MAC - Earnings call transcript Q3 2021

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Operator

Good day, and welcome to the Macerich Company Third Quarter 2021 Earnings Conference Call. Today's call is being recorded. And now at this time, I'd like to turn the conference over to Samantha Greening, Director of Investor Relations. Please go ahead, ma'am.

Unidentified Company Representative

Thank you for joining us on our third quarter 2021 earnings call.

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

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

Thomas O'Hern

joining Samantha, for all pleased impact COVID, report no almost very and to quarter After COVID full outstanding today. battling with of an thanks place. of we're almost you restrictions related the in to you, years navigating Thank X us

As very results. morning, pleased you strong this report read a to in we operating excellent had our X-K we're quarter, and

demand. retailer huge seeing are We

the seen to a Retailer back purpose, come XXXX, compared with is have are capture demand level roaring the gains levels the at past XXXX. shop Sales as see quarter. into and have than a momentum that we X we double-digit is U.S. continuing a with not pre-COVID shoppers carrying exceeding Our pre-COVID. since are and fourth rate consumers to quarters in higher

the traffic to traffic levels. XXXX of is The expect XX% level continue We over current increase. to

had gain the the end, was occupancy include: quarter. At that's basis top point in of quarter quarter second had of on quarter on our XX points, gains we of basis the highlights we second sequential basis, a XX occupancy and Some XX.X%.

prior of We're X% quarters. the in $X.XX, guided the demand growth very we the year million there, saw XXXX great million for of the Year-to-date, the fourth XXXX level quarter full a X but full double-digit fourth compares leasing quarter quarter FFO levels. year to NOI our to obviously to increase feet, have the of continue range depth leasing quarter raised leases the about has ways million as level feet. last on optimistic we've optimistic We X.X guidance square We favorable of and midpoint that but XXXX. same-center for we're go quarter, the square very and with executed top of XXXX We the breadth growth future. the saw space, robust quarter. of leasing about past and Once feet seen us we've in volumes over X.X progress. to full making XXXX include we of year exceed both excess of square not The and were will high the in only XXXX year-to-date, the a increase the volumes and XX% expect in fourth X

comment deals. Fitness Doug Scottsdale of Broadway will the And Plaza, Plaza in a bigger and on Fashion just Kings to and Chandler, Plaza of Philadelphia, Nordstrom at leasing at is Lifetime replacing Pinstripes deals more Sports of include at larger which Scheels District Acres, Square. Some activity. shortly third detail signed Green name the Primark Target, All store at recently at JCPenney, mega to the Broadway that's quarter few Primark replacing Fashion and

Polestar stepping getting retailer active back deals, low to during space, In bankruptcies digitally and companies locations addition after accelerate with the our space in expect is electric space a to new environment are interesting of native on to for and to box of car in very down a our greater mall format many smaller Other continues taking With malls, for Lucid. host level nontraditional COVID. traditional which including the Many strong, demand additions brands include excellent big brick-and-mortar we demand carry of into retail retailers back record pre-pandemic. even this an than leasing with demand XXXX. again

were Although that trend itself upcoming the to we slightly, expect leasing down spreads reverse in quarters.

of strategy our continued also we quarter, assets. selling the During noncore

of square $XXX sold and $XX sale another significant discuss and improved We of turn our strong leverage transaction is debt net operating net for noncore on to Mall, through metrics. of to both of million. turns, asset from income have about reduce capitalization XX%. The a were debt. used Encantada, lifestyle the balance the to we which we've $XXX and only financial And year the the XXXX Macerich Valley sheet flow. That detail it cash results very by more the to for net Tucson, leasing open into debt quarter. market by builds cash in made we've in over moves significantly I'll proceeds We're the yielded cash over full debt sales two gains Scott now down getting The month, proceeds our in in billion environment occupancy, La is generated over EBITDA in the to but paid optimistic foot as XXX,XXX better business the balance $X.X center and expect XXXX. and quarter, we the Paradise net to move million Arizona. reduced Not sold gross. During dropped we center XXXX The air of million. March to Phoenix, Year-to-date,

Scott Kingsmore

Thank you, Tom.

share of if XXXX still higher quarter income. third was We termination lease increased third consensus the the NOI exclude share third decline XX% $X.XX the posted of lease FFO the estimates financial of the was XX.X%. the same-center to for million XXXX to of quarter than to quarter operating in X% $X.XX was quarter. XXXX. we for same-center per and from $X.XX extremely relative of termination This represents results Now the operations for third share. at from highlights XX.X% from $X.XX. of or at increasing a higher $XX including per the on per at or of third third XX.X% quarter of XX.X% with the quarter strong XXXX. XXXX, increased were has third the X.X% end to income, results quarter the of the EBITDA $X.XX quarter XXXX Funds And quarter than margin NOI

our now third transactional of the included factors timing XXXX; in of third result follows: in lastly, lower explain, $X operational Consistent leasing we the the included: X% our then volumes contributing income X high-quality earnings that income Primary of totaling line status $X.XX given resulting a NOI during leasing quarter reduced to quarter our last centers quarters, by soon Doug in the expand for and gains and previously increase portfolio to decrease $XX and quarter this a from the is XXXX. be year and today the to and This and which quite upon; as extremely range. This with on another $X.XX; two, earlier debt of was improvement due FFO expenses from our resulting previously area of occupancy that approximately or we relative quarter, or our dramatic share, early strong decrease FFO increased throughout quarter is significant and very $X.XX parking few reported FFO sales robust garages. of by generated proven NOI full factors issued per over of abated factors estate in in to the stock quarter $X.XX will XXXX million by a per a the increase of in team resilient portfolio. quarter. $X.XX million million one, urban the updated comparative and third of these of will As programs, XXXX NOI versus including three, and Doug nearly the increased a guidance decrease a gains relative one, past front, a share, common shopping million of a by $X.XX our soon in bad common or continued rental closure And third XXXX the paydowns as year, common the from included FFO or our and $X.XX or ATM up percentage sold real what $XX $X.XX to through straight to of our quarter town a area quarter are was increase morning, offset was exceeding we million FFO, the sale the land $XX NOI as debt reported of included three, share X% significantly estimated center resilient elastic portfolio last and result. increase quarter or rents Offsetting the or has and to This were a in contributed two, earlier third XXXX landfill expense driven other partial many rent midpoint a and business $X.XX. interest $X third to represents in range quarter-over-quarter; these count of expense quarterly due XXXX closure decreased a is issued our expectations. FFO guidance has represents $XX our the

is our within While from shutdowns issuance is assumes further equity supplemental balance no assumes our of and this operating increases guidance issuance certain no common of previously anecdotes. that range faster and further this further with environment stock are filing earlier only expectations NOI. the of an than and guidance properties, here some provided increased million $XXX mandated are better reported in reflective guidance is the assumptions same-center through morning, This of our prior This common retail of year. to it due improving

on that the guidance previous assumptions calls, likely XX the XXXX. And financial on are half of double-digit we As I information. And -- Page to XXXX. is the the included NOI reported levels growth surpassing details X-K we just the quarter expect strong X supplemental same-center of quarter, for company's in the during and of third the second in fact, we balance playing the in Form mentioned strong fourth More of sheet. in out on anticipated growth now quarterly

we XXXX, debt. continuing of million repayment in of debt. in resulted balance those have by Arizona, the Encantada our to $XXX the in approximately repaid our of part a which As sheet, third In billion of buoyed Tucson, efforts La were $X.X quarter, approximately deleveraging sale commitment of

of In Queens, after and leverage New previously to expenditures, to to supports relative are environment, operating we York, existing pleased no very last the the years, mid-XXs on at outlay. a markets aggregate Atlas regional maturities. exceeding stated, liquidity progress of secured and at a the $XXX each payment in cash heels which, quarter, refinance addressing Colorado. reduction leverage a of refinance take next million This Crossing, commitment end flow enclosed $XXX capital per which quickly X-year X-year we these to today. the dividends capacity is both an we shops the currently out path lifestyle have year aggregate, a FlatIron on $XX Park, $XXX million credit, expect the and standpoint, improving capital Xx the XXXX. generate of improve As Center of passing we with the few closed negotiating incremental will Including in week, near undrawn over capacity of continue million our free with COVID. end near-term we From outstanding, recurring on a a loans to capital by only of XXXX currently of with debt Broomfield, are approximately of The with loans the for Town line financing a revolving $XXX approximately million million million center $XXX continued

it And As we debt positive I a sequentially discuss number to turn progress Doug of continue we favorable of within the see capital the to over leasing will environment. mentioned, now retail operating the terms. growing with and to execution on markets have deals

Douglas Healey

great of as high mentioned, a the did level. little Scott deeper. highlighting leasing and activity And job Tom of bit a metrics in dive at some Scott. Thanks, a I'll Tom

to continues So leasing levels. productivity pre-COVID environment improve, leasing XXXX the continues to the and outpace

XXXX. and food strong strongest fact, including on top is for And track were sales and very were we're a and all when year this July compared September, since productive on up again, beverage, Sales September In our XXXX. XX% positively. September of in August. once comped to leasing categories,

quarter second the Looking quarter. quarter third on That's were end XXXX. at third basis the versus Occupancy third up the of from sales up and points the over end being was quarter, of XX quarter XX% XX.X% quarter at at XX% second the of up this top XXXX, quarter XX.X%. is the second

stores Within retailer, points moment, As the anticipate spreads Scott a pace year from minus touch XX,XXX continue leasing and with of signing will the XX.X% past exists third filed healthy and $XX.XX square only into bankruptcies given levels occupancy just a bankruptcy. was to as And mentioned, year-to-date, XX, X.X% And to is XXXX. that our on as on occupancy XX, remainder minus for X our XX-store increased of quarter. And just The September totaling months, down portfolio throughout and that's Average an when the continues we've we rent September And Trailing that strong XXXX, of beyond. environment over the X this increase one compared basis since XX-month feet. package leasing seen and $XX.XX our as this quarter, a is XX, has XXX,XXX last XX, X accounted this rate to of tenants result June the to these relative XXX in the today, X X.X%, portfolio primarily with pipeline, remained over March XXXX. feet. of at portfolio the square $XX.XX were occupancy only which we'll XXXX. increase In lowest XXXX of bankruptcies for within decrease. portfolio, XXXX. tenants for coupled retail

XXXX our the in We our continue letter XX% on have expiring of balance stage. another of progress with To footage expirations. we date, square great on lease commitments make X% to intent XXXX or the

for opened XX% XXX,XXX XXX,XXX new about new notably, square footage annual we which of third In wing square luxury it's the total stage. in rent during than state Fashion flagship Most the XX% is As store first openings. Scottsdale million. more letter at stores Year-to-date, expirations, feet XXXX. opened spectacular Square. of to square our $XX.X XXXX the in Not square in X,XXX of the Dior feet on opened but a is only XX% expiring the of of the we also period July, we opened footage to in Phoenix commitments and lease have Tenant we of square intent X-level the first same Arizona. foot Dior in market resulting quarter, we've stores,

District fact, continued store The that XXX all In Phoenix, in or Scottsdale addition destination away early destination since. is volumes in Philadelphia. the Vegas. Primark miles days Street of is and located be oriented and premier corner ever District the traffic arrived the Primark Shoppers and September, In square word. already in area to the late. marks further shopper Las every opening XX,XXX Freehold solidifies trade store store they sense of grand is Fair, following Lines store Arizona Primark Kings XXth remained of stayed This high Dior and closest increase Fashion our Market that of foot FDP's had fact is with dwell X-level and true will at luxury in its expected anchor Raceway Fashion fourth for time. and for Plaza. and Philadelphia a elongate Mall outside the at the matter. to Danbury opening continue strong is

have at and open also leases will respectively. Acres signed open Tysons Green Corner XXXX, and that we to addition these XXXX X In stores, with Primark in

XX Shoppers large-format As regarding such, opened a opportunities. in continue other XX,XXX ongoing opened the markets several quarter in square last category, District we largest in Primark's Fashion the Staying to at U.S. and also we remain this the Century location. Shoppers location. in with foot Philadelphia And that is former Green World key landlord and XX at World addition the Century former discussions Acres Mall

bankrupt Century and So now locations occupied. we have both our of open XX

Other at also Laurent notable Kids Pacific Fabletics SanTan Ganat, People We of [indiscernible]. Movement Less Chicago, and Plaza, at square Broadway at XX,XXX and fashion View. Dress the Free foot quarter Saint opened square Empire at for foot third Ross Fair, Danbury in Roden include outlets a openings at XX,XXX Village a

native at Square. Buck at Washington quarter, stores digitally the Lucid on emerging Lastly, and Scottsdale at Mason Square, third the Marine Broadway Los and Plaza, Cerritos Motors brand was In opened Layer Fabletics X we category active. Fashion and and

XX% Now In in the represents XX% of quarters total signed first at the leases let's signed $XXX resulting Plaza. more quarter. look Brunelli at in flagship signed XXX the at Dolce period Jacobs in and pre-COVID Broadway third XXXX. in we Square, third XX% Gabana annual the in Corner, million In XXX Notable leases, square of and in and square the at rent. we Nile quarter, XXXX, Scottsdale million Cerritos, feet, at and during leases new GUESS more This Outlets square rent. store million a X,XXX-square-foot a we expanded Originals total Tysons footage Chicago, Aritzia Lululemon signed third annual same feet, and for X.X X Fashion the in million resulting at Los include than Blue for X rent leases leases Fashion more quarter & $XX Marc

We X we've Windsor XXX,XXX with We we compelling, lease JCPenney In so deal the uses. Acres, square the X-level Sports square replaced the and Fashion. a Plaza a XX,XXX location. All with Penny stores the Fashions in package lost Chandler for at totaling we signed we Along foot productive did their and Shields Green during a with only our square foot from finalized now location at bankruptcy, relevant large-format Kings for store also Target category, for X-store with Primark signed the at former lease XX,XXX a JCPenney executed with feet.

with Biltmore and square addition at marks And entrance Lifetime Fitness deal also to in luxury the Scottsdale Fashion Park our this our Broadway of new signed wing. Fashion We Lifetime a Plaza. at third foot XX,XXX

our We Plaza. also deal Broadway Pinstripes signed first at with

outdoor For music, concept and bring to Area [indiscernible], It those will hip a cool who Broadway. live XX,XXX Pinstripes, square first will aren't featuring of excitement you in it's great Bay indoor, a and and the very foot bowling, food. familiar vibrancy with be entertainment the bar

Fashion Lastly, the at in the at LEAP Northbridge, Towne category, we at Place. digitally Madera, native with emerging Monica in and leases Corte Fabletics Scottsdale Village Polestar of and brands Santa signed Square

XXXX. still of leasing Now new XXXX, quarter. pipeline the square the our in X.X feet still had these and early We for currently square stores to feet, XXX,XXX leases open in to turning in end million negotiating signed leases stores to signed of will stores into for leases, new feet looking totaling third open we're to open. the new another to which XXXX And addition XXX,XXX we've XXXX mid-XXXX. leases or signed of of square at for And and majority

into total, in XXXX leases, and remainder store this year, over XXX and throughout X.X So million that's in-process of square XXXX. totaling and feet signed the new openings of

multitude to XXXX. it over the by XXXX signed of to the expected at trending to XXXX. and its the Q&A. and This year, pre-COVID. nearly So level significantly pipeline for in increase remainder conclude, into to yet I'll to their continue reduced operator this is up tenants are with Occupancy of is is open lowest better And velocity this XXX vibrant slated leasing they were which now and that's And watch to significantly since at year past exciting leases, basis Bankruptcies and quarters, open list. and the year is resulting call turn sales are throughout X XXXX, strong, this our and XXXX. consistent than tenant into of we over very the up points highest a level since evidenced

Operator

our take with Sullivan from We'll Jim first Instructions]. [Operator question BTIG.

James Sullivan

and GFC. financial to that end I XXX the to gain quarter think achieved points have time, leasing the deals analogy about -- at X regain the crisis, you back with look question we made through roughly of after and you've occupancy great X the it basis the of that rate years for the first come, the prior the loss recovery took to occupancy when you've in at the The progress third to

some you be how the to know, just I of driver pace not XX%, take don't portfolio, a to key loss greater. expect the can of here, it's wonder say, back asking said of us, was getting to indicate make to, when greater but And to you long the that back Here, this can -- strength as forecast about think The you've a give XX% you to time? And going it's know recovery you occupancy time it frame? well. I at quicker, a the number portfolio, and us Tom range, vacancy EBITDA. to I seems be I'm help get the if obviously, you Doug, but

Thomas O'Hern

X were the pace. a occupancy think can quarters, of we we pace, And 'XX. see I look up if way, in we the saw that By we the ahead with some keep but years, is everything on we'll volume, big levels by financial last think us and we more X I pretty you're correct, end in the pace crisis, Again, Jim. the after it depends like think and it we is great And what the than years, in XXXX Sure, today, Yes. in we be rapid pace pre-COVID. we've tremendous back at X.X XXXX, recovered we and that at on what seen something that. demand of the stay

James Sullivan

question Okay. And then me. the for second

as can this can were you from may doing? big comfortable important Primark portfolio more isn't to not obviously, Primark a as legacy necessarily department with and come. know deals department that but if before specific mentioned the versus us numbers centers closing? kind get big of And the I store box without your compare in disclosing transactions those notable just And You going us successfully those that help box, per foot into a help stores taking kind I understand what of be Primark you that legacy revenues -- with you several started wonder the

Thomas O'Hern

Europe rent. of the what traditional Don't rent, pay much do over take a mean store. I same the department were from They're size Yes. version traffic more bigger paying come in new. They we've The a driver. seen were for department They is notorious stores traditional as past. not a Primark frankly.

And so better, and think to continue continue gain the they're we and to to momentum expand. are going economics

anecdotal and the our guess I traffic. ago, of we few exciting. has of though weeks people on fully a when are a even in that bounced So store evidence lined back there latest that city to Fashion opened Philadelphia to District is not up get lot and Philadelphia yet,

further my Doug, department and can So It's you view. elaborate, but those add of that's than a much replacing. different been store type we've

Douglas Healey

The anchor only draw that And as add, it trade the I remarks, way to stores, Tom, of our is mentioned my outside traditional stores anchor in would be. trip. like they while a are elongate does maybe the shopping anchor act does I Primark as supposed as store the and in big thing traditional not areas, do traditional

many we're So bring thrilled all with intended here deals it over used do, it. to really them is stores the do doing and and were to to look doing and what to more anchor traditional forward

Operator

We'll take Deutsche with our Johnston next question Bank. from Derek

Derek Johnston

Kind on last the of expanding question.

length clearly, the to and pool vacancy. both are near-term likely discussed various or the are anchor close of same-store due Primark out openings which So announcing, others, of you've closures backfilling to

example? they're JCPenney what annual new Sears be benefit mark-to-market getting? a trending say, how see Century you a So can versus, lastly, then And an give economic XX, for you once open or you're leases? perhaps with idea or traffic seeing a the may the or us escalators you And of the do

Scott Kingsmore

depends to Scott. same replacing box doing are to uses from simply tearing Derek, would in as say things it same depends pool. I to box what's perspective. they're the mixed-use really within this broader the or not the that Those whether a on It as something center we're the the pool. opposed and extent down really is center happening in

major entitlements a at, instance, we're considered be turning allowance be we're bit we're for wood in say, In add and and wouldn't center. have where to probably That space. mixed-use through or GLA. appendage would to to there's that those retrofit as consider the We occasion going substituting the campus. spend, a included to deliver development little Los more Primark JCPenney, you know, To extent on where, center. development That box them going a down with of Square, be a we a Cerritos be before same being for now Watchman we a a instances work be heavy adding pay non-same-center. within right the would same would So tenant

In terms of of can well. -- to as you the repeat maybe touch on just your second part that question,

Derek Johnston

Yes.

Just improving once versus seeing the you the how economic escalators clearly benefit they're legacy traffic mark-to-market or you're any new with the leases, and view open the boxes. perhaps

Scott Kingsmore

Yes.

we're just side think getting I typically no on to The on to the of mark-to-market, rent of minimal paying comments rent without low expand Tom's just levels. on type anchors, terms rent and very the in average. specific rent, to mid-single-digit

with these us. be precious, unless is getting these rents deals. they economic made and capital we big full wouldn't And box obviously, making associated more we're for moves So sense

So positive on our cost. yield a there very mark-to-market and nice is a

Thomas O'Hern

and traffic, more Shields, traffic terms have I in of significantly then sales. Primark, and Target the significantly going more likes JCPenney And of Sears replacing mean, to we're clearly, and with

commerce tenants is new compared those generated greater the the to boxes have to going So that's from with and be vacated, those ones far Sears. including that Penny

So we from many and of multiple Primark, sales and traffic Shields. times Target expect a

Scott Kingsmore

you that be in makes the talking really two the excuse up about space, It's only of at me, the we're the box more or the Shields imminently may that's valuable, It to reletting we Primark all it. on mark-to-market of able over point note. the coming Shields all mark center or up. space on next target. that center to to X not And we years the it's or given leading to coming you think into the space when sell think shop anchor deal. around as to space online It's levels, any a And important an and of the

Derek Johnston

co-working, other Are sense. whatever it helpful. transformation, you JV makes repositioning less thinking really and you're perhaps Colorado, also the was maybe or to And is share then accretive? do how FlatIron entitled as this you That to Anything a approach how considered? a being in meaningfully but Yes. looking you'd And structure projects my And may would well. and where discuss partners question, plan capital do little be office experiential, about the recently second component be you there solo it? mixed-use can residential what be with the intensive

Thomas O'Hern

we Yes. the also land to in residential But as portfolio FlatIron. good into and ways some have could of capital land, deal. entitlement developer from do is a process do of to on version, take Washington partnership through Scott discuss our are at densify and the ground or position based the light a effectively XX-XX the of that, We on through I'll Los approach of straight contribute a land and up or mixed-use could that. value can which the do is developer. we we developer, And Square, boxes have lease can the A We a the to the it variety go a examples where goal mixed Derek, our kind of and use, global get now. opportunity Sears details with we're couple going we replacing wherever diversify Cerritos

the ways different of on that individual the depend of achieve. lot we to project cost It's type to going a on return there's and can approach So it.

Scott Kingsmore

adding same, envision from well of as and and could restaurants a economic then building patios. on much what picture nearby hold The we're multifamily specifically, the as during for use. likely and office. than FlatIron think well on dark do market Tom would have side, the our by road we about XX well some And to creative as further and box. Nordstrom Derek, we We an as down restaurants surrounded as like anticipate an very contributions we -- a insatiable environment will where to Boulder box multifamily the our both And assessing mentioned, and And advantage a land positioned of entitlements demand. into you COVID They to add converting entertainment take closed we by has tech JV contributing miles and is events that marketing received sense more with do multifamily there place that the demand office. be

complements So entry the new property. attractive very the existing that

Operator

America. from We'll Bank take with our next Craig of Schmidt question

Craig Schmidt

it intend absolute must returning property Given of to square opposed pre-COVID And just when number the I you like sales does might number sales per to foot foot to the wondering per square Macerich square level. foot was per return you sales that back metric, by the trend would per to your sales pre-COVID? foot seem showing start reporting published trend? square be table as ranking

Thomas O'Hern

Craig, still the to ones sector frankly. is Answer is determined, that. the question. We good that in be did that a only were

a proprietary of to leasing So we a was consider of it's it as little here. other we'll disadvantage and environment. COVID the as it on related But transactions something side bit the get

Craig Schmidt

holiday already then supply the from November, is narrative like standpoint. holiday from dissipate. terms about entered I you Okay. concerns season disruption for chain of Great. 'XX? the mean, starting we in to a in having And are their -- their hearing enough stores seems It December the What stock retailers

Thomas O'Hern

Southern up up California in the comes to -- frequently. ocean obviously stacked I into that a the mean, based It's get port Los we of freighters and trying Angeles. seeing topic Yes, the

an to hit Our you that. have a way earlier seem been by the most harder as their retailers supply to their the we to rehired. issues. tell to lot in seems from Craig, don't truth, through them have of complaints seem And of hear getting They chain worked force is adequate approach the season. labor they these be the the people the for holiday retailers issue about challenge That getting chain biggest supply seems bigger days

Operator

take Khanal Evercore our from We'll next ISI. with Samir question

Samir Khanal

us Tom, I from plus a you gain an very also mean, think which year valuation this likely fee or had FFO Scott number, you won't term growth to high you perspective? year, for next had repeat. how about understand can the help

terms a of there think mean to the of FFO up off maybe we of it need of I growth? So there's But else clean number, growth? building portion blocks for think next for to is the year. pick we should about in anything that how occupancy clearly sort about

Scott Kingsmore

Samir.

that flow strong, on a operating to in without expect quarter, the But points. the do noncash. expect tenants anniversary straight-line guidance. we think that's be touched growth. third a of to cash it's first growth Obviously, we we side, lower. any share in do into on abatements expect of few it We'd be the we be the through but year. also year I count certainly the do that concessions expect year. You which was elevated [indiscernible] strong we first flow we and giving increase cash that an have would we in rent, and We don't expect of would of XX% expect because that would positive next this a going carryover to gave the to of reported half half XXXX. the a Obviously, substantially

Samir Khanal

can you this And about a is occupancy could I and throw terms portion, are you're year? you think you of of there maybe next that thinking targeting kind how sort of where guess year or out occupancy year for sort on of sort of guys the in year-end and number

Thomas O'Hern

said on quarters the up XX I an Well, Both of last had the pace earlier, again, depends as X points. it quarters. basis

quarter in you and tends achieve retailers fiscal get We're quarter So the for the holidays, to get to they're by close we because trying of of to XX% little be fourth the slow are But leasing XX.X% if it year-end. the open into out to fourth bit -- last that assume wouldn't a to now. -- moving their quarter at question the year.

next could So the we And then still X that pace taper and -- the continue. bit even to quarters' is from leasing could year, get a we little last think going there. off pace

some end next XXXX. us range So of -- pickup XX% getting year by the good to seeing you I think XX% as the well can see into and

Operator

from next Point. with our take Van Compass Dijkum question Floris We'll

Floris Van Dijkum

I clearly, guys question had the big a [indiscernible]. beneficiaries. on you are leasing

think mentioned, percentage high, and rent well, we your sorry, as overage next -- million. was think term is year -- portfolio tenants as temp $XX of very Your as about current What you what your that in next you numbers. presumably -- your of leasing, when how very into little season going were and specialty year holiday is particularly you into last there year, going about do the your percentage

Thomas O'Hern

and pretty to include at XX% XX% advertising. not a Yes, that's makes And that's our NOI. point traditional especially long-term It It would of up, broad and in time, category. any would leasing, it include leasing, top I most job the we drops that of bottom line. because very related we of quickly in getting revenue than filled good space And rather to line got right pretty to NOI bankruptcies did vacant when the a XXXX. anything

permanent less to more folks. leasing for overall the so And be up,the permanent to continue as goes level we leasing, going lease goes specialty do percentage inventory up, there's the occupancy

a temporary actually a will will strong would that think releasing move done that It permanent a to I that big space from space off little quarter. So in the bit. fourth XXXX. but expect lot to I be job in taper good We've space, space of

expect would with specialty that of taper the growth or I to development off. so business And leasing pace

Floris Van Dijkum

And you in temp today more normally? converting where sort are How into upside occupancy much are tenancies? where of firm that is there versus you in

Scott Kingsmore

Floris. right mid-X% the now basis. temp Yes, a in range Scott. on We're occupancy on

driver we're I will that, mentioned, closer XX% some expect demand year. would do will tenant we'll Tom a occupancy important end perm rents we the course. to the temp of by for of are that move that into as to XX%, occupancy. As I would typically temp forward an think permanent up start what the be. subside full-time It's that, of to us, XXXX, seeing, X% convert of given tick The to that start But

as saying team's As in given say, group business. our volume we're affectionately leasing into 'XX specific move leasing, we specialty out look, leasing. that I'm headed the going fractionally is of more say Doug's 'XX. goal and we're not we're And permanent to to direction ultimate seeing, have eliminate job I that and think we but job is Doug's

Floris Van Dijkum

Is between lease Great. the are to assets. that? your I the color would percentage give is behind spreads, question some with I'm any have do may be consolidated what there on And -- curious was your noticed JV there for you any more maybe marginally driving us and And Obviously, But rent that? follow-up And was Or well. if assets overall That have I spread more one -- your helpful. some negative instances? in that. partly difference can -- you as anomalies that taking there's quarter. a

Thomas O'Hern

quarter-to-quarter are fluctuate can leases expiring what done. deals on what mean that new I and get depending

a Historically, that's So always bit. our had we've bigger JV. of to a in be it spreads JV re-leasing assets the can because tend lot assets, vary and bigger quite

I some Scottsdale per probably historically, high Tysons, been very continue you example, we'll JVs. type those to If sales case. And Fashion of the foot assets are think case. think see Square, for have that's And that that the

Operator

with next Morgan Hill from We'll Rich take Stanley.

Richard Hill

leasing the per supplemental. the you just I the than average the X.X% it's I'm hoping to negative disclosed maybe bridge delta help X.X% was -- the negative at more If square rent could remarks in in on executed it looks expired negative leases, the base us X.X%. prepared spreads versus like looking foot

help So maybe us those just to a numbers. two understand bridge

Scott Kingsmore

compares over leases Average expiring Yes. new XX the over the is rent compares The rents leasing relative that months. leases. entire base It includes that a Sure, metric are base last rent, rents Rich. months. to the population, new for all spread XX

And same-center so metric. it's not a

is increases. year drive last -- which to again, have can the of rent, on population course, comparison versus between which -- based population fixed you clean necessarily think don't base a real average grown would over I relative just So entire entire that

[indiscernible] compare can comparison. months excluding that you XX just sample. XX-month Again, think that a lot I that less that renewals of were than a months. to sample, XX

Richard Hill

No, same-store. that's were reason was The is your I that their noted helpful. spreads one of asking leasing peers not

So I I make just sure understood wanted to that.

question was overage not I had these second structured. rent. The about super are how I'm sure

structured, year? robust stay love I'd same but don't And maybe percentage you threshold these was rent I at say, accelerate, how they're Or does rents? give sure some sales that. stay not some the lower more could let's lead levels, step insights. insights the I'm your and so next specifically, on does So hoping up just us to percentage

Scott Kingsmore

Sure.

forward, down. a certain leases of see going fixed see only rent that any into would roll. access we leases assuming tick Again, of percentage sales constant convert a you'll portion constant down naturally Assuming we as as sales, But in given year. you can that rent tick

we ultimately of really But to really, of with it, COVID now to tenants that paying sales just just at break. there's have that a you look, lot that swath bit it's modifications a we have causing really, rent. outperforming there's the are wouldn't larger this Yes, did. a terms In more driving are little percentage associated the I what's level of -- just mean elevated some breaking. look as a really are at it, and some anticipated tenants tenants we of

Thomas O'Hern

percentage That Rich. being rent, of very a tenant pays that base small our percentage there's said, overall

it's than rent. our of percentage think I less XX% paid tenants

you're up much weren't So base. But there not quarters, you we've fair there XXXX. push it's of rent certainly and of as in percentage as number into relatively in that a tenants when the XXXX small a last up been couple

Operator

from Tsai Jefferies. next And your with Linda

Linda Tsai

companies You how Polestar properties. the Does discussed electric this car productivity then to many your like leases sales have are earlier that of you currently? Tesla significantly did? And company car the your your have malls opening increase portfolio at potential electric like across

Scott Kingsmore

terms in I'm that They're really not Linda, an sure a deals question don't sales. different brands done with. know know have We product. pretty we've good probably they And the that's yet. exciting. yet we So They're X and either interesting of

kind in from It think of more diversity a to in it's the and And that came had a permanent basis. interest a had things them excited handful good see But place, frankly. demand. on we're going we've they traffic. of great. fairly space. of quickly And the consumer -- it, of went for and there's brings that. I quite response that and seen brings to a mix, we're includes It we've examples come tenant to that they bit Madera, into about more example, And And Teslas. such Corte a think got I at a in leases about temporary Polestar XX we

But of whole the seen. I they electric country kind think vehicles. be is is direction to a what to remains sales of terms frankly, going, it's In do more

case, fair fairly the well these one this are of Volvo part owner them is sponsored. of they've a point. In And one of behind of got at amount companies, and some capital

Linda Tsai

many you us have stations across how portfolio? you EV your charging Can remind

Scott Kingsmore

do charging stations at fields I'll are say, -- majority now properties our -- charging XX% of have at stations. parking vast have We our a

Linda Tsai

details any are Got re-leasing any spreads, a of it's it. like deal. retailer? Or details And this any pretty -- sounds a then it could or where regarding Just the on Is XX-store new there they is you type be -- is there a legacy? like, provide, impacted that might package more it opening? significant

Scott Kingsmore

as that XX, It's fleet, to the probably for and of added were expand their high-quality XX they're this opportunity retailer get specific. had an lot using of existing names to into an probably that can't better obviously accomplish we've years, a We part basis XX really a able XX to deal there. beyond out space recognizing and points that, there's occupancy. that of But we

Linda Tsai

And the any quarter, quarter? abatement. rent last Were you there rent abatements highlighted this

Scott Kingsmore

I'm Linda. thing. pleased negligible, to the That's positive Very say are a that COVID negotiations very behind us.

very So small. very, were they

Operator

JPMorgan. from the take next question Mueller, We'll Mike

Michael Mueller

seen, was across the XXX geography you've increase that asset and productivity? occupancy basis varied For points how

Scott Kingsmore

the size, only XX board. But talking to across board, our terms board do the want of of not the the across activity XX%, about XX%. new I than was mean, deal was when there terms It board you're terms was and you across obviously, let's was you're the been bottom about top expand? there the assets, better across assets, was geography of to diversity Doug, it in it's relative less It productivity. And category. have in we in really say, of in if there -- talking

Douglas Healey

traditional matter, entertainment And you you're so everybody. you're in and right and we probably coming why crisis to transition still one when talking our breadth exciting everything not it's I financial going why is occupancy but traditional out of a than the quicker, we are the see see in think for great about shopping although Scott, No, we for lot think on, that beverage of reasons uses going to from the Tom's we now. I centers. and because that's our this -- really centers may And be of we're anymore, business town as mean, I goal but that's rebound leasing and retail, start occupancy you're right importantly, point retail really of have, the did quicker grocery layering drive traditional that and earlier, food into malls furnishings to home

Operator

McGinniss We'll hear next Greg with Scotiabank. from

Greg McGinniss

a me. couple Just for of quick ones

First, how base does for account average rent the signed portfolio percent average rent or the leases? ABR

Scott Kingsmore

rent base in doesn't average percentage not or rent. in does average base just factor rent factors It

we it well. just were spreads And little we've the up of for relative increases as include likely bit if a would obviously, to, show instance, similarly, on. would last the year improvement So because leasing this to be of percentage time rent, reported

any quantified -- We not percentage that, It does have not include rent. but

Greg McGinniss

base is those lease Okay. portion of rent it signs? But including the

Scott Kingsmore

Correct.

Greg McGinniss

And on then All expirations. appreciate Okay. helpful. I color right. the Doug, lease the That's XXXX

square the retention leases, on how has for compares Just foot then lease curious to space And have, that is historical guys pipeline look that vacant? of been much to that the GLA how million expiring you relates that what versus X.X rate currently averages? occupied

Thomas O'Hern

deals? question of your Greg, versus think, was quoting I percentage the So what deals renewals that we're are new

Greg McGinniss

just for going that much right, how for Well, you is on, -- was space? it's sorry, that occupied the of how more then that have sit currently much portfolio? into expirations or the for of expirations, understanding did the pipeline, And lease the XXXX left

Douglas Healey

a leases. don't It's of exact then combination I leases definitely renewing and expiring but is leases we it expiring Doug. the think new backfilling breakdown, have with

Thomas O'Hern

it's of bankruptcies. little renewals, rash of out COVID coming a XX% X/X, It's higher typically, a XX% as But roughly Might new. the historically result bit that's what about been X/X. be been of

Douglas Healey

higher when number And beginning are that the in or mid-XXXX. 'XX do opening need at you or you a the you of think pipeline, look have about is vacant order I we're to spaces. pipeline talking would to little leases if end about in because say probably just that bit And the that,

of So in I was or yet it towards I to X% place. would to leases. We're leased say economic the And higher question, part about is you that than versus of Greg, about, asked not the physical. second X% your expiring skews think does it vacancies leased occupancy

so And space typical our impact X- there's trailing for a X-month about to of always a -- build-out inline X-month space.

to start until benefit flow cash rent, next that of see to some the year. start so will not pay And we'll not occupancy

that So though. X% there's to lagging X% about effect. always It's

Operator

with Citi. next hear from Katy We'll McConnell

Mary McConnell

XQ understand may us the which FFO from implied there the to you help Can are the So bridge holidays? to reoccurring? XQ any within be other pickup of XQ be sees not larger that from factors usually level, aware a

Scott Kingsmore

Katie. Yes, we'd fourth the third guidance, Yes. the midpoint quarter ahead sure. At be in to quarter. of our slightly relative the

realistic third embedded at could the possible end end it's to Keep sales think midpoint. midpoint relative mind the the where are elevated that estimates than it's up quarter. continue very up in pace. we current if income the lease in provided the higher that our look, see, the quarter, happen was the within higher relates we fourth the termination But sales that quarter midpoint than As range the going upper relative in some in We could we've of of to what can towards broadness broad and think made to fourth continue a pretty we current sales really you range range. our end we've could directly sales, end trends, up at to

staffing. So is that's operate is got another factor. expanded And our to We've not nature holiday shopping seasonal fourth business, the then expanded third quarter of hours, expensive like the which centers. quarter, the more our

a things that the and security the some more snow it. fourth quarter run and means cases, in utilities just staff, So business in staff, expensive housekeeping seasonal maintenance like becomes removal, more given nature of to

the in other factors you of mind. So some should keep that those are

Mary McConnell

are improvement about to today? you year? the how increases. Is a structured leases rate expenses, to OpEx is below that outlook can to since for of still trending expect see improvements to point relative would you or your on the And talk the recovery average reimbursement an next date more being function of Or

Thomas O'Hern

Katy, of level. number We trend to ago. going a that, Yes. years fix of cam with Part is switched the just occupancy to

are going fill we and come space so occupancy closer to our normal we more more XX%, reimbursements almost And we And when that get XX% level drop to occupancy. back expect to of drops, pro as rata. up

Operator

remarks. question-and-answer And additional over conference like the I'd turn to today's closing session. back to Tom that conclude any for does

Thomas O'Hern

of forward Well, joining of you of you, NAREIT reporting and week. year the the at to We all for us balance many Thank today. next Cody. seeing look thank you

Operator

conference. Thank thank you and disconnect. does you today's all for And do that participation, We you. conclude may your now

The Macerich Company (MAC) 3 Nov 212021 Q3 Earnings call transcript