MAC - Earnings call transcript Q2 2022

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Operator

Good day, and welcome to The Macerich Company Second Quarter 2022 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Samantha Greening, Director of Investor Relations. Please go ahead.

Samantha Greening

us second joining call. XXXX for you on quarter our earnings Thank

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

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

Tom O'Hern

of for us joining you all today. to thanks and Samantha, you, Thank

the second tenant that consumer quarter to American very quarter the sales the tough strong of of operating We majority quarter. is was a We are first high increase strong of reflected had our very resiliency display the also After 'XX. report the a quarter demand, level pleased and second we very again of of a to comp saw compared with trending in the quarter quarter, very X.X% strong metrics in on another positively. retailer a second

ever. highest XXX, feet Our annual tenants under square XX,XXX our for average that's portfolio foot level was sales per

see sales to at levels pre-COVID but of tenant pre-pandemic continue levels. We traffic, XXXX exceeding also traffic are XX% about and

'XX of XX% X.X% of to of ended that retailer continue we have sales were the half half up not leasing up quarter the is were in quarter's at per reflect The pre-COVID activity the quarter versus second first compared demand a level to XXXX. sales and since First 'XX seen feet XXXX. that

compared of quarter levels. level at which on was Some point include -- leasing improvement of occupancy excess XXX first and the basis basis the from XX quarter a We 'XX basis significantly second the the other saw for 'XX. quarter of second improvement an to highlights from of strong in pre-COVID point a sequential a XX.X%, quarter, volumes

we second the quarter came strong yet guidance another our our quarterly XQ which and we executed gain. of beat compared We a last XX% midpoint bumped share to the second of growth per at We of center quarter, over the NOI For the and increase 'XX. leases, pre-COVID quarter over quarter XX% same the was the a saw $X.XX. quarter in narrowed X.X% of range. year of in that's guidance increase FFO and 'XX, XXX second

as up We efforts our ramp continue we COVID-XX. to past development move

Pinstripes Target Plaza well under forward. and We growth and Chandler, for NOI Fitness at and have at Corner. they at operations. cash Fashion have are These Primark continued funded projects Caesars speaks Tyson's Sports construction, been signed at all will Republic both our with from with And many 'XX, and term not commence format Acres which Lifetime Plaza rent retailers, Fashion 'XX going Scheels but these be until deals excess or will Scottsdale both Broadway including exciting Green at Broadway numerous near large openings Square, Hotel Kings All Scottsdale at Square, Plaza, flow very

XXX,XXX to in of square upper Box. estate yet of addition, In is Danbury signing Target the chooses the Mall. already occupy The Fair we Sears building. pretty the Target remainder foot carefully. Primark real are very former the its of repurposing announce and Target another level addition excited of completes the will to Target

enormous Danbury So real in on the of in now decision Kings the environment locate a Plaza to the is in moment. to testament will Doug and leasing briefly an Focus estate. quality the elaborate

health of the As food beverage, sports, multi-family. continues and a expected, variety we come given categories, from and to strong breadth a had demand, hotels quarter. entertainment, of co-working, depth and the and Leasing leasing including wide very fitness,

locations, digitally and as as the Polestar. record addition, Yoga, electric Vuori, continue a including be the low. continue vehicle as In brands Allbirds, native companies, to their Bankruptcies brick-and-mortar well Alo into such VinFast move increase to at Lucid,

of the to economic move balance we through and uncertainties year, in the are Ukraine. clearly, war rates inflation, the there rising As interest due

However, we expect remainder occupancy, the next operations through year net of into operating flow to from and continue year. gains in income cash and this

XXers on current build that arena planning announced new In to portion District last addition, Philadelphia the of a news they're a Philadelphia. recent on the Fashion week

will believe in More We them discuss closing on as Scott on to our closer position it as with City turn of get Center local be as the And sometime will the the to for the close to quarter. financial with and I'll be Philadelphia follow impact detail to details Fashion on well to positive. more District XXXX. will XXXX. results the to now, the XXers in Philadelphia in in collaboratively over work very continue communities, we transaction the Obviously, we

Scott Kingsmore

excluding quarter and increased Onto the was the Tom. per termination we posted first has was excluding of This including X.X% NOI income the termination an increased for the six morning, XX% This XXXX, quarter. strong of the income. center when lease Same termination same center now income through X.X% XX% months $X.XX. you, Thank termination results. versus lease operating increased lease lease share tax highlights Year-to-date, FFO estimates, increase net were our quarter which second year, per the which income. including of were share and second of for was NOI quarter FFO per quarter-over-quarter second factors second a the contributing $X.XX high $X.XX to are our share, investments Primary XXXX. valuation FFO quarter. unusually XXXX, and for follows. in which to $X.XX in share a quarter million represents relative $X.XX quarterly expected consensus for lower retailers, over the it the per as in of pertaining results decrease $XX adjustments than One,

And gains can large were these Secondly, nature a of from sales. in these lumpy in unusually comp. a that, the again, by XXXX, second obviously decrease $XX million in Bear mind transactions quarter-over-quarter. difficult land quarter be creating

an Two, net company's million rent rental of dramatic reduction benefit, the million $XX in a quarter resulting XXXX. million a debt expense year which year. of second our interest line the decrease that straight negative relative in million quarter income, the $X.X pandemic and primarily abatements, in of second resulting granted bad to year $X negative last assistance of the the we second these billion which last year. Offsetting from million $X was expense, of XX% during driven this an in quarter following. rent $X debt from $X change from between reduction in tenants non-cash were reduction or quarterly resulted high the by offset Third, level factors One, of last

in And basis prior the increased guidance estimated pandemic for driven million increase $X.XX share our the to roughly a 'XX, then narrowed income. our midpoint. in range by guidance prior range is we for during expectation improvement from was guidance. this We and point settlement finalized $X reserves XXXX $X.XX range to quarter the morning, agreements range growth funds This now driven increased recognized a per roughly FFO X.X% termination a X.XX% of second the the XXXX FFO of NOI we with second a FFO of million lease FFO at estimates. midpoint This increase represents updated of our single which over center for workout to operations. same share, per with large This NOI in an had a of the reversals in includes $X.XX finally, XX tenants. numerous a about $XX debt bad as During we quarter then tenant year. we our now

Our estimates initial based at the our to to guidance our from we're increased on morning. improve from have NOI guidance of progressed, to They 'XX pleased have that. X% same current growth midpoint of year this $X.XX is center over as the continued report

At We expense. midpoint, also or X% as XXXX increased guidance versus anticipate our million $XX well the for both interest guidance termination XXXX. income, lease FFO in as in we improvement

rents this estimated straight between last As million a and guidance year. reminder, of line also includes our year of FFO decline an $XX non-cash

Excluding that non-cash this represents per line share. a by which impact, little roughly to growth, over estimated increase FFO X% $X.XX an of of million rent $XX increase year, is straight

reflect operating to Our cash in flow. healthy a XXXX increase continues outlook

filed information, guidance assumptions our X-K could more of morning. this look company's financial Page for on we Form supplemental the details You on XX which

within our the was million for secured February As rate. thus call, in the slowed the a XX, $XXX past on XXXX, a of And on are significantly far during X.XX%. closed million extension fixed month, $XX during activity year prior balance refinance at in capital financing loan a the to the active to XX extension at of year loan estate financings sheet, SOFR X.X%. Fair, temper we we the $XXX all that several [with] rate May rate floating versus rate loan on impairing on April California markets. existing Mortgage million which weeks. FlatIron quarter very a have million first have X.X%, at we rate a refinance a closed of closed during $XXX fixed On X, was X, a you a X.XX%. two sectors. Danbury debt commercial at On loan fixed real On View earlier Since this one our inflation year Pacific of Crossing at plus Ventura, Oaks earnings actions reported we we unchanged Fed's been the we

capital continue loan an to important As within as extensions a our we utilize plan. result, will tool

today. during We have have the such securing the execute to And healthy Debt September different reopen liquidity billion times. of our to longer we will back fact, of of was over to meantime, forward extensions, capacity been liquid. pandemic. nine end summer prepare extremely million transactions for term and leasing albeit debt line secured dating $XXX EBITDA once the at those million XXXX. Net reasons Including undrawn while is become we more the markets In on for dating excluding $X.X we in successful we X.X $XXX to service refinancing back of quarter XXXX, secure a extensions the of coverage times. costs of X.X credit, over on extensions,

recurring after roughly million capital expect expenditures this of cash $XXX We flow dividend free year. and

as from positioned environment the generation. of So standpoints flow today's both we cash are in well as liquidity, well

environment. Now turn leasing I'll over discuss to Doug to it the

Doug Healey

fueled quarter, retailer environment, a increased second the in occupancy. continued momentum by very Leasing growth and Scott. Thanks sustained sales healthy

two June end sales put of Madera, touches per all Occupancy than and of commitments X.X% and the last the given we a openings Square, remain Green and confident Country the have and date, happy XX, over brings Mall To It's portrayed June and that almost Kings XXXX. I of Raceway were to the points an Fashion estate. year-to-date foot Leap opened and Fashion environment is quarter are XXXX. our Dave thing Towne Madera, Fabletics category, stores Stance Primark, XXXX into at the totaling progress compared X.X% increase basis substantially so closings this the replacing that's when XX% feet, Target, three about Notable increase Interior month Goods well more making Freehold emerging Broadway & In X.X% on same the in to gave bankruptcy conjunction Windsor up we second to at uses. at feet digitally same these positive today year. we're Trailing XXXX represents square higher North and we expirations. to likes $XXX, the that the XX,XXX Arrowhead Cotton native a that's perfect remain entertainment Define also XX% expiring X.X% Kierland second the quarter Fresno at opened were XXX,XXX just Sears remix our to category, store mentioned, William exists Plaza we XXXX. at accommodate Zara, In XXXX, up around Sears, Burlington, now spreads square and to which end the Whole which Arrowhead, at Corner, the quarter our second leasing this the to with non-relevant just On, Goods, name Corte second XX,XXX openings It's and Buster’s, all XX, as real Sales of at People The opportunity of of continue and done will Village occupancy Second retailer June three on XXXX, on of footage negative back Quay of example XX and the XX, and I letter over throughout of stores our nine at new in Sporting square quarter Village our compared opened changing with I'm I previously an finishing on feet. with Corte of This but while with Club stage. on brands Buster’s think relative at quarter to better leasing can't Year-to-date as Park, Acres, was lease year. Stores will Center, with not closures, Scottsdale way Plaza, In three level Tysons help and at we last And and us at only XXXX have Sonoma square period very pipeline for addressing during stores. the Free XX% about opened we've period Foods few. to game of tenants. the Sac at foot as Faire, sales another Fashion a in the that the building. first XXXX Dick’s and best-in-class allow great healthy our level were quarter, tenants, the second and of fear high as time Fair. opened company. It's XX.X% gave the XX.X% XXX our media the us the of continue subsequent and Common Sears Sporting transform that expirations. strong retailer our XXXX. of a coupled stores Dave And opportunity about square the we at at we with Love Vintage intent XXX,XXX include lease XXXX the RoundX, store footage building second In but They of us. on former interesting with with and as finalized square think uncertainty Dick’s Broadway the we square

to quarter. renewal for the Turning is keep year mind right new we feet, time the million for this of that was leases we were footage our leasing XXX square signed terms leases X.X we've and X.X XXXX. square feet. volume XXXX. in signed second We best signed leases par million Year-to-date, XXX and and with in at in on since this XXXX And where in square

did to deals one footage of half leasing properties. with bring two first We we of Fair of activity than Continuing XX% quarter, half for square terms second Danbury over we Arrowhead more XXXX, our at in the only, the XX Center. In the for the in during one signed concepts initiative more signed leases RoundX stores first and entertainment our to best very XXXX. Towne new at

will quarter under of At be sports things of XX,XXX the Cane’s we a Shake the RoundX karaoke Chicken Timberland beverage For will opportunities, such Ranch Fashion be bowling, square name of basketball, Plaza just familiar, and its at is Other signed pong, with center Outlets square for Wood category, concept. Dick’s at Scottsdale, Spo-Cha the soccer, arcade Sporting beauty roller RoundX at the few. Square, dodgeball Garage which activity to at important multi-entertainment games, Shack Chicago. at the addition anthropology at renovated stands foot sporting the as recently Chanel Raising of Face XX,XXX Spo-Cha, and ping all Goods. RoundX skating. and introduce at athletic Village, signings second in Arrowhead, batting those Danbury and include drinks. located Oaks, and SanTan expanded challenge darts, Square at out not cages, Fresno and Biltmore billiards, RoundX in food In Park, a and will offering in the food and Japan, complex North Kings feet Lululemon at front and and at Washington Washington Plaza, Fashion Broadway

Define in Village we second at at Interior shift Allbirds and and Alo and at Blue Broadway brands, Purple Vuori Lastly, Everlane, Plaza Corte Commons The at to with at Tysons Tonal Broadway Kierland quarter, Arrowhead emerging Corner, the as signed we Nile Madera. leases and Yoga Plaza, Quay Australia Kierland at Commons, and at

operator centers for regardless And strong and of in leasing centers, positioned that further into attract a this our Q&A. to over still year signed to with what review they leases very up of retailer even open to metrics occupancy depth have remain So outpace call Sales next portfolio, levels, environment of well to to a of our we remains town I while been from have in reposition it have pre-pandemic XXXX, are and part to to I'll pipeline be very all still turn XXXX low. best by our importantly, continues And we retailers. are a very time of this XXXX. at given And almost to unknown increase, biweekly continue very But pullback our point at strong, are and want reimagine in extremely the will bankruptcies deal the we ahead. way lies leasing seen date, continue most now new the uses believe an ahead year, XX%. breadth AA+ together the and little best-in-class our conclusion, since the healthy open the that we shoppers, future to

Operator

go with we'll Greg And Scotiabank. first to Instructions] McGinniss [Operator

Greg McGinniss

this range, about fairly the at year. in of still kind want point the Just guidance seems wide to ask

So brings range? top of I'm that to of just end kind bottom or curious you the what guidance end

Scott Kingsmore

consider what a I'd couple relatively the large typically wide guiding range contribute versus of the middle we would, would to be be through say a way year. I to variables that where

normal as and today the variable environment. is tenant we following impact It's on a sales year to with the in macroeconomic to going First not pandemic on just what's dealing rents. continue normalize the

about close that relatively variable And as a have other. previously. on that's So versus of to range the Those spoken as we the can wider sales FFO. one well contributes then quarter do have we land pipeline NOI, large in one both

variability biggest drivers really So there Greg. are the is Those two there. some

Greg McGinniss

And then of back to land what's of rent? guess base mostly kind on tenant you have so the converting leases I those side what's the or the then much included in from expectation? terms sales success sales, And had

Scott Kingsmore

sales the give year ahead land a we $X.XX, probably On were that. where just the you finish to that side, say of I'll year going we last sense are to for $X.XX

FFO. We is pretty it haven't specific provided to large but guidance, contributor a

it's focus great renew growth that. rent, I So get a rent fixed highlight basis, rent lock XX in basis our then to are finding as important fixed yes, bumps. fixed think as stores annual lock obviously, a to deal time. variable XX, XX, at to it but that success And Primary in of as to on we we a on to is converting aggregate far a also in with rents,

great in to success we're that? So Doug, elaborate so. on doing finding anything

Doug Healey

on. No, you Scott nailed it right

Greg McGinniss

clarify. And just to

of we rent So think sales when then [overage] or tenant what's year-over-year? in terms expectation contribution the

Scott Kingsmore

say guidance for sales of our the that guidance. specific than relatively year. this on X% giving was were when almost a line Tenant half little item. perspective first six first rent strong, started not year ago we line bit by off percentage better the is I'll about it speaking We're months item

a range contributed in a little of percentage to better, increase as the bit the our quarters. result, has somewhat NOI over which couple our are last So rents

Operator

go next with Derek Bank. Deutsche We’ll to Johnston

Derek Johnston

your year. So has the successfully secured for team debt extensions

and are I two, but refinancings, and high late not larger in centers. relatively Now this believe only and both quality Santa Monica Square, are left till year Washington

be indication these helpful. on here with think have early you can you would rate I to willingness on any I anything mean, or do So you loans? bank's work provide

Tom O'Hern

you just I'm the not would But specific. that process in I going They on the term we'll to going recasting in on be in too what's respect have loans. terms my short that opening we markets. those going financing of nature be those mentioned what's To with Obviously, happening given remarks. successful lenders, could expect be

are bite now, low, right another the short and road. couple term then years expect So would those apple I going are again, it in could to won't see, be further The the the able we And process that's rates relatively get rates. nature. specifics. tick-up that of But down any on some respect to be you I on provide in those as

Derek Johnston

really leasing. just undebatable positive then paired and volumes, with print base The rent showed And solid XQ leasing total growth.

of second or leasing seeing of demand half rate pushback could any So shape form, notables are changing any or share economic demand way, Is year? any you always type helpful? the the what tenant on slowdown are given in you negative for or positive

Tom O'Hern

over where low. more pre-COVID, our close a now in buys. pulling opinion turn we which is gives our open terms to it to But strong given we the XX%, certainly coming to basis the gotten And to they're on all lot of is down to uses. Doug, we year, to going occupancy predict that last I'm as will getting were retailers hard what a bit, second almost of rate. of to do occupancy COVID, surveyed which like. major ability out ability all Initially going tenants points us chasing because half seen have a time first were to to half XX%, it us the their raised XXX be we've back, push little occupancy very And more types over that's had It's what different all we're of rate. of year get from push with We've

Doug Healey

probably that. surveyed national XX retailers, prudent with between noise and the on to XXXX have And I XX take somewhat and are say all top on of continue the the open in it today. the economy to we XX% in promised and XXXX, the We are going retailers but to their open we to and divides. them, and thought the would proactively out actually majority probably national going they changed what And temperature and uncertainty, that’s on did vast point, of Tom's retailers buys, not as to their reach with

there. is the So still demand

Operator

to with We'll of next Bank Schmidt America. Craig go

Craig Schmidt

the leasing But digit tempering strong, I spreads? is double are pretty from leasing think digit? mean keeping X.X, mean, even single your you your sales occupancy I What your growing of going what do attractive. mid to seems is cost spreads

Tom O'Hern

That's a good question, Craig and frankly, a question every I put forward weeks. couple to our leasing team

We where start at is are kind space of much that we point and rate. that there not friction now left pushing can

XX.X% would pre-pandemic, that significantly was I our you can expect which was XX%. So as It sales But quite as point cost at quarter-to-quarter. it to increasing a of bit result lower out, than about change. occupancy now fluctuate a is

expect So some as that to to re-leasing should we I we go as spreads. be would it forward, get able more traction relates

Doug Healey

were occupancy in calls, talked the that. trough pandemic, and our we've hit we did we driving about when about on previous during all we As occupancy,

Tom are be right at to more mentioned, So where now point inflection we've on to table that able enough rates. focus off taken as more we the and supply sort of

So in the see next I going spreads increase think are two quarters. those to you

Craig Schmidt

have you generation introduce have have terms you them RoundX in your Place you and new Dave properties seeing just, I know still think Monica opened other entertainment, to where you then and Santa What to introduced your of some these and from a entertainment traffic & are concepts? entertainment of of plans to centers. couple And Buster’s, centers I

Tom O'Hern

is the perform right put oriented. entertainment And we the drive we And clearly, very category And That was success it use, nothing coming pandemic of but uncertainty seen success, centers, lot did was have a our are is extremely the any in. that to do way they pre-pandemic. ton they now. because that great our there category their of if out destination going strong this from of results to uses a footfall of

Operator

We’ll Van Dijkum Compass with go next Point. Floris

Floris Van Dijkum

terms is basis not can signs open guess in quantify I off to what start pipeline your or of So percent you with, points?

Scott Kingsmore

not shop again mentioned within is contributors, but and about which in that will got leased those yet which ‘XX, Tom come is are not X% large space. flow our some cash have are It's that that remarks in ‘XX. you occupancy not locations, number. small open, prepared that his units, cases, In online anchor until signed reflected

And to anchor stores, So space drivers flow. little be those of no will course, unseen is we important the just sight in paying that that's rent department those very handsome on from you. pretty mind, bear recaptured a that of was former cash as spread to

small So about X% our numbers. in shop

Floris Van Dijkum

And if amount, that have well? were you quantify -- a can that do what as as dollars you to number

Scott Kingsmore

that… We don't have

Floris Van Dijkum

guess it a a maybe the having that can next you you're space, servicing. about in And would difference CMBS, debt, I the easier And there And be whether anchor follow -- would I obviously discussion the presumably include a again, talk one if difference us is big would my you're is up then the be as well. Monica, guess particular, with in presumably, Could a -- terms And would discussions to that as Washington the Acres bank be or is on interesting opposed bank? question Square, Santa of refinancing year. CMBS whether whether that's that's remind Green that I early CMBS big in other you believe having? then you're

Scott Kingsmore

XX or secure both actually months servicers balance well as approached those last months almost. over lenders so XX We've to the as sheet extensions, CMBS

groups. pretty So we're with dialog. working sets, both a open it's really And both

sector. it the and We've sector just malls lodging not pretty is seen just impact industrial recognizes and what's today, that on Again, it's the everybody the assets You the disfunctional. positioned talked the for the sector, where going emphasize, to board. market multifamily about is across

you're think, I probably with familiar happening. what's

debt they're a and that the aware assets say, significant I I to I've very standpoint. take still choose year. mentioned they're from think, are well you. those assets, would to very and positioned liquidity past, this I generate yield So think out of our next we will work Certain with in should to willing liquidity us,

Place, Monica mentioned, assets and when are as Square, you're Santa well these about et Washington cetera. you So quality high positioned Green Acres, thinking

Floris Van Dijkum

I would additional about how any if proceeds to mean is it? that out assets? of unencumber thinking take thing to that, you're the out were be Is that loan, used you one some

Scott Kingsmore

Generally will to be that the pay what be yes, will debt strategic about debt focus. down used we primary type repay, of but

Operator

Goldfarb go Piper We'll Sandler. to Alexander next with

Alexander Goldfarb

So two questions.

if definitely the been First, the last up pretty show more. revising interest guidance A thought was the would've next. XXX active XXX, for for of number and doesn't I But even their at it obviously, on signs any and look slowing gone up would've Scott of interest guidance, quarter, year your rates expense REITs been which Fed's this on now year and other have down. from expectations is I the

just color, little it land thoughts of sounds bit sales and more some into this your debt your maybe are. pay is because maybe So playing down a what like

debt interest it So smaller much than you’re expected. rate just understand how to viewing want is would've given better floating and expense this

Scott Kingsmore

I made don't exact ago in so. the was have a of front similar months $X.XX our expense change me, we It guidance. but numbers roughly interest three to or

this incremental three already had reassessed ago, months we change. just an is and So

have. you with So have you coverages comparable will find relatively changes other two think incremental that it's seen you and what I to perhaps

Tom O'Hern

small only amount to debt XX% debt, rate one our is have of total in is Alex, we a thing of keep floating. very floating mind

only a mortgages. takes are So us be while or it given move, as we refinancing because year three four to secured a rates for impacted in

you of other on floating much report an not a And of companies probably the higher rate debt. So probably impact. certainly there have percentage is immediate a lot

Alexander Goldfarb

are and these even you're where Tom, what -- saying this going extensions of you it includes like is the guidance you're So that refinances saying. are obviously inclusive up, sounds rates doing what loan

Tom O'Hern

year. be and And to about time and only these a extensions partial No, you mind, restructurings a the partial done, it's again, are By we talking going get that's only in true. keep that's… year

Alexander Goldfarb

to question down from more The out XXX $XX those on little to year ago the portfolio same just positive. maybe was pool period Second for ago million the the added same Scott, it's store? on is color to period store. bit the pretty backed year's what same back adjustment pretty factors in and the year was the year period, actually of and then get that that's to adjust this dramatic total non -- this a are, out store is

Scott Kingsmore

Two to Specifically lion then the two, it. investment the from last biggest X. the there. that our And reconciliation Page in change million assets same a prepared of in those One $XX of that same we table was for Page income the in center mentioned the X are dispose did non remarks, the that of center on retailer La year. supplemental, Encantada, audience adjustment adjustments Bridge, we share of and North couple year, referring last factors is is

see So that's there. what you

Operator

go Linda Jefferies. to with We’ll next Tsai

Linda Tsai

terms In retailers growth, the certain portfolio of sales strength there are pockets seeing of others? versus

Doug Healey

all actually been of have Year-to-date, categories with exception the shoes. positive

it the So we board. are seeing across

Linda Tsai

the being but a the -- this center remainder you that weigh you built? stadium. the realize portion that is that And results out, of with still from do years how growth view few the stadium then Fashion District NOI to I providing regarding the with and away do the How the the you're of goes developers the

Tom O'Hern

opening As a if you years. remember of opened Philadelphia grand you November out XXXX. there it's -- in District Fashion had it's was few said, But

So releasing into then quarter we the hit. were fourth COVID and

today one So the is have available space. remain be retail. and third the we reality space the of thirds end have up that arena two being would envisioned It's would is got we

room another we of going the section of we move those that's one and to to tenants So most have property today, on from what's of got as speak. part the

it's an And the very commerce expect certainly leasing. any the would the an do again, years seeing expect So volume a deal can't to traffic, really HBSE positive for is much think a excitement, people, fairly quickly. this in losing done close much too but start we of few obviously, out, a we be NOI. that the it's impact And we sometime we'll we deal we that that arena bring though not it, a with our Even on have elaborate got to would ‘XX. so ability without the

Operator

J.P.Morgan. with Mueller next go to Michael We’ll

Michael Mueller

different the lease you were levels that leases you're that I today than first are baking signing the into we've pre escalators given inflation into seen, that the leases escalators COVID? new materially guess

Scott Kingsmore

identical. taxes pass base X% X% through. recoveries, on to X% are No, on to rent, a X%

recast period. of more cash structure those the as term and short we it's stream obviously, the healthy from flow COVID So variable some deals same

Michael Mueller

could the of is the What question. temporary to second XXXX? and then that by today And end percentage say leasing go you think where do

Scott Kingsmore

we it's XXX and points realistic of to Yes, and Xs think improvement today assume about, I basis XXX, mid year get it's probably next could the over a half.

Operator

We’ll go Citi. with next to [Greg Newman]

Unidentified Analyst

that to to call. I'm you're that's my it mean, your in the operating more I referenced earlier number several facing, good you you're actually the sort it curious of not sales earlier growth but as cost in question, question times also foot the sales I question been of first guess rent bit growth? modest. for per looks pressures per why the this kind the factoring is those as the number profit were all has your rent an look are foot square little on dovetails adjust of But the fact tenants And or at that occupancy kind a supplemental have if just you tenants. an maybe cost maybe inflation of highlighted and square basis maybe when getting guys

Tom O'Hern

quarter to hard it It's that is in part a the up come specific reason are -- a number deals that and for of just negotiated. given of pinpoint

reflection they've impact the have what's really biggest is tenants that happened them. percentage with that availability valid much of got of of Their a I really the in labor. as inflation complaint largely where result many Obviously, a more terms of cases terms of for on to pressure. not biggest about resolved. labor. occupancy are Our number the think and And we're of the in pay going sales cost what's complaints result a That's complaints. increases as been as have the under on issues that's chain sales, complained And primarily. in wages no, Supply on a of getting

Unidentified Analyst

Hudson. just of or property, then potentially your on curious pay are Are and selling question, period that debt. where proceeds in you Westside those still at using interest on down that just buying interest in second with One they exclusivity I'm process just to the And in that

Tom O'Hern

build turned their out. So that asset Google. has doing to that's an is been Google over

think the year. next or year them space expectation occupy for to early this later is I either

a has on asset. that partner call Our

we asset. to like We the off we have thrown NOI now from asset. that the be and a right that that's But put going on like asset

really to do in to that. a right we're both So and have us to either do hurry when the if that of not one anything there. do chooses But we

Operator

Capital to with KeyBank go Todd will We next Markets. Thomas

Todd Thomas

pre-COVID that XX% I'm second quarter. lot's levels at the first Tom, quarter and steady remains the quarter than traffic during months just in terms happened the it of whether the mentioned sales maybe or like curious through first roughly traffic was question talk or within about growth. sales A July, into of three been in sort you quarter And there changes last four looks the and trended the stronger could any April how you if has trends of quarter? June, within

Tom O'Hern

think I sales. difference the on big

things was Compared back that and 'XX to our were First pretty very surge in strong COVID hit. right quarter quarter a the now to masks there. very bounced and second 'XX, when of that's about, things And is a just Omicron right because big slowed of a weak was people back going which had quarter quickly quarter that of we're against first 'XX, we because wearing comp talking down.

sales think that's difference I in So activity. a the

higher are looking numbers. because the on in and and continues was what that were pre-COVID. In out they they bearing for, the is and to know pre-COVID rate the has come steady a it's traffic they traffic, at be reality to But are tending are higher terms of holding than XX% sales quicker than it and in they're people

So not situation. a bad it's

they think are more just I consumers educated when in. come

Todd Thomas

in back growth in guidance half in year? remind what's embedded of the just me And terms the the of sales

Scott Kingsmore

Todd. six terms given here. not detailed tenant was our just the say reasons this it rents our better year. that got we months But getting the sales not of I is terms that's are overlay on in say estimates, again I one percentage outlook -- our sales rents -- ago a We of we certainly we're in have started how would aggressive assumptions being range would here, too of have percentage than this

out. of balance the how see the year plays we'll So

Tom O'Hern

they Because keep in fall in the retailer fourth a lot are the cyclical quarter. mind of sales and

hard the rent have fourth exceeded it's a recognize until get when accounting break going annual over and you only you be break the quarter on to the rent go once to they have under year, accurate see that's what rules, you percentage they to point. And through is So numbers, view percentage do their their can't rateably real point. it

did in record And last range. was why not in that, year we the So a have that's pre-COVID between record we and somewhere were where we of year got another last top year. forecast it's year on

Todd Thomas

if I just And on could follow then question. up another

basis the centers guess a how 'XX the generate through are bunch of much with NOI I the supplement, Because you large next spend format at 'XX, NOI these we if and NOI doesn't from bit format to openings NOI. could the the look What's the years. associated some annualized that's page an previously of totality redevelopments, that you're through you of discussing the retailer looking think just rent it spend larger I sort projects those wondering are XX discussed you on look little in what's the that expected with commencing a give at of like detail REIT tenants? more was the underway associated yield guess and I commencing And on of that couple number if spend? us of anchor both on. in I on a

Tom O'Hern

vast it's are about next And rent yet. be deals a that full of majority the year million million not those paying to is format Todd, going we're this spent on year. $XXX the and have those roughly large for -- signed about the year and the talking spend, been $XXX deals

how -- quantify same asked that much is. Floris the much that how rent think I of question regarding

to I projects fairly significant. think to cost in return range that be on fingertips it's average. on on have those And don't the is we XX% our number around going XX% but at

Todd Thomas

those And the commence those through you'll come over rents -- see ‘XX, online… next will

Tom O'Hern

big other of Scheel’s the fairly for example some uses. and the goods, Yes. are big elaborate build I mean some outs, sporting of ones like

it's So in the that's be and but the in numbers obviously to be not NOI ‘XX in not to going it's going it's ‘XX the so lift and that's today an occupancy, NOI.

Operator

next to go St. We'll Haendel

Mizuho. with Juste

Unidentified Analyst

Haendel [Ravi] on is St. This line the for

difference productivity seen between in on a relative markets? any you Coastal basis and Juste. sales Have Sunbelt

Tom O'Hern

No, haven't. we really

category consistent been standpoint. from Our from a a much and both standpoint sales have pretty geographical

Unidentified Analyst

one haven't malls A Just of this environment? a transaction where know you here. regarding lot right stand for read Class now more been give a there can rates But I cap us trades recently. in

Tom O'Hern

really been so have to any trades, Well, have hard a anything it's been no really there. to of is to we you're number so for don't trades years right, today. point there that haven't pinpoint There where

Operator

questions. to And this are Tom further the back time, at Instructions] no I'll call there O'Hern. turn [Operator

Tom O'Hern

Thank we year XXXX you. Well, we've results several the the months. Thank enjoyed of to a balance solid and you. forward the over for start to reporting look our next

Operator

today's conclude conference. We participation. does This for your you thank

The Macerich Company (MAC) 28 Jul 222022 Q2 Earnings call transcript