Macerich (NYSE:MAC) reported second-quarter funds from operations, as adjusted, of $0.35 per diluted share and said its go-forward portfolio net operating income increased 3.8% from a year earlier, as the mall operator continued to execute its “Path Forward” plan centered on leasing, portfolio simplification and debt reduction.
President and Chief Executive Officer Jack Hsieh said the company is ahead of schedule on its strategic leasing program and is shifting more attention toward converting signed leases into operating stores. Macerich’s signed-not-open, or SNO, pipeline reached $124 million during the quarter, and the company said it has confidence in a total SNO opportunity of about $140 million.
Leasing, Occupancy and Tenant Openings
Portfolio sales reached $919 per square foot at the end of the second quarter, a company high, while sales across the go-forward portfolio were $954 per square foot. Portfolio leased occupancy was 94%, up 60 basis points from the first quarter. Leased occupancy in the go-forward portfolio was 95.5%, also up 60 basis points sequentially and 270 basis points from a year earlier.
Doug Healey, senior executive vice president of leasing, said Macerich has commitments for about 93% of its 2026 expiring square footage to renew and remain open, with another 6% in the letter-of-intent stage. For 2027 expirations, the company is about 50% committed, with another 40% in letters of intent, he said.
The company opened nearly 350,000 square feet of new stores during the quarter, including a new and expanded 45,000-square-foot Zara store at Tysons Corner Center. Healey said the Zara location ranked first in U.S. sales and fifth globally during its opening weekend, and has remained first in its region and among the top 10 nationally.
Macerich signed 1.3 million square feet of new and renewal leases during the second quarter, including 645,000 square feet of new deals. Brands signing leases included Aerie, Old Navy, Eataly, Din Tai Fung, Zara, Sephora, Level99, Golf Galaxy, Alo Yoga, On Running, Vuori, Reformation and Cider, according to Healey.
The company’s five-year leasing plan calls for 1,000 new deals. Healey said 170 leases remain to achieve that target, with roughly two-thirds of the remaining leases in the letter-of-intent stage. Macerich’s leasing “speedometer,” which tracks new-deal completion under the plan, stood at 88%, above its 85% midyear target.
NOI Outlook and Transformation Efforts
Chief Financial Officer Dan Swanstrom said go-forward portfolio NOI, excluding lease termination income, rose 2.5% for the first six months of 2026. The company reaffirmed its expectation for full-year go-forward NOI growth of at least 3%.
Based on the first-half results, Swanstrom said the guidance implies at least 3.5% NOI growth in the second half, potentially with a stronger fourth quarter as SNO contributions increase. Macerich expects SNO tenants to contribute about $30 million in 2026, with the contribution weighted toward the latter part of the year; $40 million to $45 million in 2027; and $45 million to $50 million in 2028.
The company’s Path Forward 3.0 plan targets a three-year NOI compound annual growth rate midpoint of 6.5% from 2026 through 2028. Swanstrom said that, assuming 3% growth in 2026, the plan implies NOI growth of more than 8% in both 2027 and 2028.
Hsieh said centers in later stages of Macerich’s transformation strategy have recorded stronger traffic, sales and NOI trends than the broader go-forward portfolio. He cited Fairfield Commons, Broadway Plaza, Scottsdale Fashion Square and Tysons Corner as examples, saying the four properties posted low-teens traffic gains and high-single-digit NOI growth year to date.
At Tysons Corner, Macerich is adding Eataly, Din Tai Fung and Cider to the historically weaker west wing. Hsieh said traffic at Tysons was up 10% through the first six months of the year as the company continued upgrading the tenant mix.
Acquisitions and Balance Sheet
Macerich said it sees acquisitions as an increasingly important growth avenue and is evaluating a broad set of on- and off-market opportunities. Hsieh said the company’s pipeline is the largest it has had since beginning the Path Forward plan, with roughly half of the opportunities on market and half directly involving sellers.
The company said it remains focused on assets in strong trade areas where it can use its leasing and operating platform to create value, while financing transactions within its leverage targets. Hsieh said the company is underwriting potential acquisitions at stabilized yields in the 9% to 11% range.
Macerich highlighted progress at Annapolis Mall and Crabtree, two recent acquisitions. At Annapolis, Uniqlo has opened and Dick’s House of Sport is scheduled to open Aug. 14. At Crabtree, Macerich said it has commitments for 45 new and expansion leases and 35 renewal leases since the acquisition. Dick’s House of Sport is expected to open there in September.
In June, Macerich priced a common-stock offering at $23.90 per share through forward sale agreements. The company said it expects future net proceeds of about $372 million to fund acquisitions. Hsieh said the company expects to deploy the capital before the forward settlement deadline in June 2027.
Net debt to adjusted EBITDA stood at 7.3 times at the end of the second quarter, down nearly half a turn from the prior quarter and more than 1.5 turns from the start of the Path Forward plan. Swanstrom said the ratio falls below seven times when including unsettled forward equity proceeds. Macerich’s stated leverage target is in the range of six times, plus or minus.
The company has completed about $1.3 billion of dispositions, representing roughly two-thirds of its original target. It expects to sell or give back another $300 million to $400 million of assets, outparcels and land by year-end, which would bring total dispositions to approximately $1.7 billion. Macerich reported about $1.2 billion in liquidity, including $900 million of revolving-credit capacity, excluding the value of unsettled forward equity proceeds.
About Macerich (NYSE:MAC)
The Macerich Company (NYSE: MAC) is a real estate investment trust (REIT) that specializes in the acquisition, development, ownership and management of regional shopping centers in the United States. Headquartered in Santa Monica, California, the company focuses on high-quality retail properties, including enclosed malls, open-air centers and mixed-use lifestyle destinations. Since its establishment as a REIT in 1994, Macerich has pursued a disciplined strategy of investing in properties that serve strong consumer demographics and offer long-term growth potential.
Macerich’s core activities encompass property and asset management, leasing, marketing and redevelopment services.
