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Shares of The Macerich Company MAC lost 8.95% in the Feb. 27 regular trading session on the NYSE after it reported fourth-quarter 2024 funds from operations (FFO) per share of 47 cents, excluding financing expenses in relation to Chandler Freehold, gain on extinguishment of debt, accrued default interest expense and loss on non-real estate investments, despite meeting the Zacks Consensus Estimate. However, the figure declined 17.5% from the year-ago quarter’s reported numbers.
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The results reflect a year-over-year higher occupancy and base rent re-leasing spreads. However, a decrease in same-center net operating income (NOI), excluding lease termination income and higher expenses, marred the performance to some extent.
Quarterly revenues of $273.7 million were higher than the year-ago quarter’s $238.7 million. Moreover, the figure surpassed the Zacks Consensus Estimate of $235.4 million.
In 2024, Macerich reported an FFO per share of $1.58, excluding financing expenses in relation to Chandler Freehold, gain on extinguishment of debt, accrued default interest expense and loss on non-real estate investments, which outpaced the Zacks Consensus Estimate of $1.55. However, the figure compared unfavorably with the year-ago number of $1.84. Revenues of $918.2 million jumped 3.9% year over year and outpaced the consensus mark of $880 million.
MAC’s Q4 in Detail
The portfolio tenant sales per square foot for spaces less than 10,000 square feet for the year ended Dec. 31, 2024, were $837 compared with $836 for the year ended Dec. 31, 2023.
In the fourth quarter, Macerich signed leases encompassing 1.1 million square feet. On a comparable center basis, this reflected a 15.3% increase in the amount of leased square footage signed year over year.
As of Dec. 31, 2024, portfolio occupancy was 94.1%, up from 93.5% as of Dec. 31, 2023. Our expectation for the same was pegged at 94%.
For the year ended Dec. 31, 2024, base rent re-leasing spreads were 8.8% more than the expiring base rent.
However, same-center NOI, excluding lease termination income, decreased 0.4% year over year to $215.5 million.
Moreover, year over year, shopping center and operating expenses increased by 21.6% to $87.1 million, management companies’ operating expenses grew 42.3% to $24.6 million and leasing expenses were up by 19.1% at $11.4 million.
Also, interest expenses grew significantly year over year to $70.9 million.
MAC’s Portfolio Activity
In the fourth quarter, MAC completed acquiring its partner’s 40% interest in the Pacific Premier Retail Trust portfolio for $122 million. The company became the sole owner of Los Cerritos Center, Washington Square and Lakewood Center.