back pay a or need now, the Okay. purposes? right And to that tax dividend, for then amount that paying is right the now, to income Tom, going you

Tom O’Hern

based pay of income. for if cut obviously you taxable the we here for same income maintained balance of the tax taxable We we dividend purposes, coming dividend. year. last any the up have And estimation on limits and quarter The

Alexander Goldfarb

is on – So taxable the – currently? where $X.XX okay, income but based so is that’s your

Tom O’Hern

annual No, an Alex. recall, half in had you dividends of the first number, it’s And the year. we higher

So it’s taxable not dividend simple. when consider we payout. quite make that We income our

Alexander Goldfarb

Got it.

next So income then should what how your it it I that get would to just likely go be. Is interpret year, would to up back taxable that?

Tom O’Hern

taxable payout got is. income your you XX% It on Yes, taxable income. to Sure. of what depends

REITs So to that’s – have that that’s a premise all fundamental follow.

Alexander Goldfarb

Tom. Thank Okay. you,

Operator

our next And Markets. Thomas Todd question we from will of go KeyBanc to Capital

Ravi Vaidya

the on Vaidya for Thomas. Ravi line is Todd This there. Hi

in stresses to theaters, spaces use here, forward department the store boxes? distribution looking perhaps or going for centers What’s how is backfill to given Just to company large-format fitness purposes, non-retail these look the and appetite the otherwise?

Tom O’Hern

extent on Well, some I to in his that comments. think Doug commented

the Forever boxes; Goods. of quarter lot that deals of handful boxes. past Sears Dick��s in a boxes, done empty A XX in have We was Sporting just the with

case a We In will – in one we we down at Square cases, and That’s there empty is be Washington and entertainment department Cerritos. of hotel and box a hospital the hospital also the the deal replace our Sears York complex. a a New and of lot Sears to down going knocking with the replaced – with Mall also knock did with that will at Wilton multifamily. boxes, Los be in store some and uses. The building a

and in non-retail. repurposing and do and also It will So a a demand lot nontraditional go deals square format, retail, we the of there’s footage will a big multifamily, it just the hotel but lot nonretail. eliminating of certain go will

Ravi Vaidya

Okay, you. thank

Operator

Greg McGinniss our question to from move will of Scotiabank. next we And

Greg McGinniss

Good morning.

rent you just minimum portfolio have jeopardy QX? down help X% in We of anticipate the heading last us drivers change? the quarter. what be expectation might that installed we Can any on And into the additional was understand from

Scott Kingsmore

a leasing reversed I that for cash basis included certainly has is that been a I some remarks. Scott. bad opening revenue tenants covered from challenged locals was Yes, and, was rental We sure. allowance would mentioned that of down course, a on ago the That This my to did some grant that of component. debt component for certainly a of factor in which factor. as short-term X% quarter-over-quarter. a and assistance, year occupancy say, nonrecurring primarily then, I a reported And roughly categories. we

factors in. So, all that that some will of certainly do that of I think forward. carry

quarter. off, bit New little a through the protracted accounting, cash a very me, when a I a that bit of revenue in will may City properties accrual were the As of taper time you with have to basis closed to these of will those of but some noise bankruptcies basis fourth little deal convert think we period opened time our closed that reversal concessions, second now tenants in especially California more start or certainly with York think of for for excuse – quarter. rental and third either we

deal will are that – So there. a the a quarter. the impacts bit we fourth bit with that of And certainly, on carry may into little little occupancy reporting we

So COVID. like I operating to think of in quarter feel said, will I the fourth continue impacts the the results

Greg McGinniss

associated through a the on just then or if on in across on just first kind then revenues or about statement and QX? income just into flowing was some And bit And the currencies, any that with land Okay. more, of what curious you portfolio, the heading recurring tenants second, items, that two is from think that number was clarity just on expect the particular large sale to trying other then FFO?

Tom O’Hern

Yes, sure.

the will want termination fees kind with to I specific Difficulty] But [Technical elevated. don’t the On expect I fees tightened of a termination certain continue remain to would get in volatility tenants. that

names. fee sometimes volatility, of got able opportunity history prior tenants to obligation, heightened secure we lease of flow backfill fee not and year. certainly for that of in I’m to Land would we want P&L to an to into a termination nice buy elevated terms moments expect have be sales I us specific be get in their to profit to did will FFO. think through to the But where relative last effectively in backfill. going the out termination continue You effectively and

after million provision. $XX roughly was the it accrual mentioned, tax I of As

Greg McGinniss

statement income net Okay. But through it on other the was income? not income to or gains going

Tom O’Hern

correct. line. That’s Yes. the It was below

Greg McGinniss

Alright. Thanks.

Operator

next we Stanley. with the from question Hill And will now Morgan move Rich to

Rich Hill

conversion back and important comments on pretty good that that, Hey is recognize wanted really I I actually of there was early to driver there? trends if the the why I high I terms you the are could really that are that of thought retailers wondering of interesting. to which rates, a come that morning on guys. sales to conversion and also might mall the rates conversion in be rate other seeing in-line maybe the seeing tenant you am side speak itself But some COVID-XX. overall

Doug Healey

lot I that what seeing, think rates can I otherwise. board but we know our conversion are are up, each have feel mall. across more. take in. are mall hearing about talk are it what anecdotal. down traditional are is when or we to that what shoppers we specific of to is for are that the they that’s we fact They traffic don’t luxury jump while buying. necessarily the And not we in as the whether Tom, A is But and free that and going our relate sales converting does much, it’s to retail,

it board. We are seeing across the

they to what of lot done that a they mall, of lot buy a being the there lot for, research it. their dwelling is they get so a know – they when and their think online are of their and I

Rich Hill

us curious, guide is change XQ? be the quarter. a next the Look, going you you of guiding not I’m XQ ‘XX? in to Got questioning the confidence months and like Scott, – for am bought year months think over But what not for next a give little have you, one curious, lot reluctant guide the ‘XX? it. lot three would of confidence that for to do a for to are will next questioning. guide I to full that what maybe That’s is I give am more you think helpful. going more But question over to you bit several in a the happen why I

Scott Kingsmore

Rich, trading with are Well, we our just that over as just XXX our have open and underpinning I centers confidence. retailers, gives progress mentioned, you Doug – with, touch fact the combined number. an tremendous would in say, made a which fundamentally, of That number national

visibility on gaining that Collections we’re So to front. continue improve.

could centers don’t Tom, I of you are anything think what give want the a you all That’s, following add lot to that comfort know confidence. you open that? gives are to again, some you of gives those if fundamentally, it factors for year. the I guidance are the trading, and tenants

Tom O’Hern

retailers. are we we to today think I Well, where have of Yes. at XXX top our terms come

plus We XX% to have terms those. come of with

our I today. COVID get much in guidance think passing mean don’t we I them, earnings creating the even the month, would an so get some more, to be a last XX going and and we than XX forward is days learn comfortable we the a that that’s more in than fourth happen we the looking think eternity quarter to era. with lot give of position they call. the the as better we will going each balance uncertainty of are days XXXX. we to did, to And to And know post-COVID through I fourth retailers carry from today over like that’s in is And think quarter, world, move we more the COVID, in

to to do I think that’s to position some So going by January be put it. able

Rich Hill

eternity. much Tom. anchor Pretty That’s comments. I an really helpful, your And feels like

week feels a Sometimes like an eternity.

Thank helpful. the I on you’ve think the got – really cadence the So comments you. was

Operator

go to Jefferies. Tsai we’ll Linda of And

Linda Tsai

looking tenant are [indiscernible] to expand? categories

Doug Healey

Hey, Doug. it’s Linda,

environment. on in seeing it retailer is lot across board. There We going traditional are a the the

which in this women’s their three Aerie I’m year. examples, a some leisure, new store, with are American concept a is out come has Aerie stores sorry, OFFLINE, called at doing – and Just Eagle branch test they of

this to And expanding. list of for them. went opening real expanding on. fleet they’re J.Crew, year. vehicle Lululemon to going of out, Canada year. have always Levi’s work rollout XXX also out their trying they’re should size. everything next year We Aritzia They’re or them. that’s Madewell store another is stores one and their between whether expand last that a be expanding, is goes public and

Linda Tsai

sense recently lower was I wondering to default you the companies? of any ultimately same filed of if who those counterparts lenders of and two share decision And your what a had the if you drove with then quality

Tom O’Hern

bit. am you broke repeat You I Linda, could that? up sorry, a little

Linda Tsai

and lenders sense if two you of Sure. the any what have to have No, same default counterparts might who companies? the I maybe filed was you just with a those decision quality driven if recently shared possibly of your lower of asking

Tom O’Hern

Is that shared lenders, is that your question?

Linda Tsai

Yes.

Tom O’Hern

relatively unsecured small we a group Yes, It’s lenders. REIT do. of

that are I PREIT, So And There route. think through if I the don’t and public their filings, that group. they is really want had holdout, that very in XX% to think went was relevant speak for their we and went was we support either of document, under process. why they lender them. you a of as informed well – read Obviously, they we with partner the X% are of

expect out quickly. and of in they put have be very, think bankruptcy themselves releases I very to they [indiscernible] press out

the think yes, the But a know they – PREIT. ones they to of defer we were a that we them, So supportive and have, them. of of I I were lot that know will lenders lot

Linda Tsai

change XQ, And in for all? October, that. then in did the collections XQ denominator for at one follow-up, just Thanks that

Tom O’Hern

definition? The

Linda Tsai

Yes.

Tom O’Hern

as have the we collections treated Linda, consistently forward. we moved

So way days XX it collections treated ago. today different than XQ, XQ the we was no the is

Linda Tsai

Thanks. Alright.

Operator

or this at to O’Hern. And O’Hern to I Tom like comments. additional go time, the Please Mr. ahead, for any closing over would back call turn

Tom O’Hern

joining of care. everyone, few in see I am Until weeks. hope sorry. you at Thanks, to NAREIT We virtually for us a today. take many then,

Operator

today’s for disconnect. you call. This Thank now you does your may conclude participation and

The Macerich Company (MAC) 6 Nov 202020 Q3 Earnings call transcript