UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) May 2, 2018
THE MACERICH COMPANY
(Exact Name of Registrant as Specified in Charter)
MARYLAND | 1-12504 | 95-4448705 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
401 Wilshire Boulevard, Suite 700, Santa Monica, California 90401
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code (310) 394-6000
N/A
(Former Name or Former Address, if Changed Since Last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
The Company issued a press release on May 2, 2018 (the Press Release) announcing results of operations for the Company for the quarter ended March 31, 2018 and such Press Release is furnished as Exhibit 99.1 hereto.
On May 2, 2018, the Company made available on its website a financial supplement containing financial and operating information of the Company (Supplemental Financial Information) for the three months ended March 31, 2018 and such Supplemental Financial Information is furnished as Exhibit 99.2 hereto.
The Press Release and Supplemental Financial Information included as exhibits with this report are being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be filed with the SEC or incorporated by reference into any other filing with the SEC.
ITEM 7.01 | REGULATION FD DISCLOSURE. |
The Press Release and Supplemental Financial Information included as exhibits with this report are being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed to be filed with the SEC or incorporated by reference into any other filing with the SEC.
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
Listed below are the financial statements, pro forma financial information and exhibits furnished as part of this report:
(a), (b) and (c) Not applicable.
(d) Exhibits.
Exhibit Index attached hereto and incorporated herein by reference.
2
EXHIBIT INDEX
EXHIBIT NUMBER |
NAME | |
99.1 | Press Release dated May 2, 2018 | |
99.2 | Supplemental Financial Information for the three months ended March 31, 2018 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, The Macerich Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
THE MACERICH COMPANY | ||||||
By: THOMAS E. OHERN | ||||||
May 2, 2018 Date |
/s/ THOMAS E. OHERN Senior Executive Vice President, Chief Financial Officer and Treasurer |
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Exhibit 99.1
PRESS RELEASE
For: | THE MACERICH COMPANY |
MACERICH ANNOUNCES QUARTERLY RESULTS
SANTA MONICA, CA, May 2, 2018 The Macerich Company (NYSE Symbol: MAC) today announced results of operations for the quarter ended March 31, 2018, which included net loss attributable to the Company of $33.6 million or $.24 per share-diluted for the quarter ended March 31, 2018 compared to net income attributable to the Company for the quarter ended March 31, 2017 of $69.2 million or $.48 per share-diluted. For the first quarter, 2018, funds from operations (FFO) diluted was $123.5 million or $.82 per share-diluted compared to $133.6 million or $.87 per share-diluted for the quarter ended March 31, 2017. A description and reconciliation of EPS per share-diluted to FFO per share-diluted is included in the financial tables accompanying this press release.
Results and Highlights
| Mall tenant annual sales per square foot for the portfolio increased by 7.4% to $686 for the year ended March 31, 2018 compared to $639 for the year ended March 31, 2017. |
| The re-leasing spreads for the year ended March 31, 2018 were up 14.7%. |
| Mall portfolio occupancy was 94.0% at March 31, 2018 compared to 94.3% at March 31, 2017. |
| Average rent per square foot increased to $58.44, up 3.8% from $56.31 at March 31, 2017. |
During the quarter our portfolio continued to perform well. We achieved solid re-leasing spreads with good leasing volume and strong tenant sales growth said the Companys chairman and chief executive officer, Arthur Coppola. We remain excited about the leasing opportunities we see as the synergies between digitally native retailers on line sales and their appetite for great real estate become more clear as is evidenced by their appetite for off line stores.
Financing Activity:
The Company closed on a $450 million, 12-year fixed rate loan on the recently expanded and renovated Broadway Plaza. The interest rate is 4.18%. The Company has less than $10 million of loan maturities for the balance of 2018.
Joint Ventures:
On March 1, 2018 the Company formed a joint venture with Hudson Pacific Properties (HPP) to work together to transform Westside Pavilion into creative office space. The mall will be contributed to the partnership at a value of $190 million. Macerich will own 25% and HPP will own 75%. Total project costs, including the contributed mall at $190 million, are expected to be in the range of $425 million to $475 million.
Non-Core Asset Sales:
The Company is continuing its strategy of selling non-core assets and recycling the capital into its higher quality assets. During the quarter the Company and its joint venture partner sold a portion of an office building that is adjacent to Fashion District of Philadelphia for $42 million. In addition two non-core retail assets are currently under contract. Since 2013, the Company has sold 21 non-core retail centers for a total of $1.8 billion in proceeds.
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2018 Earnings Guidance:
Management is re-affirming its previously issued FFO per share guidance for 2018. A reconciliation of estimated EPS to FFO per share-diluted follows:
2018 range | ||
Diluted EPS |
$.49 - $.59 | |
Plus: real estate depreciation and amortization |
3.15 - 3.15 | |
Plus: financing expense due to accounting rule change ASC606 |
.04 - .04 | |
Plus: loss on sale or write-down of depreciable assets |
.24 - .24 | |
| ||
Diluted FFO per share |
$3.92 - $4.02 | |
|
As anticipated same center net operating income growth in the first quarter was modest, however, the Company continues to be comfortable with the original full year assumption on same center net operating income growth of 2.0% to 2.5%. More details of the guidance assumptions are included in the Companys Form 8-K supplemental financial information.
Macerich, an S&P 500 company, is a fully integrated self-managed and self-administered real estate investment trust, which focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States.
Macerich currently owns 53 million square feet of real estate consisting primarily of interests in 48 regional shopping centers. Macerich specializes in successful retail properties in many of the countrys most attractive, densely populated markets with significant presence in the Pacific Rim, Arizona, Chicago, and the New York Metro area to Washington DC corridor. A recognized leader in sustainability, Macerich has earned NAREITs prestigious Leader in the Light award every year from 2014-2017. For the third straight year in 2017 Macerich achieved the #1 GRESB ranking in the North American Retail Sector, among many other environmental accomplishments. Additional information about Macerich can be obtained from the Companys website at www.macerich.com.
Investor Conference Call
The Company will provide an online Web simulcast and rebroadcast of its quarterly earnings conference call. The call will be available on The Macerich Companys website at www.macerich.com (Investors Section). The call begins May 3, 2018 at 11:00 AM Pacific Time. To listen to the call, please go to the website at least 15 minutes prior to the call in order to register and download audio software if needed. An online replay at www.macerich.com (Investors Section) will be available for one year after the call.
The Company will publish a supplemental financial information package which will be available at www.macerich.com in the Investors Section. It will also be furnished to the SEC as part of a Current Report on Form 8-K.
Note: This release contains statements that constitute forward-looking statements which can be identified by the use of words, such as expects, anticipates, assumes, projects, estimated and scheduled and similar expressions that do not relate to historical matters. Stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to vary materially from those anticipated, expected or projected. Such factors include, among others, general industry, as well as national, regional and local economic and business conditions, which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of current and prospective tenants, anchor or tenant bankruptcies, closures, mergers or consolidations, lease rates, terms and payments, interest rate fluctuations, availability, terms
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and cost of financing and operating expenses; adverse changes in the real estate markets including, among other things, competition from other companies, retail formats and technology, risks of real estate development and redevelopment, acquisitions and dispositions; the liquidity of real estate investments, governmental actions and initiatives (including legislative and regulatory changes); environmental and safety requirements; and terrorist activities or other acts of violence which could adversely affect all of the above factors. The reader is directed to the Companys various filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2017, for a discussion of such risks and uncertainties, which discussion is incorporated herein by reference. The Company does not intend, and undertakes no obligation, to update any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events unless required by law to do so.
(See attached tables)
##
3
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Results of Operations:
For the Three Months Ended March 31, |
||||||||
Unaudited | ||||||||
2018 | 2017 | |||||||
Revenues: |
||||||||
Minimum rents |
$ | 142,407 | $ | 145,555 | ||||
Percentage rents |
1,884 | 1,918 | ||||||
Tenant recoveries |
68,092 | 72,412 | ||||||
Other income |
13,809 | 15,264 | ||||||
Management Companies revenues |
10,542 | 11,896 | ||||||
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|
|
|
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Total revenues |
236,734 | 247,045 | ||||||
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Expenses: |
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Shopping center and operating expenses |
74,510 | 75,897 | ||||||
Management Companies operating expenses |
38,323 | 28,517 | ||||||
REIT general and administrative expenses |
8,019 | 8,463 | ||||||
Depreciation and amortization |
79,937 | 83,073 | ||||||
Interest expense (a) |
52,635 | 41,301 | ||||||
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|
|
|
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Total expenses |
253,424 | 237,251 | ||||||
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|
|
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Equity in income of unconsolidated joint ventures |
16,872 | 15,843 | ||||||
Co-venture expense (a) |
| (3,877 | ) | |||||
Income tax benefit |
2,949 | 3,484 | ||||||
(Loss) gain on sale or write down of assets, net |
(37,512 | ) | 49,565 | |||||
|
|
|
|
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Net (loss) income |
(34,381 | ) | 74,809 | |||||
Less net (loss) income attributable to noncontrolling interests |
(808 | ) | 5,566 | |||||
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|
|
|
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Net (loss) income attributable to the Company |
($ | 33,573 | ) | $ | 69,243 | |||
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Weighted average number of shares outstandingbasic |
141,024 | 143,596 | ||||||
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Weighted average shares outstanding, assuming full conversion of OP Units (b) |
151,316 | 154,187 | ||||||
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Weighted average shares outstandingFunds From Operations (FFO)diluted (b) |
151,342 | 154,246 | ||||||
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Earnings per share (EPS)basic |
($ | 0.24 | ) | $ | 0.48 | |||
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EPSdiluted |
($ | 0.24 | ) | $ | 0.48 | |||
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Dividend declared per share |
$ | 0.74 | $ | 0.71 | ||||
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FFObasic (b) (c) |
$ | 123,513 | $ | 133,603 | ||||
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FFOdiluted (b) (c) |
$ | 123,513 | $ | 133,603 | ||||
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FFO per sharebasic (b) (c) |
$ | 0.82 | $ | 0.87 | ||||
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FFO per sharediluted (b) (c) |
$ | 0.82 | $ | 0.87 | ||||
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THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(a) | On January 1, 2018, in accordance with the adoption of ASC Topic 606, Revenue from Contracts with Customers (ASC 606), the Company changed its accounting for its investment in the Chandler Fashion Center and Freehold Raceway Mall (Chandler Freehold) joint venture from a co-venture arrangement to a financing arrangement. As a result, the Company has included in interest expense for the three months ended March 31, 2018 (i) a charge of $4,382 to adjust the fair value of the financing arrangement obligation during the period, (ii) distributions of $2,002 to its partner representing the partners share of net income and (iii) distributions of $1,638 to its partner in excess of the partners share of net income. |
(b) | The Macerich Partnership, L.P. (the Operating Partnership or the OP) has operating partnership units (OP units). OP units can be converted into shares of Company common stock. Conversion of the OP units not owned by the Company has been assumed for purposes of calculating FFO per share and the weighted average number of shares outstanding. The computation of average shares for FFO - diluted includes the effect of share and unit-based compensation plans, stock warrants and convertible senior notes using the treasury stock method. It also assumes conversion of MACWH, LP preferred and common units to the extent they are dilutive to the calculation. |
(c) | The Company uses FFO in addition to net income to report its operating and financial results and considers FFO and FFO-diluted as supplemental measures for the real estate industry and a supplement to Generally Accepted Accounting Principles (GAAP) measures. The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from extraordinary items and sales of depreciated operating properties, plus real estate related depreciation and amortization, impairment write-downs of real estate and write-downs of investments in an affiliate where the write-downs have been driven by a decrease in the value of real estate held by the affiliate and after adjustments for unconsolidated joint ventures. As a result of changes in accounting standards effective January 1, 2018 (ASC 606), the Company began treating its joint venture in Chandler Freehold as a financing arrangement for accounting purposes. In connection with this treatment, the Company recognizes financing expense on (i) the changes in fair value of the financing arrangement, (ii) any payments to such joint venture partner equal to their pro rata share of net income and (iii) any payments to such joint venture partner less than or in excess of their pro rata share of net income. The Company excludes from its definition of FFO the noted expenses related to the changes in fair value and for the payments to such joint venture partner less than or in excess of their pro rata share of net income. Although the NAREIT definition of FFO predates this guidance for accounting for financing arrangements, the Company believes that excluding the noted expenses resulting from the financing arrangement is consistent with the key objective of FFO as a performance measure and it allows the Companys current FFO to be comparable with the Companys FFO from prior quarters. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. |
FFO and FFO on a diluted basis are useful to investors in comparing operating and financial results between periods. This is especially true since FFO excludes real estate depreciation and amortization, as the Company believes real estate values fluctuate based on market conditions rather than depreciating in value ratably on a straight-line basis over time. The Company believes that such a presentation also provides investors with a more meaningful measure of its operating results in comparison to the operating results of other real estate investment trusts (REITs). The Company believes that FFO on a diluted basis is a measure investors find most useful in measuring the dilutive impact of outstanding convertible securities.
The Company further believes that FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income (loss) as defined by GAAP, and is not indicative of cash available to fund all cash flow needs. The Company also cautions that FFO as presented, may not be comparable to similarly titled measures reported by other REITs.
5
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Reconciliation of net (loss) income attributable to the Company to FFO attributable to common stockholders and unit holdersbasic and diluted (c):
For the Three Months Ended March 31, |
||||||||
Unaudited | ||||||||
2018 | 2017 | |||||||
Net (loss) income attributable to the Company |
($ | 33,573 | ) | $ | 69,243 | |||
Adjustments to reconcile net (loss) income attributable to the Company to FFO attributable to common stockholders and unit holdersbasic and diluted: |
||||||||
Noncontrolling interests in the OP |
(2,450 | ) | 5,108 | |||||
Loss (gain) on sale or write down of consolidated assets, net |
37,512 | (49,565 | ) | |||||
Add: gain on undepreciated asset sales from consolidated assets |
807 | | ||||||
Loss on write-down of consolidated non-real estate assets |
| (10,138 | ) | |||||
Noncontrolling interests share of gain on sale or write-down of consolidated joint ventures |
590 | | ||||||
Loss (gain) on sale or write down of assets from unconsolidated joint ventures (pro rata), net |
157 | (2,269 | ) | |||||
Add: (loss) gain on sales or write down of undepreciated assets from unconsolidated joint ventures (pro rata), net |
(2,085 | ) | 660 | |||||
Depreciation and amortization on consolidated assets |
79,937 | 83,073 | ||||||
Less depreciation and amortization allocable to noncontrolling interests in consolidated joint ventures |
(3,641 | ) | (3,893 | ) | ||||
Depreciation and amortization on unconsolidated joint ventures (pro rata) |
43,584 | 44,765 | ||||||
Less: depreciation on personal property |
(3,345 | ) | (3,381 | ) | ||||
Financing expense in connection with the adoption of ASC 606 (Chandler Freehold) |
6,020 | | ||||||
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FFO attributable to common stockholders and unit holdersbasic and diluted |
$ | 123,513 | $ | 133,603 | ||||
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Reconciliation of EPS to FFO per diluted share (c):
For the Three Months Ended March 31, |
||||||||
Unaudited | ||||||||
2018 | 2017 | |||||||
EPSdiluted |
($ | 0.24 | ) | $ | 0.48 | |||
Per share impact of depreciation and amortization of real estate |
0.77 | 0.78 | ||||||
Per share impact of loss (gain) on sale or write down of assets, net |
0.25 | (0.39 | ) | |||||
Per share impact of financing expense in connection with the adoption of ASC 606 (Chandler Freehold) |
0.04 | | ||||||
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FFO per sharediluted |
$ | 0.82 | $ | 0.87 | ||||
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6
THE MACERICH COMPANY
FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Reconciliation of Net (loss) income attributable to the Company to Adjusted EBITDA:
For the Three Months Ended March 31, |
||||||||
Unaudited | ||||||||
2018 | 2017 | |||||||
Net (loss) income attributable to the Company |
($ | 33,573 | ) | $ | 69,243 | |||
Interest expenseconsolidated assets |
52,635 | 41,301 | ||||||
Interest expenseunconsolidated joint ventures (pro rata) |
25,433 | 25,306 | ||||||
Depreciation and amortizationconsolidated assets |
79,937 | 83,073 | ||||||
Depreciation and amortizationunconsolidated joint ventures (pro rata) |
43,584 | 44,765 | ||||||
Noncontrolling interests in the OP |
(2,450 | ) | 5,108 | |||||
Less: Interest expense and depreciation and amortization allocable to noncontrolling interests in consolidated joint ventures |
(8,781 | ) | (6,212 | ) | ||||
(Gain) loss on sale or write down of assets, netconsolidated assets |
37,512 | (49,565 | ) | |||||
Loss (gain) on sale or write down of assets, netunconsolidated joint ventures (pro rata) |
157 | (2,269 | ) | |||||
Add: Noncontrolling interests share of gain on sale or write down of consolidated joint ventures, net |
590 | | ||||||
Income tax benefit |
(2,949 | ) | (3,484 | ) | ||||
Distributions on preferred units |
99 | 96 | ||||||
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Adjusted EBITDA (d) |
$ | 192,194 | $ | 207,362 | ||||
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Reconciliation of Adjusted EBITDA to Net Operating Income (NOI) and to NOI - Same Centers:
For the Three Months Ended March 31, |
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Unaudited | ||||||||
2018 | 2017 | |||||||
Adjusted EBITDA (d) |
$ | 192,194 | $ | 207,362 | ||||
REIT general and administrative expenses |
8,019 | 8,463 | ||||||
Management Companies revenues |
(10,542 | ) | (11,896 | ) | ||||
Management Companies operating expenses |
38,323 | 28,517 | ||||||
Straight-line and above/below market adjustments |
(8,172 | ) | (7,414 | ) | ||||
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NOIAll Centers |
219,822 | 225,032 | ||||||
NOI of non-Same Centers |
(7,283 | ) | (12,646 | ) | ||||
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NOISame Centers (e) |
$ | 212,539 | $ | 212,386 | ||||
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(d) | Adjusted EBITDA represents earnings before interest, income taxes, depreciation, amortization, noncontrolling interests in the OP, extraordinary items, loss (gain) on remeasurement, sale or write down of assets, loss (gain) on extinguishment of debt and preferred dividends and includes joint ventures at their pro rata share. Management considers Adjusted EBITDA to be an appropriate supplemental measure to net income because it helps investors understand the ability of the Company to incur and service debt and make capital expenditures. The Company believes that Adjusted EBITDA should not be construed as an alternative to operating income as an indicator of the Companys operating performance, or to cash flows from operating activities (as determined in accordance with GAAP) or as a measure of liquidity. The Company also cautions that Adjusted EBITDA, as presented, may not be comparable to similarly titled measurements reported by other companies. |
(e) | The Company presents Same Center NOI because the Company believes it is useful for investors to evaluate the operating performance of comparable centers. Same Center NOI is calculated using total Adjusted EBITDA and eliminating the impact of the management companies revenues and operating expenses, the Companys general and administrative expenses and the straight-line and above/below market adjustments to minimum rents and subtracting out NOI from non-Same Centers. |
7
Exhibit 99.2
Supplemental Financial Information
For the three months ended March 31, 2018
The Macerich Company
Supplemental Financial and Operating Information
Table of Contents
All information included in this supplemental financial package is unaudited, unless otherwise indicated.
Page No. | ||||
Corporate Overview |
1-4 | |||
Overview |
1-2 | |||
Capital Information and Market Capitalization |
3 | |||
Changes in Total Common and Equivalent Shares/Units |
4 | |||
Financial Data |
5-11 | |||
Consolidated Statements of Operations (Unaudited) |
5 | |||
Consolidated Balance Sheet (Unaudited) |
6 | |||
Non-GAAP Pro Rata Financial Information (Unaudited) |
7-8 | |||
2018 Guidance Range |
9 | |||
Supplemental FFO Information |
10 | |||
Capital Expenditures |
11 | |||
Operational Data |
12-26 | |||
Sales Per Square Foot |
12 | |||
Sales Per Square Foot by Property Ranking |
13-16 | |||
Occupancy |
17 | |||
Average Base Rent Per Square Foot |
18 | |||
Cost of Occupancy |
19 | |||
Percentage of Net Operating Income by State |
20 | |||
Property Listing |
21-24 | |||
Joint Venture List |
25-26 | |||
Debt Tables |
27-29 | |||
Debt Summary |
27 | |||
Outstanding Debt by Maturity Date |
28-29 | |||
Development Pipeline |
30 | |||
Corporate Information |
31 |
This Supplemental Financial Information should be read in connection with the Companys first quarter 2018 earnings announcement (included as Exhibit 99.1 of the Companys Current Report on 8-K, event date May 2, 2018) as certain disclosures, definitions and reconciliations in such announcement have not been included in this Supplemental Financial Information.
The Macerich Company
Supplemental Financial and Operating Information
Overview
The Macerich Company (the Company) is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community/power shopping centers located throughout the United States. The Company is the sole general partner of, and owns a majority of the ownership interests in, The Macerich Partnership, L.P., a Delaware limited partnership (the Operating Partnership).
As of March 31, 2018, the Operating Partnership owned or had an ownership interest in 48 regional shopping centers and seven community/power shopping centers aggregating approximately 53 million square feet of gross leasable area (GLA). These 55 centers (which include any related office space) are referred to hereinafter as the Centers, unless the context requires otherwise.
The Company is a self-administered and self-managed real estate investment trust (REIT) and conducts all of its operations through the Operating Partnership and the Companys management companies (collectively, the Management Companies).
All references to the Company in this Exhibit include the Company, those entities owned or controlled by the Company and predecessors of the Company, unless the context indicates otherwise.
Upon adoption of ASC Topic 606, Revenue from Contracts with Customers (ASC 606), on January 1, 2018, the Company changed its accounting for its investment in the Chandler Fashion Center and Freehold Raceway Mall (Chandler Freehold) joint venture from a co-venture arrangement to a financing arrangement. Accordingly, the Company replaced its $31.1 million co-venture asset with a $393.7 million financing arrangement liability on its consolidated balance sheets and recorded a charge of $424.8 million to equity as a cumulative effect adjustment. Under ASC 606, any subsequent changes in fair value of the financing arrangement liability are recognized as financing expense in the Companys consolidated statements of operations. During the three months ended March 31, 2018, the Company has included in interest expense $8.0 million in connection with the financing arrangement that consists of i) a charge of $4.4 million to adjust the fair value of the financing arrangement obligation, ii) distributions of $2.0 million to its partner representing the partners share of net income and iii) distributions of $1.6 million to its partner in excess of the partners share of net income.
The Company presents certain measures in this Exhibit on a pro rata basis which represents (i) the measure on a consolidated basis, minus the Companys partners share of the measure from its consolidated joint ventures (calculated based upon the partners percentage ownership interest); plus (ii) the Companys share of the measure from its unconsolidated joint ventures (calculated based upon the Companys percentage ownership interest). Management believes that these measures provide useful information to investors regarding its financial condition and/or results of operations because they include the Companys share of the applicable amount from unconsolidated joint ventures and exclude the Companys partners share from consolidated joint ventures, in each case presented on the same basis. The Company has several significant joint ventures and the Company believes that presenting various measures in this manner can help investors better understand the Companys financial condition and/or results of operations after taking into account its economic interest in these joint ventures. Management also uses these measures to evaluate regional property level performance and to make decisions about resource allocations. The Companys economic interest (as distinct from its legal ownership interest) in certain of its joint ventures could fluctuate from time to time and may not wholly align with its legal ownership interests because of provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses, payments of preferred returns and control over major decisions. Additionally, the Company does not control its unconsolidated joint ventures and the presentation of certain items, such as assets, liabilities, revenues and expenses, from these unconsolidated joint ventures does not represent the Companys legal claim to such items.
1
This document contains information constituting forward-looking statements and includes expectations regarding the Companys future operational results as well as development, redevelopment and expansion activities. Stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to vary materially from those anticipated, expected or projected. Such factors include, among others, general industry, economic and business conditions, which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of current and prospective tenants, anchor or tenant bankruptcies, closures, mergers or consolidations, lease rates, terms and payments, interest rate fluctuations, availability, terms and cost of financing, operating expenses, and competition; adverse changes in the real estate markets, including the liquidity of real estate investments; and risks of real estate development, redevelopment, and expansion, including availability, terms and cost of financing, construction delays, environmental and safety requirements, budget overruns, sunk costs and lease-up; the inability to obtain, or delays in obtaining, all necessary zoning, land-use, building, and occupancy and other required governmental permits and authorizations; and governmental actions and initiatives (including legislative and regulatory changes) as well as terrorist activities or other acts of violence which could adversely affect all of the above factors. Furthermore, occupancy rates and rents at a newly completed property may not be sufficient to make the property profitable. The reader is directed to the Companys various filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2017, for a discussion of such risks and uncertainties, which discussion is incorporated herein by reference. The Company does not intend, and undertakes no obligation, to update any forward-looking information to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events unless required by law to do so.
2
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Capital Information and Market Capitalization
Period Ended | ||||||||||||
3/31/2018 | 12/31/2017 | 12/31/2016 | ||||||||||
dollars in thousands, except per share data | ||||||||||||
Closing common stock price per share |
$ | 56.02 | $ | 65.68 | $ | 70.84 | ||||||
52 week high |
$ | 69.73 | $ | 73.34 | $ | 94.51 | ||||||
52 week low |
$ | 52.12 | $ | 52.12 | $ | 66.00 | ||||||
Shares outstanding at end of period |
||||||||||||
Class A non-participating convertible preferred units |
90,619 | 90,619 | 90,619 | |||||||||
Common shares and partnership units |
151,461,551 | 151,253,557 | 154,567,331 | |||||||||
|
|
|
|
|
|
|||||||
Total common and equivalent shares/units outstanding |
151,552,170 | 151,344,176 | 154,657,950 | |||||||||
|
|
|
|
|
|
|||||||
Portfolio capitalization data |
||||||||||||
Total portfolio debt, including joint ventures at pro rata |
$ | 7,662,497 | $ | 7,692,719 | $ | 7,548,481 | ||||||
Equity market capitalization |
8,489,953 | 9,940,285 | 10,955,969 | |||||||||
|
|
|
|
|
|
|||||||
Total market capitalization |
$ | 16,152,450 | $ | 17,633,004 | $ | 18,504,450 | ||||||
|
|
|
|
|
|
|||||||
Debt as a percentage of total market capitalization |
47.4 | % | 43.6 | % | 40.8 | % |
Portfolio Capitalization at March 31, 2018
3
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Changes in Total Common and Equivalent Shares/Units
Partnership Units |
Company Common Shares |
Class A Non-Participating Convertible Preferred Units |
Total Common and Equivalent Shares/ Units |
|||||||||||||
Balance as of December 31, 2017 |
10,259,572 | 140,993,985 | 90,619 | 151,344,176 | ||||||||||||
Conversion of partnership units to cash |
(1,015 | ) | | | (1,015 | ) | ||||||||||
Conversion of partnership units to common shares |
(1,000 | ) | 1,000 | | | |||||||||||
Issuance of stock/partnership units from restricted stock issuance or other share or unit-based plans |
99,407 | 109,602 | | 209,009 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as of March 31, 2018 |
10,356,964 | 141,104,587 | 90,619 | 151,552,170 | ||||||||||||
|
|
|
|
|
|
|
|
4
The Macerich Company
Consolidated Statements of Operations (Unaudited)
(Dollars in thousands)
For the Three Months Ended March 31, 2018 |
||||
Revenues: |
||||
Minimum rents |
$ | 142,407 | ||
Percentage rents |
1,884 | |||
Tenant recoveries |
68,092 | |||
Other income |
13,809 | |||
Management Companies revenues |
10,542 | |||
|
|
|||
Total revenues |
236,734 | |||
|
|
|||
Expenses: |
||||
Shopping center and operating expenses |
74,510 | |||
Management Companies operating expenses |
38,323 | |||
REIT general and administrative expenses |
8,019 | |||
Depreciation and amortization |
79,937 | |||
Interest expense |
52,635 | |||
|
|
|||
Total expenses |
253,424 | |||
Equity in income of unconsolidated joint ventures |
16,872 | |||
Income tax benefit |
2,949 | |||
Loss on sale or write down of assets, net |
(37,512 | ) | ||
|
|
|||
Net (loss) income |
(34,381 | ) | ||
Less net (loss) income attributable to noncontrolling interests |
(808 | ) | ||
|
|
|||
Net (loss) income attributable to the Company |
$ | (33,573 | ) | |
|
|
5
The Macerich Company
Consolidated Balance Sheet (Unaudited)
As of March 31, 2018
(Dollars in thousands)
ASSETS: |
||||
Property, net (a) |
$ | 6,908,416 | ||
Assets held for sale |
142,611 | |||
Cash and cash equivalents |
118,175 | |||
Restricted cash |
49,677 | |||
Tenant and other receivables, net |
94,081 | |||
Deferred charges and other assets, net |
399,153 | |||
Due from affiliates |
84,674 | |||
Investments in unconsolidated joint ventures |
1,360,486 | |||
|
|
|||
Total assets |
$ | 9,157,273 | ||
|
|
|||
LIABILITIES AND EQUITY: |
||||
Mortgage notes payable |
$ | 4,246,247 | ||
Bank and other notes payable |
657,594 | |||
Accounts payable and accrued expenses |
67,430 | |||
Other accrued liabilities |
285,447 | |||
Distributions in excess of investments in unconsolidated joint ventures |
93,879 | |||
Financing arrangement obligation |
398,091 | |||
|
|
|||
Total liabilities |
5,748,688 | |||
|
|
|||
Commitments and contingencies |
||||
Equity: |
||||
Stockholders equity: |
||||
Common stock |
1,411 | |||
Additional paid-in capital |
4,549,748 | |||
Accumulated deficit |
(1,393,418 | ) | ||
Accumulated other comprehensive income |
19 | |||
|
|
|||
Total stockholders equity |
3,157,760 | |||
Noncontrolling interests |
250,825 | |||
|
|
|||
Total equity |
3,408,585 | |||
|
|
|||
Total liabilities and equity |
$ | 9,157,273 | ||
|
|
(a) | Includes construction in progress of $391,222. |
6
The Macerich Company
Non-GAAP Pro Rata Financial Information (Unaudited)
(Dollars in thousands)
For the Three Months Ended March 31, 2018 |
||||||||
Noncontrolling Interests of Consolidated Joint Ventures (a) |
Companys Share of Unconsolidated Joint Ventures |
|||||||
Revenues: |
||||||||
Minimum rents |
$ | (8,432 | ) | $ | 83,407 | |||
Percentage rents |
(141 | ) | 1,152 | |||||
Tenant recoveries |
(4,264 | ) | 30,932 | |||||
Other income |
(583 | ) | 6,284 | |||||
|
|
|
|
|||||
Total revenues |
(13,420 | ) | 121,775 | |||||
|
|
|
|
|||||
Expenses: |
||||||||
Shopping center and operating expenses |
(4,165 | ) | 36,307 | |||||
Depreciation and amortization |
(3,641 | ) | 43,584 | |||||
Interest expense |
(5,140 | ) | 25,433 | |||||
|
|
|
|
|||||
Total expenses |
(12,946 | ) | 105,324 | |||||
Equity in income of unconsolidated joint ventures |
(578 | ) | (16,294 | ) | ||||
Loss on sale or write down of assets, net |
(590 | ) | (157 | ) | ||||
|
|
|
|
|||||
Net income |
(1,642 | ) | | |||||
Less net income attributable to noncontrolling interests |
(1,642 | ) | | |||||
|
|
|
|
|||||
Net income attributable to the Company |
$ | | $ | | ||||
|
|
|
|
(a) | Represents the Companys partners share of consolidated joint ventures. |
7
The Macerich Company
Non-GAAP Pro Rata Financial Information (Unaudited)
(Dollars in thousands)
As of March 31, 2018 | ||||||||
Noncontrolling Interests of Consolidated Joint Ventures (a) |
Companys Share of Unconsolidated Joint Ventures |
|||||||
ASSETS: |
||||||||
Property, net (b) |
$ | (366,549 | ) | $ | 4,340,524 | |||
Assets held for sale |
(106,994 | ) | | |||||
Cash and cash equivalents |
(14,469 | ) | 109,109 | |||||
Restricted cash |
| 5,535 | ||||||
Tenant and other receivables, net |
(17,942 | ) | 52,720 | |||||
Deferred charges and other assets, net |
(4,310 | ) | 146,291 | |||||
Due from affiliates |
446 | (3,546 | ) | |||||
Investments in unconsolidated joint ventures, at equity |
| (1,360,486 | ) | |||||
|
|
|
|
|||||
Total assets |
$ | (509,818 | ) | $ | 3,290,147 | |||
|
|
|
|
|||||
LIABILITIES AND EQUITY: |
||||||||
Mortgage notes payable |
$ | (422,326 | ) | $ | 3,123,246 | |||
Bank and other notes payable |
(2,264 | ) | 60,000 | |||||
Accounts payable and accrued expenses |
(3,967 | ) | 52,003 | |||||
Other accrued liabilities |
(38,593 | ) | 148,777 | |||||
Distributions in excess of investments in unconsolidated joint ventures |
| (93,879 | ) | |||||
Financing arrangement obligation |
(398,091 | ) | | |||||
|
|
|
|
|||||
Total liabilities |
(865,241 | ) | 3,290,147 | |||||
|
|
|
|
|||||
Equity: |
||||||||
Stockholders equity |
374,399 | | ||||||
Noncontrolling interests |
(18,976 | ) | | |||||
|
|
|
|
|||||
Total equity |
355,423 | | ||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | (509,818 | ) | $ | 3,290,147 | |||
|
|
|
|
(a) | Represents the Companys partners share of consolidated joint ventures. |
(b) | This includes $15,666 of construction in progress relating to the Companys partners share from consolidated joint ventures and $213,575 of construction in progress relating to the Companys share from unconsolidated joint ventures. |
8
The Macerich Company
2018 Guidance Range (Unaudited)
Managements previously provided diluted FFO per share guidance for 2018 remains unchanged. EPS is changing to the range reflected below. A reconciliation of estimated EPS to FFO per share-diluted follows:
Year 2018 Guidance |
||||
Earnings Expectations: |
||||
Earnings per sharediluted |
$0.49 - $0.59 | |||
Plus: real estate depreciation and amortization |
3.15 - 3.15 | |||
Plus: loss on sale or write-down of depreciable assets |
0.24 - 0.24 | |||
Plus: financing expense in connection with the adoption of ASC 606 (Chandler Freehold) |
0.04 - 0.04 | |||
|
|
|||
FFO per sharediluted |
$3.92 - $4.02 | |||
|
|
|||
Underlying Assumptions to 2018 Guidance |
||||
Cash Same Center Net Operating Income (NOI) Growth(a) |
2.0% - 2.5% | |||
Assumed 2018 dispositions |
None |
Year 2018 ($ millions)(b) |
Year 2018 FFO / Share Impact | |||||
Lease termination income |
$22 | $0.15 | ||||
Capitalized interest |
$25 | $0.17 | ||||
Bad debt expense |
($5) | ($0.03) | ||||
Dilutive impact on 2018 of assets sold in 2017 |
($1.5) | ($0.01) | ||||
Straight-line rent |
$20 | $0.13 | ||||
Amortization of acquired above and below-market leases (net-revenue) |
$12 | $0.08 | ||||
Interest Expense(c) |
$279 |
(a) | Excludes non-cash items of straight-line and above/below market adjustments to minimum rents. Includes lease termination income. |
(b) | All joint venture amounts included at pro rata. |
(c) | Excludes financing expense in connection with the adoption of ASC 606 (Chandler Freehold). |
9
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Supplemental FFO Information(a)
As of March 31, | ||||||||
2018 | 2017 | |||||||
dollars in millions | ||||||||
Straight-line rent receivable |
$ | 100.5 | $ | 86.0 |
For the Three Months Ended March 31, |
||||||||
2018 | 2017 | |||||||
dollars in millions | ||||||||
Lease termination income |
$ | 2.9 | $ | 2.7 | ||||
Straight-line rental income |
$ | 4.2 | $ | 3.6 | ||||
(Loss) gain on sales or write down of undepreciated assets |
$ | (1.3 | ) | $ | 0.7 | |||
Amortization of acquired above and below-market leases (net-revenue) |
$ | 4.0 | $ | 3.8 | ||||
Amortization of debt premiums |
$ | 0.2 | $ | 0.9 | ||||
Interest capitalized |
$ | 6.7 | $ | 3.9 |
(a) | All joint venture amounts included at pro rata. |
10
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Capital Expenditures(a)
For the Three Months Ended |
Year Ended 12/31/17 |
Year Ended 12/31/16 |
||||||||||||||
3/31/18 | 3/31/17 | |||||||||||||||
dollars in millions | ||||||||||||||||
Consolidated Centers |
||||||||||||||||
Acquisitions of property and equipment |
$ | 4.8 | $ | 4.4 | $ | 38.2 | $ | 56.8 | ||||||||
Development, redevelopment, expansions and renovations of Centers |
37.7 | 18.5 | 152.1 | 183.2 | ||||||||||||
Tenant allowances |
2.1 | 1.5 | 11.5 | 19.2 | ||||||||||||
Deferred leasing charges |
5.0 | 5.0 | 26.5 | 24.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 49.6 | $ | 29.4 | $ | 228.3 | $ | 284.0 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Unconsolidated Joint Venture Centers |
||||||||||||||||
Acquisitions of property and equipment |
$ | 1.9 | $ | 0.6 | $ | 16.0 | $ | 349.8 | ||||||||
Development, redevelopment, expansions and renovations of Centers |
25.9 | 29.9 | 121.8 | 101.1 | ||||||||||||
Tenant allowances |
0.9 | 0.9 | 6.8 | 11.3 | ||||||||||||
Deferred leasing charges |
2.8 | 2.1 | 6.2 | 7.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 31.5 | $ | 33.5 | $ | 150.8 | $ | 469.3 | ||||||||
|
|
|
|
|
|
|
|
(a) | All joint venture amounts at pro rata. |
11
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Regional Shopping Center Portfolio
Sales Per Square Foot(a)
Consolidated Centers |
Unconsolidated Joint Venture Centers |
Total Centers |
||||||||||
03/31/2018 |
$ | 598 | $ | 808 | $ | 686 | ||||||
03/31/2017 |
$ | 578 | $ | 726 | $ | 639 | ||||||
12/31/2017 |
$ | 584 | $ | 765 | $ | 660 | ||||||
12/31/2016(b) |
$ | 573 | $ | 710 | $ | 630 | ||||||
12/31/2015(c) |
$ | 579 | $ | 763 | $ | 635 | ||||||
12/31/2014(d) |
$ | 556 | $ | 724 | $ | 587 |
(a) | Sales are based on reports by retailers leasing mall and freestanding stores for the trailing 12 months for tenants which have occupied such stores for a minimum of 12 months. Sales per square foot are based on tenants 10,000 square feet and under for regional shopping centers. Sales per square foot exclude Centers under development and redevelopment. |
(b) | Cascade Mall and Northgate Mall were under contract to be sold in December 2016 and sold in January 2017. These two Centers are excluded from sales per square foot as of December 31, 2016. |
(c) | On July 15, 2016, the Company conveyed Flagstaff Mall to the mortgage lender by a deed-in-lieu of foreclosure. Flagstaff Mall is excluded from sales per square foot as of December 31, 2015. |
(d) | On June 30, 2015, the Company conveyed Great Northern Mall to the mortgage lender by a deed-in-lieu of foreclosure. Great Northern Mall is excluded from Sales per square foot as of December 31, 2014. |
12
Sales Per Square Foot by Property Ranking (Unaudited)
Sales per square foot | Occupancy | Cost of Occupancy for the trailing 12 months Ended 3/31/2018 (c) |
% of Portfolio 2018 Forecast Pro Rata Real Estate NOI (d) |
|||||||||||||||||||||||||||||
Properties |
3/31/2018 (a) |
12/31/2017 (a) |
3/31/2017 (a) |
3/31/2018 (b) |
12/31/2017 (b) |
3/31/2017 (b) |
||||||||||||||||||||||||||
Group 1: Top 10 |
||||||||||||||||||||||||||||||||
Corte Madera, Village at |
$ | 1,646 | $ | 1,532 | $ | 1,452 | 94.0 | % | 97.4 | % | 94.3 | % | ||||||||||||||||||||
Queens Center |
$ | 1,473 | $ | 1,461 | $ | 1,386 | 98.5 | % | 99.5 | % | 97.1 | % | ||||||||||||||||||||
Broadway Plaza (e) |
$ | 1,325 | $ | 1,326 | n/a | 97.8 | % | 97.6 | % | n/a | ||||||||||||||||||||||
Washington Square |
$ | 1,156 | $ | 1,119 | $ | 1,047 | 96.0 | % | 95.2 | % | 97.8 | % | ||||||||||||||||||||
Tysons Corner Center |
$ | 990 | $ | 980 | $ | 955 | 95.1 | % | 96.6 | % | 95.8 | % | ||||||||||||||||||||
Los Cerritos Center |
$ | 966 | $ | 947 | $ | 943 | 97.0 | % | 96.3 | % | 95.2 | % | ||||||||||||||||||||
Biltmore Fashion Park |
$ | 981 | $ | 913 | $ | 845 | 93.0 | % | 95.6 | % | 96.3 | % | ||||||||||||||||||||
North Bridge, The Shops at |
$ | 880 | $ | 875 | $ | 908 | 95.4 | % | 98.8 | % | 98.3 | % | ||||||||||||||||||||
Santa Monica Place |
$ | 802 | $ | 808 | $ | 818 | 89.1 | % | 89.2 | % | 83.3 | % | ||||||||||||||||||||
Tucson La Encantada |
$ | 841 | $ | 785 | $ | 759 | 91.7 | % | 94.2 | % | 91.5 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Top 10: |
$ | 1,108 | $ | 1,081 | $ | 1,027 | 95.2 | % | 96.3 | % | 95.1 | % | 13.2 | % | 30.5 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Group 2: Top 11-20 |
||||||||||||||||||||||||||||||||
Fashion Outlets of Chicago |
$ | 810 | $ | 782 | $ | 771 | 95.5 | % | 95.9 | % | 96.7 | % | ||||||||||||||||||||
Arrowhead Towne Center |
$ | 784 | $ | 770 | $ | 774 | 96.7 | % | 95.5 | % | 93.6 | % | ||||||||||||||||||||
Scottsdale Fashion Square |
$ | 1,008 | $ | 765 | $ | 736 | 88.2 | % | 91.3 | % | 94.6 | % | ||||||||||||||||||||
Fresno Fashion Fair |
$ | 734 | $ | 735 | $ | 723 | 93.1 | % | 94.3 | % | 95.7 | % | ||||||||||||||||||||
Kings Plaza Shopping Center |
$ | 682 | $ | 686 | $ | 690 | 98.0 | % | 96.6 | % | 94.2 | % | ||||||||||||||||||||
Vintage Faire Mall |
$ | 694 | $ | 685 | $ | 704 | 98.0 | % | 98.1 | % | 96.7 | % | ||||||||||||||||||||
Kierland Commons |
$ | 718 | $ | 678 | $ | 681 | 93.9 | % | 96.2 | % | 93.2 | % | ||||||||||||||||||||
Chandler Fashion Center |
$ | 685 | $ | 674 | $ | 672 | 95.9 | % | 94.7 | % | 95.8 | % | ||||||||||||||||||||
Twenty Ninth Street |
$ | 667 | $ | 647 | $ | 645 | 94.7 | % | 97.3 | % | 97.8 | % | ||||||||||||||||||||
Country Club Plaza |
n/a | n/a | n/a | n/a | n/a | n/a | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Top 11-20: |
$ | 763 | $ | 714 | $ | 700 | 93.6 | % | 94.8 | % | 94.3 | % | 12.4 | % | 25.7 | % | ||||||||||||||||
|
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|
|
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|
|
|
13
The Macerich Company
Sales Per Square Foot by Property Ranking (Unaudited)
Sales per square foot | Occupancy | Cost of Occupancy for the trailing 12 months Ended 3/31/2018 (c) |
% of Portfolio 2018 Forecast Pro Rata Real Estate NOI (d) |
|||||||||||||||||||||||||||||
Properties |
3/31/2018 (a) |
12/31/2017 (a) |
3/31/2017 (a) |
3/31/2018 (b) |
12/31/2017 (b) |
3/31/2017 (b) |
||||||||||||||||||||||||||
Group 3: Top 21-30 |
||||||||||||||||||||||||||||||||
Stonewood Center |
$ | 662 | $ | 638 | $ | 602 | 92.4 | % | 93.1 | % | 91.2 | % | ||||||||||||||||||||
Freehold Raceway Mall |
$ | 638 | $ | 622 | $ | 630 | 97.0 | % | 97.0 | % | 97.2 | % | ||||||||||||||||||||
Green Acres Mall |
$ | 646 | $ | 615 | $ | 626 | 97.9 | % | 97.9 | % | 96.1 | % | ||||||||||||||||||||
Danbury Fair Mall |
$ | 622 | $ | 614 | $ | 646 | 91.0 | % | 92.1 | % | 94.2 | % | ||||||||||||||||||||
Oaks, The |
$ | 629 | $ | 571 | $ | 518 | 87.3 | % | 93.0 | % | 94.2 | % | ||||||||||||||||||||
FlatIron Crossing |
$ | 575 | $ | 558 | $ | 550 | 96.0 | % | 96.7 | % | 94.7 | % | ||||||||||||||||||||
SanTan Village Regional Center |
$ | 559 | $ | 548 | $ | 524 | 97.3 | % | 97.6 | % | 97.5 | % | ||||||||||||||||||||
Inland Center |
$ | 544 | $ | 542 | $ | 525 | 87.3 | % | 95.3 | % | 91.6 | % | ||||||||||||||||||||
Victor Valley, Mall of |
$ | 544 | $ | 534 | $ | 537 | 96.8 | % | 97.9 | % | 97.6 | % | ||||||||||||||||||||
Deptford Mall |
$ | 535 | $ | 526 | $ | 555 | 97.0 | % | 98.0 | % | 96.9 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Top 21-30: |
$ | 601 | $ | 581 | $ | 577 | 94.7 | % | 96.0 | % | 95.5 | % | 14.0 | % | 25.0 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Group 4: Top 31-40 |
||||||||||||||||||||||||||||||||
La Cumbre Plaza |
$ | 480 | $ | 486 | $ | 472 | 89.0 | % | 88.0 | % | 88.0 | % | ||||||||||||||||||||
Lakewood Center |
$ | 488 | $ | 479 | $ | 482 | 95.3 | % | 97.4 | % | 97.2 | % | ||||||||||||||||||||
West Acres |
$ | 468 | $ | 477 | $ | 492 | 97.5 | % | 96.5 | % | 95.6 | % | ||||||||||||||||||||
Valley River Center |
$ | 446 | $ | 451 | $ | 460 | 95.2 | % | 96.9 | % | 99.5 | % | ||||||||||||||||||||
South Plains Mall |
$ | 446 | $ | 433 | $ | 420 | 90.1 | % | 91.5 | % | 90.5 | % | ||||||||||||||||||||
Pacific View |
$ | 428 | $ | 427 | $ | 442 | 95.0 | % | 95.1 | % | 94.3 | % | ||||||||||||||||||||
Superstition Springs Center |
$ | 364 | $ | 376 | $ | 377 | 90.4 | % | 89.5 | % | 90.3 | % | ||||||||||||||||||||
Eastland Mall |
$ | 363 | $ | 360 | $ | 368 | 95.2 | % | 96.7 | % | 94.9 | % | ||||||||||||||||||||
Fashion Outlets of Niagara Falls USA |
$ | 354 | $ | 351 | $ | 340 | 93.5 | % | 90.2 | % | 92.1 | % | ||||||||||||||||||||
Desert Sky Mall |
$ | 327 | $ | 321 | $ | 342 | 96.5 | % | 98.5 | % | 97.6 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Top 31-40: |
$ | 417 | $ | 415 | $ | 417 |
|
94.1 |
% |
|
94.5 |
% |
94.4 | % | 13.5 | % | 13.6 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Top 40: |
$ | 711 | $ | 684 | $ | 662 | 94.4 | % | 95.4 | % | 94.8 | % | 13.2 | % | 94.8 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
The Macerich Company
Sales Per Square Foot by Property Ranking (Unaudited)
Sales per square foot | Occupancy |
Cost of Occupancy Ended 3/31/2018 |
% of Portfolio 2018 Forecast Pro Rata Real Estate NOI (d) |
|||||||||||||||||||||||||||||
Properties |
3/31/2018 (a) |
12/31/2017 (a) |
3/31/2017 (a) |
3/31/2018 (b) |
12/31/2017 (b) |
3/31/2017 (b) |
||||||||||||||||||||||||||
Group 5: 41-45 |
||||||||||||||||||||||||||||||||
NorthPark Mall |
||||||||||||||||||||||||||||||||
SouthPark Mall |
||||||||||||||||||||||||||||||||
Towne Mall |
||||||||||||||||||||||||||||||||
Valley Mall |
||||||||||||||||||||||||||||||||
Wilton Mall |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total 41-45: |
$ | 286 | $ | 281 | $ | 290 | 89.9 | % | 89.6 | % | 88.3 | % | 11.3 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Centers under Redevelopment |
||||||||||||||||||||||||||||||||
Fashion District Philadelphia (e) (f) |
||||||||||||||||||||||||||||||||
Paradise Valley Mall (e) |
||||||||||||||||||||||||||||||||
Westside Pavilion (e) |
||||||||||||||||||||||||||||||||
48 REGIONAL SHOPPING CENTERS (g) |
$ | 686 | $ | 660 | $ | 639 | 94.0 | % | 95.0 | % | 94.3 | % | 13.1 | % | 98.3 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Community / Power Centers and various other assets |
1.7 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||
TOTAL ALL PROPERTIES |
13.1 | % | 100.0 | % | ||||||||||||||||||||||||||||
|
|
|
|
15
The Macerich Company
Notes to Sales Per Square Foot by Property Ranking (unaudited)
Footnotes
(a) | Sales are based on reports by retailers leasing mall and freestanding stores for the trailing 12 months for tenants which have occupied such stores for a minimum of 12 months. Sales per square foot are based on tenants 10,000 square feet and under. Properties are ranked by Sales per square foot as of December 31, 2017. |
(b) | Occupancy is the percentage of mall and freestanding GLA leased as of the last day of the reporting period. Occupancy excludes Centers under development and redevelopment. |
(c) | Cost of Occupancy represents Tenant Occupancy Costs divided by Tenant Sales. Tenant Occupancy Costs in this calculation are the amounts paid to the Company, including minimum rents, percentage rents and recoverable expenditures, which consist primarily of property operating expenses, real estate taxes and repair and maintenance expenditures. |
(d) | The percentage of Portfolio 2018 Forecast Pro Rata Real Estate NOI is based on the guidance range reaffirmed on May 2, 2018, see page 9. Real Estate NOI excludes straight-line and above/below market adjustments to minimum rents. Real Estate NOI also does not reflect REIT expenses and Management Company revenues and expenses. See the Companys forward-looking statements disclosure on pages 1 and 2 for factors that may affect the information provided in this column. |
(e) | These assets are (or were previously) under redevelopment including demolition and reconfiguration of the Centers and tenant spaces, accordingly the Sales per square foot and Occupancy during the periods of redevelopment are not included. |
(f) | On July 30, 2014, the Company formed a joint venture to redevelop and rebrand The Gallery in Philadelphia, Pennsylvania. |
(g) | Properties sold prior to March 31, 2018 are excluded in both current and prior periods above. |
16
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Occupancy(a)
Regional Shopping Centers: |
Consolidated Centers |
Unconsolidated Joint Venture Centers |
Total Centers |
|||||||||
03/31/2018 |
93.9 | % | 94.1 | % | 94.0 | % | ||||||
03/31/2017 |
93.9 | % | 94.8 | % | 94.3 | % | ||||||
12/31/2017 |
94.4 | % | 95.6 | % | 95.0 | % | ||||||
12/31/2016(b) |
94.8 | % | 96.2 | % | 95.4 | % |
(a) | Occupancy is the percentage of mall and freestanding GLA leased as of the last day of the reporting period. Occupancy excludes Centers under development and redevelopment. |
(b) | Cascade Mall and Northgate Mall were under contract to be sold in December 2016 and sold in January 2017. These two Centers are excluded from occupancy as of December 31, 2016. |
17
Supplemental Financial and Operating Information (unaudited)
Average Base Rent Per Square Foot(a)
Average Base Rent PSF(b) |
Average Base Rent PSF on Leases Executed during the trailing twelve months ended(c) |
Average Base Rent PSF on Leases Expiring(d) |
||||||||||
Consolidated Centers |
||||||||||||
03/31/2018 |
$ | 56.32 | $ | 57.33 | $ | 49.45 | ||||||
03/31/2017 |
$ | 54.93 | $ | 54.79 | $ | 45.54 | ||||||
12/31/2017 |
$ | 55.08 | $ | 57.36 | $ | 49.61 | ||||||
12/31/2016(e) |
$ | 53.51 | $ | 53.48 | $ | 44.77 | ||||||
Unconsolidated Joint Venture Centers |
||||||||||||
03/31/2018 |
$ | 62.91 | $ | 63.38 | $ | 56.67 | ||||||
03/31/2017 |
$ | 59.41 | $ | 62.72 | $ | 56.12 | ||||||
12/31/2017 |
$ | 60.99 | $ | 63.50 | $ | 55.50 | ||||||
12/31/2016 |
$ | 57.90 | $ | 64.78 | $ | 57.29 | ||||||
All Regional Shopping Centers |
||||||||||||
03/31/2018 |
$ | 58.44 | $ | 59.12 | $ | 51.55 | ||||||
03/31/2017 |
$ | 56.31 | $ | 56.93 | $ | 48.44 | ||||||
12/31/2017 |
$ | 56.97 | $ | 59.20 | $ | 51.39 | ||||||
12/31/2016(e) |
$ | 54.87 | $ | 56.57 | $ | 48.08 |
(a) | Average base rent per square foot is based on spaces 10,000 square feet and under. All joint venture amounts are included at pro rata. Centers under development and redevelopment are excluded. |
(b) | Average base rent per square foot gives effect to the terms of each lease in effect, as of the applicable date, including any concessions, abatements and other adjustments or allowances that have been granted to the tenants. |
(c) | The average base rent per square foot on leases executed during the period represents the actual rent to be paid during the first twelve months. |
(d) | The average base rent per square foot on leases expiring during the period represents the final year minimum rent on a cash basis. |
(e) | Cascade Mall and Northgate Mall were under contract to be sold in December 2016 and sold in January 2017. These two Centers are excluded from the table above as of December 31, 2016. |
18
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Cost of Occupancy
For the trailing twelve months ended March 31, 2018 |
For Years Ended December 31, | |||||||||||
2017 | 2016(a) | |||||||||||
Consolidated Centers |
||||||||||||
Minimum rents |
9.4 | % | 9.5 | % | 9.4 | % | ||||||
Percentage rents |
0.3 | % | 0.3 | % | 0.4 | % | ||||||
Expense recoveries(b) |
4.1 | % | 4.2 | % | 4.3 | % | ||||||
|
|
|
|
|
|
|||||||
Total |
13.8 | % | 14.0 | % | 14.1 | % | ||||||
|
|
|
|
|
|
|||||||
For the trailing twelve months ended March 31, 2018 |
For Years Ended December 31, | |||||||||||
2017 | 2016 | |||||||||||
Unconsolidated Joint Venture Centers |
||||||||||||
Minimum rents |
8.4 | % | 8.6 | % | 8.6 | % | ||||||
Percentage rents |
0.3 | % | 0.3 | % | 0.3 | % | ||||||
Expense recoveries(b) |
3.7 | % | 3.8 | % | 3.9 | % | ||||||
|
|
|
|
|
|
|||||||
Total |
12.4 | % | 12.7 | % | 12.8 | % | ||||||
|
|
|
|
|
|
|||||||
For the trailing twelve months ended March 31, 2018 |
For Years Ended December 31, | |||||||||||
2017 | 2016(a) | |||||||||||
All Centers |
||||||||||||
Minimum rents |
8.9 | % | 9.0 | % | 9.0 | % | ||||||
Percentage rents |
0.3 | % | 0.3 | % | 0.3 | % | ||||||
Expense recoveries(b) |
3.9 | % | 4.0 | % | 4.1 | % | ||||||
|
|
|
|
|
|
|||||||
Total |
13.1 | % | 13.3 | % | 13.4 | % | ||||||
|
|
|
|
|
|
(a) | Cascade Mall and Northgate Mall were under contract to be sold in December 2016 and sold in January 2017. These two Centers are excluded from cost of occupancy as of December 31, 2016. |
(b) | Represents real estate tax and common area maintenance charges. |
19
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Percentage of Net Operating Income by State
State |
% of Portfolio 2018 Forecast Real Estate Pro Rata NOI(a) |
|||
California |
27.1 | % | ||
New York |
22.4 | % | ||
Arizona |
16.0 | % | ||
Colorado, Illinois & Missouri |
9.5 | % | ||
Pennsylvania & Virginia |
8.8 | % | ||
New Jersey & Connecticut |
7.5 | % | ||
Oregon |
4.3 | % | ||
Other(b) |
4.4 | % | ||
|
|
|||
Total |
100.0 | % | ||
|
|
(a) | The percentage of Portfolio 2018 Forecast Pro Rata Real Estate NOI is based on guidance reaffirmed on May 2, 2018, see page 9. Real Estate NOI excludes straight-line and above/below market adjustments to minimum rents. Real Estate NOI also does not reflect REIT expenses and Management Company revenues and expenses. See the Companys forward-looking statements disclosure on pages 1 and 2 for factors that may affect the information provided in this column. |
(b) | Other includes Indiana, Iowa, Kentucky, North Dakota and Texas. |
20
The Macerich Company
Property Listing
March 31, 2018
The following table sets forth certain information regarding the Centers and other locations that are wholly owned or partly owned by the Company.
Count |
Companys Ownership(a) |
Name of |
Year of Original Construction/ Acquisition |
Year of Most Recent Expansion/ Renovation |
Total GLA(b) |
|||||||||||
CONSOLIDATED CENTERS: | ||||||||||||||||
1 | 50.1% | Chandler Fashion Center |
2001/2002 | | 1,318,000 | |||||||||||
2 | 100% | Danbury Fair Mall |
1986/2005 | 2016 | 1,269,000 | |||||||||||
3 | 100% | Desert Sky Mall |
1981/2002 | 2007 | 894,000 | |||||||||||
4 | 100% | Eastland Mall(c) |
1978/1998 | 1996 | 1,026,000 | |||||||||||
5 | 100% | Fashion Outlets of Chicago |
2013/ | | 538,000 | |||||||||||
6 | 100% | Fashion Outlets of Niagara Falls USA |
1982/2011 | 2014 | 688,000 | |||||||||||
7 | 50.1% | Freehold Raceway Mall |
1990/2005 | 2007 | 1,671,000 | |||||||||||
8 | 100% | Fresno Fashion Fair |
1970/1996 | 2006 | 964,000 | |||||||||||
9 | 100% | Green Acres Mall(c) |
1956/2013 | 2016 | 2,069,000 | |||||||||||
10 | 100% | Inland Center |
1966/2004 | 2016 | 870,000 | |||||||||||
11 | 100% | Kings Plaza Shopping Center(c) |
1971/2012 | 2002 | 1,138,000 | |||||||||||
12 | 100% | La Cumbre Plaza(c) |
1967/2004 | 1989 | 492,000 | |||||||||||
13 | 100% | NorthPark Mall |
1973/1998 | 2001 | 1,050,000 | |||||||||||
14 | 100% | Oaks, The |
1978/2002 | 2009 | 1,193,000 | |||||||||||
15 | 100% | Pacific View |
1965/1996 | 2001 | 1,061,000 | |||||||||||
16 | 100% | Queens Center(c) |
1973/1995 | 2004 | 963,000 | |||||||||||
17 | 100% | Santa Monica Place |
1980/1999 | 2015 | 525,000 | |||||||||||
18 | 84.9% | SanTan Village Regional Center |
2007/ | 2009 | 1,111,000 | |||||||||||
19 | 100% | SouthPark Mall |
1974/1998 | 2015 | 863,000 | |||||||||||
20 | 100% | Stonewood Center(c) |
1953/1997 | 1991 | 933,000 | |||||||||||
21 | 100% | Superstition Springs Center |
1990/2002 | 2002 | 1,041,000 | |||||||||||
22 | 100% | Towne Mall |
1985/2005 | 1989 | 350,000 |
21
The Macerich Company
Property Listing
March 31, 2018
Count |
Companys Ownership(a) |
Name of |
Year of Original Construction/ Acquisition |
Year of Most Recent Expansion/ Renovation |
Total GLA(b) |
|||||||||
23 |
100% | Tucson La Encantada |
2002/2002 | 2005 | 244,000 | |||||||||
24 |
100% | Valley Mall |
1978/1998 | 1992 | 505,000 | |||||||||
25 |
100% | Valley River Center |
1969/2006 | 2007 | 868,000 | |||||||||
26 |
100% | Victor Valley, Mall of |
1986/2004 | 2012 | 577,000 | |||||||||
27 |
100% | Vintage Faire Mall |
1977/1996 | 2008 | 1,138,000 | |||||||||
28 |
100% | Wilton Mall |
1990/2005 | 1998 | 734,000 | |||||||||
|
|
|||||||||||||
Total Consolidated Centers | 26,093,000 | |||||||||||||
|
|
|||||||||||||
UNCONSOLIDATED JOINT VENTURE CENTERS: | ||||||||||||||
29 |
60% | Arrowhead Towne Center |
1993/2002 | 2015 | 1,197,000 | |||||||||
30 |
50% | Biltmore Fashion Park |
1963/2003 | 2006 | 517,000 | |||||||||
31 |
50% | Broadway Plaza(c) |
1951/1985 | 2016 | 888,000 | |||||||||
32 |
50.1% | Corte Madera, The Village at |
1985/1998 | 2005 | 461,000 | |||||||||
33 |
50% | Country Club Plaza |
1922/2016 | 2015 | 1,001,000 | |||||||||
34 |
51% | Deptford Mall |
1975/2006 | 1990 | 1,040,000 | |||||||||
35 |
51% | FlatIron Crossing |
2000/2002 | 2009 | 1,433,000 | |||||||||
36 |
50% | Kierland Commons |
1999/2005 | 2003 | 435,000 | |||||||||
37 |
60% | Lakewood Center |
1953/1975 | 2008 | 2,070,000 | |||||||||
38 |
60% | Los Cerritos Center(c) |
1971/1999 | 2016 | 1,305,000 | |||||||||
39 |
50% | North Bridge, The Shops at(c) |
1998/2008 | | 674,000 | |||||||||
40 |
50% | Scottsdale Fashion Square |
1961/2002 | 2015 | 1,837,000 | |||||||||
41 |
60% | South Plains Mall |
1972/1998 | 2017 | 1,128,000 | |||||||||
42 |
51% | Twenty Ninth Street(c) |
1963/1979 | 2007 | 847,000 | |||||||||
43 |
50% | Tysons Corner Center |
1968/2005 | 2014 | 1,971,000 | |||||||||
44 |
60% | Washington Square |
1974/1999 | 2005 | 1,443,000 | |||||||||
45 |
19% | West Acres |
1972/1986 | 2001 | 962,000 | |||||||||
|
|
|||||||||||||
Total Unconsolidated Joint Venture Centers | 19,209,000 | |||||||||||||
|
|
22
The Macerich Company
Property Listing
March 31, 2018
Count |
Companys Ownership(a) |
Name of |
Year of Original Construction/ Acquisition |
Year of Most Recent Expansion/ Renovation |
Total GLA(b) |
|||||||||||
REGIONAL SHOPPING CENTERS UNDER REDEVELOPMENT: | ||||||||||||||||
46 |
50% | Fashion District Philadelphia(d) |
1977/2014 | ongoing | 850,000 | |||||||||||
47 |
100% | Paradise Valley Mall(e) |
1979/2002 | 2009 | 1,202,000 | |||||||||||
48 |
25% | Westside Pavilion(e) |
1985/1998 | 2007 | 755,000 | |||||||||||
|
|
|||||||||||||||
Total Regional Shopping Centers | 48,109,000 | |||||||||||||||
|
|
|||||||||||||||
COMMUNITY / POWER CENTERS: |
|
|||||||||||||||
1 |
50% | Atlas Park, The Shops at(d) |
2006/2011 | 2013 | 372,000 | |||||||||||
2 |
50% | Boulevard Shops(d) |
2001/2002 | 2004 | 185,000 | |||||||||||
3 |
various | Estrella Falls, The Market at(d) |
2009/ | 2016 | 377,000 | |||||||||||
4 |
89.4% | Promenade at Casa Grande(e) |
2007/ | 2009 | 761,000 | |||||||||||
5 |
100% | Southridge Center(e) |
1975/1998 | 2013 | 848,000 | |||||||||||
6 |
100% | Superstition Springs Power Center(e) |
1990/2002 | | 206,000 | |||||||||||
7 |
100% | The Marketplace at Flagstaff(c)(e) |
2007/ | | 268,000 | |||||||||||
|
|
|||||||||||||||
Total Community / Power Centers | 3,017,000 | |||||||||||||||
|
|
|||||||||||||||
OTHER ASSETS: |
||||||||||||||||
100% | Various(e)(f) |
447,000 | ||||||||||||||
50% | Scottsdale Fashion Square-Office(d) |
123,000 | ||||||||||||||
50% | Tysons Corner Center-Office(d) |
174,000 | ||||||||||||||
50% | Hyatt Regency Tysons Corner Center(d) |
290,000 | ||||||||||||||
50% | VITA Tysons Corner Center(d) |
510,000 | ||||||||||||||
50% | Tysons Tower(d) |
529,000 | ||||||||||||||
|
|
|||||||||||||||
Total Other Assets | 2,073,000 | |||||||||||||||
|
|
|||||||||||||||
Grand Total at March 31, 2018 | 53,199,000 | |||||||||||||||
|
|
(a) | The Companys ownership interest in this table reflects its legal ownership interest. See footnotes (a) and (b) on pages 25 and 26 regarding the legal versus economic ownership of joint venture entities. |
(b) | Includes GLA attributable to anchors (whether owned or non-owned) and mall and freestanding stores as of March 31, 2018. |
23
The Macerich Company
Property Listing
March 31, 2018
(c) | Portions of the land on which the Center is situated are subject to one or more long-term ground leases. With respect to 44 Centers, the underlying land controlled by the Company is owned in fee entirely by the Company, or, in the case of jointly-owned Centers, by the joint venture property partnership or limited liability company. |
(d) | Included in Unconsolidated Joint Venture Centers. |
(e) | Included in Consolidated Centers. |
(f) | The Company owns an office building and seven stores located at shopping centers not owned by the Company. Of the seven stores, one is leased to Forever 21, one is leased to Kohls, two are vacant, and three have been leased for non-Anchor uses. With respect to the office building and four of the seven stores, the underlying land is owned in fee entirely by the Company. With respect to the remaining three stores, the underlying land is owned by third parties and leased to the Company pursuant to long-term building or ground leases. |
24
The Macerich Company
Joint Venture List as of March 31, 2018
The following table sets forth certain information regarding the Centers and other operating properties that are not wholly owned by the Company. This list of properties includes unconsolidated joint ventures, consolidated joint ventures, and financing arrangements. The percentages shown are the effective legal ownership and economic ownership interests of the Company as of March 31, 2018.
Properties |
Legal Ownership(a) |
Economic Ownership(b) |
Joint Venture |
Total GLA(c) | ||||||||||
Arrowhead Towne Center(d) |
60 | % | 60 | % | New River Associates LLC | 1,197,000 | ||||||||
Atlas Park, The Shops at |
50 | % | 50 | % | WMAP, L.L.C. | 372,000 | ||||||||
Biltmore Fashion Park |
50 | % | 50 | % | Biltmore Shopping Center Partners LLC | 517,000 | ||||||||
Boulevard Shops |
50 | % | 50 | % | Propcor II Associates, LLC | 185,000 | ||||||||
Broadway Plaza |
50 | % | 50 | % | Macerich Northwestern Associates | 888,000 | ||||||||
Chandler Fashion Center(d)(e) |
50.1 | % | 50.1 | % | Freehold Chandler Holdings LP | 1,318,000 | ||||||||
Corte Madera, The Village at |
50.1 | % | 50.1 | % | Corte Madera Village, LLC | 461,000 | ||||||||
Country Club Plaza |
50 | % | 50 | % | Country Club Plaza KC Partners LLC | 1,001,000 | ||||||||
Deptford Mall(d) |
51 | % | 51 | % | Macerich HHF Centers LLC | 1,040,000 | ||||||||
Estrella Falls |
86.6 | % | 86.6 | % | Westcor Goodyear RSC LLC | 79,000 | ||||||||
Estrella Falls, The Market at(f) |
39.9 | % | 39.9 | % | The Market at Estrella Falls LLC | 298,000 | ||||||||
Fashion District Philadelphia |
50 | % | 50 | % | Various Entities | 850,000 | ||||||||
FlatIron Crossing |
51 | % | 51 | % | Macerich HHF Centers LLC | 1,433,000 | ||||||||
Freehold Raceway Mall(d)(e) |
50.1 | % | 50.1 | % | Freehold Chandler Holdings LP | 1,671,000 | ||||||||
Hyatt Regency Tysons Corner Center |
50 | % | 50 | % | Tysons Corner Hotel I LLC | 290,000 | ||||||||
Kierland Commons |
50 | % | 50 | % | Kierland Commons Investment LLC | 435,000 | ||||||||
Lakewood Center |
60 | % | 60 | % | Pacific Premier Retail LLC | 2,070,000 | ||||||||
Los Cerritos Center(d) |
60 | % | 60 | % | Pacific Premier Retail LLC | 1,305,000 | ||||||||
North Bridge, The Shops at |
50 | % | 50 | % | North Bridge Chicago LLC | 674,000 | ||||||||
Promenade at Casa Grande(g) |
89.4 | % | 89.4 | % | WP Casa Grande Retail LLC | 761,000 | ||||||||
SanTan Village Regional Center |
84.9 | % | 84.9 | % | Westcor SanTan Village LLC | 1,111,000 | ||||||||
Scottsdale Fashion Square |
50 | % | 50 | % | Scottsdale Fashion Square Partnership | 1,837,000 | ||||||||
Scottsdale Fashion Square-Office |
50 | % | 50 | % | Scottsdale Fashion Square Partnership | 123,000 | ||||||||
Macerich Seritage Portfolio(h) |
50 | % | 50 | % | MS Portfolio LLC | 1,550,000 | ||||||||
South Plains Mall(d) |
60 | % | 60 | % | Pacific Premier Retail LLC | 1,128,000 | ||||||||
Twenty Ninth Street |
51 | % | 51 | % | Macerich HHF Centers LLC | 847,000 | ||||||||
Tysons Corner Center |
50 | % | 50 | % | Tysons Corner LLC | 1,971,000 | ||||||||
Tysons Corner Center-Office |
50 | % | 50 | % | Tysons Corner Property LLC | 174,000 | ||||||||
Tysons Tower |
50 | % | 50 | % | Tysons Corner Property LLC | 529,000 | ||||||||
VITA Tysons Corner Center |
50 | % | 50 | % | Tysons Corner Property LLC | 510,000 | ||||||||
Washington Square(d) |
60 | % | 60 | % | Pacific Premier Retail LLC | 1,443,000 | ||||||||
West Acres |
19 | % | 19 | % | West Acres Development, LLP | 962,000 | ||||||||
Westside Pavilion(i) |
25 | % | 25 | % | HPP-MAC WSP, LLC | 755,000 |
(a) | This column reflects the Companys legal ownership in the listed properties as of March 31, 2018. Legal ownership may, at times, not equal the Companys economic interest in the listed properties because of various provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, the Companys actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests. Substantially all of the Companys joint venture agreements contain rights of first refusal, buy-sell provisions, exit rights, default dilution remedies and/or other break up provisions or remedies which are customary in real estate joint venture agreements and which may, positively or negatively, affect the ultimate realization of cash flow and/or capital or liquidation proceeds. |
25
The Macerich Company
Joint Venture List
(b) | Economic ownership represents the allocation of cash flow to the Company as of March 31, 2018, except as noted below. In cases where the Company receives a current cash distribution greater than its legal ownership percentage due to a capital account greater than its legal ownership percentage, only the legal ownership percentage is shown in this column. The Companys economic ownership of these properties may fluctuate based on a number of factors, including mortgage refinancings, partnership capital contributions and distributions, and proceeds and gains or losses from asset sales, and the matters set forth in the preceding paragraph. |
(c) | Includes GLA attributable to anchors (whether owned or non-owned) and mall and freestanding stores as of March 31, 2018. |
(d) | These centers have a Sears store which is owned by MS Portfolio LLC, see footnote (h) below. The GLA of the Sears store at the seven centers indicated with footnote (d) in the table above is included in Total GLA at the center level. The GLA for the Sears store at these seven centers plus the GLA of the Sears store at two wholly owned centers, Danbury Fair Mall and Vintage Faire Mall, are also aggregated into the 1,550,000 square feet in the MS Portfolio LLC above. |
(e) | The joint venture entity was formed in September 2009. Upon liquidation of the partnership, distributions are made in the following order: to the third-party partner until it receives a 13% internal rate of return on and of its aggregate unreturned capital contributions; to the Company until it receives a 13% internal rate of return on and of its aggregate unreturned capital contributions; and, thereafter, pro rata 35% to the third-party partner and 65% to the Company. |
(f) | Columns 1 and 2 reflect the Companys indirect ownership interest in the property owner. The Company and a third-party partner are each members of a joint venture (the MW Joint Venture) which, in turn, is a member in the joint venture that owns the property. Cash flow distributions for the MW Joint Venture are made in accordance with the members relative capital accounts until the members have received distributions equal to their capital accounts, and thereafter in accordance with the members relative legal ownership percentages. |
(g) | Columns 1 and 2 reflect the Companys total direct and indirect ownership interest in the property owner. The Company and a third-party partner are each members of a joint venture (the MW Joint Venture) which, in turn, is a member in the joint venture with the Company that owns the property. Cash flow distributions for the MW Joint Venture are made in accordance with the members relative capital accounts until the members have received distributions equal to their capital accounts, and thereafter in accordance with the members relative legal ownership percentages. |
(h) | On April 30, 2015 Sears Holdings Corporation (Sears) and the Company announced that they had formed a joint venture, MS Portfolio LLC. Sears contributed nine stores (located at Arrowhead Towne Center, Chandler Fashion Center, Danbury Fair Mall, Deptford Mall, Freehold Raceway Mall, Los Cerritos Center, South Plains Mall, Vintage Faire Mall and Washington Square) to the joint venture and the Company contributed $150 million in cash to the joint venture. The lease arrangements between Sears and the joint venture provide the ability to create additional value through recapturing certain space leased to Sears in these properties and re-leasing that space to third-party tenants. For example, Primark has leased space in portions of the Sears stores at Danbury Fair Mall and Freehold Raceway Mall. On July 7, 2015, Sears assigned its ownership interest in MS Portfolio LLC to Seritage MS Holdings LLC. |
(i) | The Company has entered into a commitment to contribute the property to the joint venture for $190.0 million within one year, which is the purchase price agreed to by the joint venture for the existing buildings and land. |
26
The Macerich Company
Supplemental Financial and Operating Information (unaudited)
Debt Summary (at Companys pro rata share)(a)
As of March 31, 2018 | ||||||||||||
Fixed Rate | Floating Rate | Total | ||||||||||
(Dollars in thousands) | ||||||||||||
Mortgage notes payable |
$ | 3,623,213 | $ | 623,034 | $ | 4,246,247 | ||||||
Bank and other notes payable |
4,528 | 653,066 | 657,594 | |||||||||
|
|
|
|
|
|
|||||||
Total debt per Consolidated Balance Sheet |
3,627,741 | 1,276,100 | 4,903,841 | |||||||||
Adjustments: |
||||||||||||
Less: Noncontrolling interests share of debt from consolidated joint ventures |
(424,590 | ) | | (424,590 | ) | |||||||
|
|
|
|
|
|
|||||||
Adjusted Consolidated Debt |
3,203,151 | 1,276,100 | 4,479,251 | |||||||||
Add: Companys share of debt from unconsolidated joint ventures |
2,953,999 | 229,247 | 3,183,246 | |||||||||
|
|
|
|
|
|
|||||||
Total Companys Pro Rata Share of Debt |
$ | 6,157,150 | $ | 1,505,347 | $ | 7,662,497 | ||||||
|
|
|
|
|
|
|||||||
Weighted average interest rate |
3.85% | 3.52% | 3.79% | |||||||||
Weighted average maturity (years) |
5.88 |
(a) | The Companys pro rata share of debt represents (i) consolidated debt, minus the Companys partners share of the amount from consolidated joint ventures (calculated based upon the partners percentage ownership interest); plus (ii) the Companys share of debt from unconsolidated joint ventures (calculated based upon the Companys percentage ownership interest). Management believes that this measure provides useful information to investors regarding the Companys financial condition because it includes the Companys share of debt from unconsolidated joint ventures and, for consolidated debt, excludes the Companys partners share from consolidated joint ventures, in each case presented on the same basis. The Company has several significant joint ventures and presenting its pro rata share of debt in this manner can help investors better understand the Companys financial condition after taking into account the Companys economic interest in these joint ventures. The Companys pro rata share of debt should not be considered as a substitute to the Companys total debt determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Companys financial information prepared in accordance with GAAP. |
27
The Macerich Company
Supplemental Financial and Operating Information (Unaudited)
Outstanding Debt by Maturity Date
As of March 31, 2018 | ||||||||||||||||||||
Center/Entity (dollars in thousands) |
Maturity Date | Effective Interest Rate (a) |
Fixed | Floating | Total Debt Balance (a) |
|||||||||||||||
I. Consolidated Assets: |
||||||||||||||||||||
SanTan Village Regional Center (b) |
06/01/19 | 3.14 | % | $ | 105,195 | $ | | $ | 105,195 | |||||||||||
Chandler Fashion Center (c) |
07/01/19 | 3.77 | % | 100,160 | | 100,160 | ||||||||||||||
Kings Plaza Shopping Center |
12/03/19 | 3.67 | % | 444,688 | | 444,688 | ||||||||||||||
Danbury Fair Mall |
10/01/20 | 5.53 | % | 207,473 | | 207,473 | ||||||||||||||
Fashion Outlets of Niagara Falls USA |
10/06/20 | 4.89 | % | 111,981 | | 111,981 | ||||||||||||||
Green Acres Mall |
02/03/21 | 3.61 | % | 289,684 | | 289,684 | ||||||||||||||
Prasada (d) |
05/30/21 | 5.25 | % | 2,264 | | 2,264 | ||||||||||||||
Tucson La Encantada |
03/01/22 | 4.23 | % | 66,574 | | 66,574 | ||||||||||||||
Pacific View |
04/01/22 | 4.08 | % | 123,650 | | 123,650 | ||||||||||||||
Oaks, The |
06/05/22 | 4.14 | % | 195,576 | | 195,576 | ||||||||||||||
Westside Pavilion (e) |
10/01/22 | 4.49 | % | 35,066 | | 35,066 | ||||||||||||||
Towne Mall |
11/01/22 | 4.48 | % | 21,053 | | 21,053 | ||||||||||||||
Victor Valley, Mall of |
09/01/24 | 4.00 | % | 114,631 | | 114,631 | ||||||||||||||
Queens Center |
01/01/25 | 3.49 | % | 600,000 | | 600,000 | ||||||||||||||
Vintage Faire |
03/06/26 | 3.55 | % | 262,403 | | 262,403 | ||||||||||||||
Fresno Fashion Fair |
11/01/26 | 3.67 | % | 323,311 | | 323,311 | ||||||||||||||
Freehold Raceway Mall (c) |
11/01/29 | 3.94 | % | 199,442 | | 199,442 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Fixed Rate Debt for Consolidated Assets |
3.87 | % | $ | 3,203,151 | $ | | $ | 3,203,151 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Fashion Outlets of Chicago |
03/31/20 | 3.32 | % | $ | | $ | 199,379 | $ | 199,379 | |||||||||||
Green Acres Commons (f) |
03/29/21 | 4.38 | % | | 127,105 | 127,105 | ||||||||||||||
The Macerich Partnership, L.P. - Line of Credit (f) |
07/06/21 | 3.47 | % | | 653,066 | 653,066 | ||||||||||||||
Santa Monica Place (f) |
12/09/22 | 3.38 | % | | 296,550 | 296,550 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Floating Rate Debt for Consolidated Assets |
3.52 | % | $ | | $ | 1,276,100 | $ | 1,276,100 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Debt for Consolidated Assets |
3.77 | % | $ | 3,203,151 | $ | 1,276,100 | $ | 4,479,251 | ||||||||||||
|
|
|
|
|
|
|
|
28
The Macerich Company
Supplemental Financial and Operating Information (Unaudited)
Outstanding Debt by Maturity Date
As of March 31, 2018 | ||||||||||||||||||||
Center/Entity (dollars in thousands) |
Maturity Date | Effective Interest Rate (a) |
Fixed | Floating | Total Debt Balance (a) |
|||||||||||||||
II. Unconsolidated Assets (At Companys pro rata share): |
|
|||||||||||||||||||
FlatIron Crossing (51%) |
01/05/21 | 2.81 | % | $ | 125,112 | $ | | $ | 125,112 | |||||||||||
Washington Square Mall (60%) |
11/01/22 | 3.65 | % | 330,000 | | 330,000 | ||||||||||||||
Deptford Mall (51%) |
04/03/23 | 3.55 | % | 94,824 | | 94,824 | ||||||||||||||
Scottsdale Fashion Square (50%) |
04/03/23 | 3.02 | % | 234,113 | | 234,113 | ||||||||||||||
Tysons Corner Center (50%) |
01/01/24 | 4.13 | % | 388,448 | | 388,448 | ||||||||||||||
South Plains Mall (60%) |
11/06/25 | 4.22 | % | 120,000 | | 120,000 | ||||||||||||||
Twenty Ninth Street (51%) |
02/06/26 | 4.10 | % | 76,500 | | 76,500 | ||||||||||||||
Country Club Plaza (50%) |
04/01/26 | 3.88 | % | 159,620 | | 159,620 | ||||||||||||||
Lakewood Center (60%) |
06/01/26 | 4.15 | % | 221,239 | | 221,239 | ||||||||||||||
Kierland Commons (50%) |
04/01/27 | 3.98 | % | 110,479 | | 110,479 | ||||||||||||||
Los Cerritos Center (60%) |
11/01/27 | 4.00 | % | 315,000 | | 315,000 | ||||||||||||||
Arrowhead Towne Center (60%) |
02/01/28 | 4.05 | % | 240,000 | | 240,000 | ||||||||||||||
North Bridge, The Shops at (50%) |
06/01/28 | 3.71 | % | 186,949 | | 186,949 | ||||||||||||||
Corte Madera, The Village at (50.1%) |
09/01/28 | 3.53 | % | 112,368 | | 112,368 | ||||||||||||||
Broadway Plaza (50%) |
04/01/30 | 4.19 | % | 224,479 | | 224,479 | ||||||||||||||
West Acres (19%) |
03/01/32 | 4.61 | % | 14,868 | | 14,868 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Fixed Rate Debt for Unconsolidated Assets |
3.84 | % | $ | 2,953,999 | $ | | $ | 2,953,999 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Boulevard Shops (50%) |
12/16/18 | 3.53 | % | $ | | $ | 9,296 | $ | 9,296 | |||||||||||
Estrella Falls, The Market at (39.9%) (f) |
02/05/20 | 3.71 | % | | 9,856 | 9,856 | ||||||||||||||
Atlas Park (50%) (f) |
10/28/20 | 3.74 | % | | 26,336 | 26,336 | ||||||||||||||
Pacific Premier Retail LLC (60%) |
10/31/22 | 2.86 | % | | 60,000 | 60,000 | ||||||||||||||
Fashion District Philadelphia (50%) |
01/22/23 | 3.86 | % | | 123,759 | 123,759 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Floating Rate Debt for Unconsolidated Assets |
3.56 | % | $ | | $ | 229,247 | $ | 229,247 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Debt for Unconsolidated Assets |
3.82 | % | $ | 2,953,999 | $ | 229,247 | $ | 3,183,246 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Debt |
3.79 | % | $ | 6,157,150 | $ | 1,505,347 | $ | 7,662,497 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Percentage to Total |
80.35 | % | 19.65 | % | 100.00 | % |
(a) | The debt balances include the unamortized debt premiums/discounts and loan finance costs. Debt premiums/discounts represent the excess of the fair value of debt over the principal value of debt assumed in various acquisitions. Debt premiums/discounts and loan finance costs are amortized into interest expense over the remaining term of the related debt in a manner that approximates the effective interest method. The annual interest rate in the table represents the effective interest rate, including the debt premiums/discounts and loan finance costs. |
(b) | This property is owned by a consolidated joint venture. The above debt balance represents the Companys pro rata share of 84.9%. |
(c) | This property is owned by a consolidated joint venture. The above debt balance represents the Companys pro rata share of 50.1%. |
(d) | This property is owned by a consolidated joint venture. The above debt balance represents the Companys pro rata share of 50.0%. |
(e) | This property is owned by a consolidated joint venture. The above debt balance represents the Companys pro rata share of 25.0%. |
(f) | The maturity date assumes that all available extension options are fully exercised and that the Company and/or its affiliates do not opt to refinance the debt prior to these dates. |
29
The Macerich Company
Supplemental Financial and Operating Information (Unaudited)
Development Pipeline Forecast
(Dollars in millions)
as of March 31, 2018
In-Process Developments and Redevelopments:
Property |
Project Type |
Total Cost(a)(b) |
Ownership |
Total Cost(a)(b) |
Pro Rata Capitalized Costs(b) 3/31/2018 |
Expected |
Stabilized Yield(a)(b)(c) |
|||||||||
Fashion District Philadelphia |
Redevelopment of The Gallery in downtown Philadelphia | $305 - $365(d) | 50% | $153 - $183(d) | $135 | 2018 | 8%(d) | |||||||||
Kings Plaza Shopping Center |
250,000 sf redevelopment of former Sears store, to be anchored by Burlington, Primark, JCPenney and Zara | $95 - $100 | 100% | $95 - $100 | $81 | Q2 2018 | 4%(e) | |||||||||
|
|
|
||||||||||||||
Total In-Process |
$400 - $465 | $248 - $283 | $216 | |||||||||||||
|
|
|
||||||||||||||
Shadow Pipeline of Developments and Redevelopments(f): | ||||||||||||||||
Property |
Project Type |
Total Cost(a)(b) at 100% |
Ownership |
Total Cost(a)(b) Pro Rata |
Pro Rata Capitalized Costs(b) 3/31/2018 |
Expected |
Stabilized Yield(a)(b)(c) |
|||||||||
Westside Pavilion |
Redevelopment of an existing retail center into approximately 500,000 sf of creative office with approximately 100,000 sf of existing retail and entertainment space | $425 - $475(g) |
25% | $106 - $119(g) | $1 | 2021 |
6.5% - 7%(g) |
(a) | Much of this information is estimated and may change from time to time. See the Companys forward-looking disclosure on pages 1 and 2 for factors that may affect the information provided in this table. |
(b) | This excludes GAAP allocations of non cash and indirect costs. |
(c) | Stabilized Yield is calculated based on stabilized income after development divided by project direct costs excluding GAAP allocations of non cash and indirect costs. |
(d) | This reflects incremental project costs and income subsequent to the Companys $106.8 million investment in July 2014. Total Costs are net of $25 million of approved public financing grants that will be a reduction of costs. |
(e) | The Sears lease has been terminated. The 4% yield represents an incremental return over Sears former annual rent. The yield would increase to 8% without including any offsetting rent impact from Sears. |
(f) | This section includes potential developments or redevelopments that the Company is considering. The scope of these projects may change. There is no certainty that the Company will develop or redevelop any or all of these potential projects. |
(g) | Includes the purchase price agreed to by the joint venture for the existing buildings and land totaling $190 million. |
30
The Macerich Company
Corporate Information
Stock Exchange Listing
New York Stock Exchange
Symbol: MAC
The following table shows high and low sales prices per share of common stock during each quarter in 2018, 2017 and 2016 and dividends per share of common stock declared and paid by quarter:
Market Quotation per Share |
Dividends | |||||||||||
Quarter Ended: |
High | Low | Declared and Paid |
|||||||||
March 31, 2016 |
$ | 82.88 | $ | 72.99 | $ | 2.68 | (a) | |||||
June 30, 2016 |
$ | 85.39 | $ | 71.82 | $ | 0.68 | ||||||
September 30, 2016 |
$ | 94.51 | $ | 78.76 | $ | 0.68 | ||||||
December 31, 2016 |
$ | 80.54 | $ | 66.00 | $ | 0.71 | ||||||
March 31, 2017 |
$ | 73.34 | $ | 62.14 | $ | 0.71 | ||||||
June 30, 2017 |
$ | 67.18 | $ | 56.06 | $ | 0.71 | ||||||
September 30, 2017 |
$ | 61.55 | $ | 52.12 | $ | 0.71 | ||||||
December 31, 2017 |
$ | 67.53 | $ | 52.45 | $ | 0.74 | ||||||
March 31, 2018 |
$ | 69.73 | $ | 54.35 | $ | 0.74 |
(a) | Includes a special dividend of $2.00 per common share paid on January 6, 2016. |
Dividend Reinvestment Plan
Stockholders may automatically reinvest their dividends in additional common stock of the Company through the Direct Investment Program, which also provides for purchase by voluntary cash contributions. For additional information, please contact Computershare Trust Company, N.A. at 800-567-0169.
Corporate Headquarters The Macerich Company 401 Wilshire Boulevard, Suite 700 Santa Monica, California 90401 310-394-6000 www.macerich.com |
Transfer Agent Computershare P.O. Box 30170 College Station, TX 77842-3170 800-567-0169 www.computershare.com |
Macerich Website
For an electronic version of our annual report, our SEC filings and documents relating to Corporate Governance, please visit macerich.com.
Investor Relations
Jean Wood Vice President, Investor Relations Phone: 424-229-3366 jean.wood@macerich.com |
31