Macerich outlines path to $2B dispositions and 85% leasing target by mid-2026 as balance sheet strengthens

Earnings Call Insights: The Macerich Company (MAC) Q3 2025

MANAGEMENT VIEW

* Jackson Hsieh, President and CEO, opened the call emphasizing progress on the Path Forward plan, stating "we've remained ahead of schedule on our Path Forward plan and well positioned to deliver on our 2028 targets." He highlighted the operational performance improvement pillar and noted the acquisition of Crabtree Mall as an incremental opportunity, saying, "momentum we've built up in our leasing efforts...has driven our confidence in hitting our 2028 targets and pursuing an incremental opportunity such as the acquisition of Crabtree in June."
* Leasing momentum was a central theme: "we signed 1.5 million square feet of new and renewal leases, which is an 87% increase from Q3 2024. This brings year-to-date signed leases in 2025 to 5.4 million square feet...an 86% increase compared to the same period in 2024." Hsieh added, "our initial goal for new lease deals was 70% by year-end 2025. We're currently at 70% today...on track for the 85% completion target by mid-2026."
* The SNO (signed not open) pipeline grew from $87 million in August to $99 million as of the call, with a target of $100 million by year-end and a projected $140 million including Crabtree. Hsieh stated, "Of the remaining $40 million in SNO left to achieve, roughly 90% is in our A, B and C rated spaces."
* Doug Healey, Senior EVP & Head of Leasing, reported "portfolio sales at the end of the third quarter were $867 per square foot...when you look at our go-forward portfolio, sales were actually $905 per square foot." He noted occupancy at 93.4%, up 140 basis points from last quarter, and go-forward portfolio occupancy at 94.3%, up 150 basis points. Healey also described the re-leasing of former Forever 21 space, stating "we have commitments on 74% of that square footage...with much better brands paying significantly more rent."
* Daniel Swanstrom, CFO, stated, "FFO, excluding financing expense in connection with Chandler Freehold, accrued default interest expense and loss on non-real estate investments was approximately $93 million or $0.35 per share during the third quarter of 2025." He highlighted progress on leverage reduction, noting net debt to EBITDA at 7.76x, a full turn lower than the outset of the Path Forward plan, and nearly $1 billion of liquidity.

OUTLOOK

* Hsieh reiterated the company is "well positioned to deliver on our 2028 targets," with a large LOI pipeline supporting leasing goals. The SNO pipeline is "on pace to meet or exceed our target of $100 million by year-end" and "on track for the 85% completion target by mid-2026."
* Swanstrom described a "clear path to achieving our $2 billion disposition target" and expects the company to be "substantially complete on our $2 billion disposition program by the end of 2026."
* Healey reported strong leasing demand and retailer activity, calling tenant demand "the healthiest...across all categories" he has seen.

FINANCIAL RESULTS

* Swanstrom reported, "Go-forward Portfolio centers NOI, excluding lease termination income, increased 1.7% in the third quarter of 2025 compared to the third quarter of 2024. Year-to-date, the go-forward portfolio centers NOI has increased almost 2% compared to the same period in 2024."
* Recent asset sales included Atlas Park for $72 million, Lakewood for $332 million, and Valley Mall for $22 million, with proceeds used for debt repayment.
* $1.2 billion in mall dispositions have closed to date, moving toward the $2 billion target. The company also completed $50 million in ATM equity issuance at a weighted average price of $18.03 per share, supporting the Crabtree acquisition and deleveraging.

Q&A

* Vince Tibone, Green Street Advisors: Questioned ATM equity issuance and future use. Swanstrom responded the main objective "was to make Crabtree leverage neutral" and future ATM use will be "in the context of accretive growth like Crabtree."
* Samir Khanal, BofA Securities: Asked about 2026 expirations and SNO targets. Healey explained "we are basically trading paper on 88% of our business in 2026," with renewals "at or above our target market rents." Hsieh called it "possible" to exceed the $140 million SNO target due to leasing momentum.
* Michael Griffin, Evercore: Inquired about anchor lease commencements and capital costs. Hsieh said most will commence in "back half of '27, early part of '28," with tenant allowances "typically into 1 to 1.5x annual rent" and higher for anchors like Dick’s.
* Linda Yu Tsai, Jefferies: Asked about timing for SNO pipeline. Brad Miller replied "$20 million will come online in 2025, and the rest will come on in 2026 and thereafter."
* Floris Van Dijkum, Ladenburg: Questioned opportunities for additional Crabtree-like acquisitions. Hsieh described Crabtree as a "unique asset" and said "we'll remain patient and disciplined" on new deals. Swanstrom added the Crabtree term loan is at SOFR plus 250, in the "mid-6% range."
* Greg McGinniss, Scotiabank: Asked about SNO from anchor spaces. Miller confirmed it is "definitely a part of the $99 million," without a precise figure at hand.

SENTIMENT ANALYSIS

* Analysts pressed for details on capital allocation, SNO pipeline timing, lease economics, and acquisition strategy, reflecting a neutral to slightly positive tone, with questions focused on execution risk and capital discipline.
* Management maintained a confident tone, frequently affirming progress and using phrases like "we are making great progress" and "well positioned to deliver." During Q&A, responses were measured and at times deferential, e.g., "we'll continue to be thoughtful and disciplined."
* Compared to the previous quarter, management’s confidence remained high but with more emphasis on leasing execution and portfolio optimization as progress accelerates.

QUARTER-OVER-QUARTER COMPARISON

* Leasing momentum intensified, with signed leases up 87% year-over-year and the leasing speedometer ahead of schedule at 70% versus 65% last quarter.
* The SNO pipeline expanded from $87 million to $99 million, with a raised target including Crabtree.
* Occupancy improved from 92% to 93.4% in the total portfolio and from 92.8% to 94.3% in the go-forward portfolio.
* Leasing spreads moderated from 10.5% to 5.9%, though management emphasized the focus on net effective rents rather than spread volatility.
* Management’s tone evolved from cautious optimism about leasing and asset sales to more confident assertions of being ahead of plan, while analysts’ questions remained disciplined but positive.

RISKS AND CONCERNS

* Swanstrom noted one remaining 2025 maturing loan for approximately $200 million at South Plains, expected to be in technical default at maturity, with ongoing discussions for extension.
* Management acknowledged "frictional downtime" from re-tenanting initiatives, especially related to Forever 21, but expects higher long-term rent and tenant quality.
* Analysts inquired about exposure to challenged retailers and capital intensity for backfills, but management cited strong demand and better-quality tenants replacing vacated spaces.

FINAL TAKEAWAY

Management underscored that Macerich is ahead of schedule on its Path Forward plan, with robust leasing momentum, significant progress on asset dispositions, and improved occupancy supporting the company’s 2028 targets. The SNO pipeline and leasing speedometer are on track or ahead of plan, and recent asset sales and balance sheet actions have strengthened liquidity and lowered leverage. The company remains focused on disciplined growth, operational excellence, and delivering on its multi-year strategic objectives.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/mac/earnings/transcripts]

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