[MAC] Macerich Thesis 2026: A Class-A Mall REIT Sheds Non-Core Assets and Bets on Premium Trophy Centers

Key Takeaways

• The Macerich Company (NYSE: MAC) is expected to close FY2025 with selected various aggregate revenue of roughly $750-840M and aggregate FFO per share in the area of $1.55-1.95 (adjusted REIT FFO, the relevant cash-flow metric — GAAP loss-making on heavy depreciation/asset-impairment charges), with NOI selected various aggregate ~$520-580M, under President & CEO Jackson Hsieh (~1-2 year tenure since the early-2024 appointment, a longtime real-estate executive — formerly Spirit Realty CEO and JLL/Cushman & Wakefield retail-leasing leader — brought in to execute a meaningful balance-sheet and portfolio turnaround).
• The first deep-dive — the Class-A regional mall portfolio plus the "Path Forward" portfolio-rationalization plan — covers a ~40-mall portfolio of premium-trophy regional centers concentrated in California, Arizona, the New York Metro, and the Mid-Atlantic (selected various aggregate including Scottsdale Fashion Square, Tysons Corner Center, Queens Center, Washington Square, Biltmore Fashion Park, Santa Monica Place, FlatIron Crossing) plus the strategic plan to divest ~$2B+ of non-core assets and focus capital on Class A centers; FY2026 catalyst is occupancy/leasing momentum at Class A centers, asset-sale progress, and same-center NOI growth.
• The second deep-dive — the dividend-reduced, leverage-stressed balance sheet plus the operational turnaround — covers the 2023 dividend cut (from ~$0.85 to ~$0.17 quarterly, a ~80% reduction), the ~$6-7B+ net debt load with refinancing risk in a higher-rate environment, the multi-year deleveraging path, and the operational improvements under Hsieh (re-tenanting, anchor repositioning, mixed-use redevelopment); FY2026 catalyst is debt-paydown progress, the dividend trajectory, and any further strategic outcomes.
• Capital position is deeply leveraged with a reduced but stable dividend: a dividend of selected various aggregate ~$0.68 per share annually ($0.17 quarterly, a ~4-5% yield — post-2023 cut), no buybacks, selected various aggregate net debt in the area of $6.0-7.0B (a mix of property-level non-recourse mortgages and corporate-level senior unsecured notes/revolver), roughly ~9-12x net debt/EBITDA (very elevated), sub-investment-grade credit profile (Ba2/BB-area or lower), and ~220-260M shares outstanding (with selected various aggregate dilutive equity issuance possible to assist deleveraging).
• FY2026 catalysts: same-center NOI growth (leasing momentum, occupancy gains, rent growth), asset-sale execution (the headline $2B+ Path Forward target — selected various aggregate hundreds of millions of proceeds per year), refinancings on property-level mortgages, debt paydown, any mixed-use redevelopment milestones, dividend stability/eventual modest growth, NAV-discount compression, and the unresolved tension between Class-A-mall fundamentals (recovering) and the leverage overhang.

Company Background

The Macerich Company, headquartered in Santa Monica, California, is a REIT that owns and operates a portfolio of Class A regional shopping malls, principally in California, Arizona, the New York/New Jersey Metro, and the Mid-Atlantic — historically the highest-quality mall portfolio in the public-REIT universe, with sales-per-square-foot productivity at the high end of the regional-mall industry. The company was founded in 1964 by Mace Siegel (who built and operated regional malls and from whom the company name derives) and IPO'd as a REIT in the 1990s; Tom O'Hern was the long-tenured CEO until Jackson Hsieh (a former Spirit Realty CEO and longtime real-estate-services executive) succeeded him in early 2024 to execute a turnaround program. The portfolio is heavily concentrated in trophy centers: Scottsdale Fashion Square (Phoenix's premier mall — Nordstrom, Neiman Marcus, Apple, Tesla, Tiffany), Tysons Corner Center (the dominant Northern Virginia/D.C. mall — Bloomingdale's, Macy's, Lord & Taylor legacy, plus tier-1 luxury), Queens Center (one of the highest-sales-productivity malls in the country in NYC's Queens borough), Washington Square (Portland, Oregon — JV with PSP Investments), Biltmore Fashion Park (Phoenix luxury), Santa Monica Place (the Santa Monica beach trophy), FlatIron Crossing (Denver suburb), Los Cerritos Center (LA), Vintage Faire (Modesto, CA) and others. Many properties are owned through joint ventures with sovereign-wealth or pension partners (PSP Investments, Heitman, GIC), which provides capital but means MAC's economic share of these assets is 50-67%. The strategic backdrop: Macerich has been operating with elevated leverage since the 2015-era acquisition push ($6-7B+ net debt) and was hit hard by the 2020 COVID-19 mall stress (department-store anchor exits, tenant bankruptcies, lease restructurings); the company cut its dividend ~80% in 2023 to preserve cash, and in early 2024 brought in Jackson Hsieh to execute a "Path Forward" plan — a multi-year program of (a) selling ~$2B+ of non-core assets, (b) using proceeds to pay down debt, (c) focusing capital on the highest-quality Class A centers, and (d) redeveloping select mall properties into mixed-use (residential, office, hospitality) projects. The capital structure is sub-investment-grade with material refinancing risk in the higher-rate environment. Risks: the structural retail-real-estate / mall-format challenges (e-commerce, department-store anchor decline, fast-fashion shift), the leverage and refinancing wall, asset-sale execution (pricing in a soft mall-investment-sales market), tenant bankruptcies (department stores especially), interest-rate sensitivity, JV-partner dynamics, mixed-use redevelopment execution, and the broader consumer-spending cycle.

The Class-A Mall Portfolio and the "Path Forward" Strategic Plan

The core asset is the Class-A regional-mall portfolio — and the Path Forward plan to focus it down. Macerich owns selected various aggregate ~40+ regional malls/centers totaling ~46M+ square feet of GLA across its trophy properties (with sales-per-square-foot productivity selected various aggregate ~$800-1000+/sf — at the high end of the regional mall industry and well above lower-tier malls). The trophy centers are the focus: Scottsdale Fashion Square, Tysons Corner Center, Queens Center, Washington Square, Biltmore Fashion Park, Santa Monica Place, FlatIron Crossing and a select handful of others are the irreplaceable assets generating the bulk of NOI; the longer tail of secondary and tertiary malls have been candidates for the divestiture program. Tenancy spans department stores (Nordstrom, Macy's, Dillard's, Bloomingdale's, Neiman Marcus, plus the redeveloped JCPenney and Sears anchor boxes), specialty retailers (Apple, Tesla, Aritzia, Lululemon, Sephora, Ulta, Athleta), luxury (Tiffany, Cartier, Louis Vuitton, Gucci where appropriate), restaurants/entertainment (Cheesecake Factory, P.F. Chang's, fine dining, fitness clubs), and increasingly mixed-use components (apartments and offices added to select properties to densify and diversify). The Path Forward plan (announced 2024, multi-year): divest ~$2B+ of non-core assets — including secondary/tertiary regional malls, single-tenant properties, joint-venture interests where MAC is the JV minority, and select non-core sites — with the proceeds used principally to pay down debt and selectively reinvest in the top properties; the plan acknowledges that Macerich's portfolio has too many properties spread too thin and that concentration in the highest-productivity centers is the path to higher per-share metrics and balance-sheet health. FY2025 dynamics: Class A center leasing strong (post-COVID retail-recovery, occupancy back toward ~93-95%, releasing spreads positive), asset-sale program in execution (selected various aggregate hundreds of millions of dispositions completed/under contract), debt paydown beginning, mixed-use redevelopment projects in various stages, NOI growing modestly. FY2026 catalyst: same-center NOI growth (leasing + occupancy + rent growth), continued asset-sale execution (the leading indicator for deleveraging progress), refinancing-economics on upcoming property-level mortgage maturities, mixed-use redevelopment milestones, and any major tenant moves. Risks/competitors: department-store anchor bankruptcies (Macy's restructuring, Nordstrom's selective closures, Dillard's stable), specialty-tenant bankruptcies (the typical retail-restructuring cycle), e-commerce/digital-channel shift continuing to pressure traffic, asset-sale pricing in a soft mall-investment market (REITs and private capital both cautious on B/C-mall valuations), mixed-use redevelopment execution risk; the competitor set is the other regional-mall REITs and private mall owners — Simon Property Group (SPG, the dominant mall REIT — larger, lower-leveraged, premium-multiple), CBL Properties (CBL), Tanger (SKT, outlet centers), Brookfield Property Partners (private, owns Brookfield Properties' regional malls), Pacific Premier Properties / Unibail-Rodamco-Westfield (URW), plus private mall owners (Brookfield, Pyramid, Starwood-Sears legacy).

The Dividend-Reduced, Leverage-Stressed Balance Sheet and the Operational Turnaround

The second deep-dive is the leverage and turnaround story that frames the equity. The dividend cut (2023): Macerich reduced its quarterly dividend from ~$0.85 (the long-standing pre-cut rate) to ~$0.17 (a ~80% reduction), preserving selected various aggregate ~$100M+/year of cash for debt paydown and capex — a classic "preserve liquidity through the cycle" move; the current dividend is selected various aggregate $0.68/share annually ($0.17/quarter), yielding selected various aggregate ~4-5% on the stock — a sustainable level supported by cash flow even at depressed FFO. The leverage: net debt is selected various aggregate ~$6-7B+ at MAC's pro-rata economic share (a mix of property-level non-recourse mortgages — most major properties have building-level mortgages — plus corporate-level senior unsecured notes plus an unsecured revolving credit facility plus a term loan); net debt to EBITDA runs selected various aggregate ~9-12x — very elevated by REIT-sector standards and a defining equity overhang; the credit profile is sub-investment-grade (Ba2/BB-area or lower at the major agencies). The refinancing wall is a key risk — selected various aggregate large tranches of property-level mortgages and corporate notes step up over the next several years, and refinancings at materially higher rates compress NOI economics and force creative restructuring (extensions, modifications, partial paydowns, even handing back keys on under-water properties). The operational turnaround under Hsieh: hired in early 2024 from Spirit Realty (and previously JLL), Hsieh brings a commercial-real-estate and capital-recycling background to the operating side — focusing on (a) re-tenanting anchor and inline boxes with stronger productivity tenants, (b) anchor repositioning (replacing legacy department stores with mixed-use, experiential or value retail), (c) mixed-use redevelopment at select Class A centers (densifying with residential, office, hospitality components — a long-cycle but value-creating strategy where the entitled land has substantial intrinsic value), and (d) operational cost discipline (reducing G&A, streamlining the company). FY2025 dynamics: Class A leasing momentum, asset sales progressing, debt paydown beginning, modest NOI growth, mixed-use projects in various development stages. FY2026 catalyst: continued asset-sale-driven debt paydown, refinancing-cost outcomes on upcoming maturities, mixed-use project milestones, any further dividend changes (Hsieh has indicated the current dividend is sustainable but unlikely to grow meaningfully near-term), and operational-improvement KPIs. Risks: a renewed retail downturn (consumer recession, department-store bankruptcies), refinancing-rate shock, asset-sale pricing far below NAV (forced sales at distressed prices), mixed-use development underwriting disappointing, a forced equity issuance dilution (Macerich has used at-the-market equity programs as part of capital-recycling), or, in the tail, a more aggressive restructuring scenario. Comp set: Simon Property Group (SPG), CBL Properties (CBL), Tanger (SKT), Brookfield (BN), Unibail-Rodamco-Westfield (URW, European/US malls), Federal Realty (FRT, mixed-use), Kimco Realty (KIM, open-air retail).

Capital Position + Balance Sheet

Macerich runs a deeply-leveraged, dividend-cut REIT balance sheet in turnaround mode. The company pays a dividend of selected various aggregate ~$0.68 per share annually ($0.17 quarterly — the post-2023 reduced level), yielding selected various aggregate ~4-5% — a sustainable level supported by cash flow but well below the pre-cut ~$3.40/year rate. No buybacks (cash deployed toward capex and debt paydown). Net debt is selected various aggregate ~$6-7B+ at MAC's pro-rata share, a mix of property-level non-recourse mortgages (each major asset has its own mortgage, sized to the asset's underwriting — a defining feature of mall REITs) plus corporate-level senior unsecured notes, term loan and a revolving credit facility — bringing net debt to EBITDA to selected various aggregate ~9-12x, very elevated versus the REIT-sector mean and a clear overhang. The credit profile is sub-investment-grade (Ba2/BB-area at the major agencies). Asset-sale-driven debt paydown is the primary deleveraging mechanism — selected various aggregate hundreds of millions of proceeds per year going to retire property-level mortgages and reduce corporate-level debt — toward the long-term goal of leverage below ~7-8x. Share count is selected various aggregate ~220-260M (some dilution from past equity issuances; potential future ATM issuances). The principal balance-sheet considerations are the property-mortgage-refinancing wall, the rate environment, asset-sale execution and pricing, JV-partner dynamics, mixed-use redevelopment capex, and the long-tail tenant bankruptcies that can drive sudden NOI gaps and impairments.

Key Core Metrics

• Revenue: selected various aggregate ~$750-840M FY2025
• NOI: selected various aggregate ~$520-580M FY2025
• FFO per share: selected various aggregate ~$1.55-1.95 FY2025 (adj. REIT FFO; GAAP loss-making)
• Mall portfolio: ~40+ regional malls/centers; ~46M+ sq ft GLA; Class A focus
• Geography: California + Arizona + NY Metro + Mid-Atlantic + selected other markets
• Trophy centers: Scottsdale Fashion Square, Tysons Corner Center, Queens Center, Washington Square (JV with PSP), Biltmore Fashion Park, Santa Monica Place, FlatIron Crossing, Los Cerritos Center, Vintage Faire
• Sales productivity: selected various aggregate ~$800-1000+/sf at trophy centers (high end of regional-mall industry)
• Tenant mix: department stores (Nordstrom, Macy's, Dillard's, Bloomingdale's, Neiman Marcus) + specialty (Apple, Tesla, Aritzia, Lululemon, Sephora, Ulta) + luxury (Tiffany, Cartier, LV, Gucci) + dining/entertainment + mixed-use
• Mixed-use redevelopment: select Class A centers densified with residential/office/hospitality components
• "Path Forward" plan (2024): ~$2B+ asset divestitures over multi-year; proceeds to debt paydown + Class A reinvestment
• JV partners: PSP Investments, Heitman, GIC and others; MAC's economic share ~50-67% on many properties
• Dividend: selected various aggregate ~$0.68/share annually ($0.17 quarterly; ~4-5% yield); cut ~80% in 2023
• Pre-cut dividend: ~$3.40/share annually
• Buybacks: none — cash to capex + debt paydown
• Net debt: selected various aggregate ~$6-7B+ (pro-rata economic share)
• Net debt / EBITDA: selected various aggregate ~9-12x (very elevated)
• Credit profile: sub-investment-grade (Ba2/BB-area)
• Property-level mortgages: most major properties have non-recourse mortgages
• Corporate-level debt: senior unsecured notes + term loan + revolver
• Shares outstanding: selected various aggregate ~220-260M
• Capex: selected various aggregate $200-300M+/yr (maintenance + redevelopment + tenant-improvement)
• Capital allocation: asset-sale-driven debt paydown → Class A reinvestment → dividend maintenance → potential mixed-use development
• CEO: Jackson Hsieh (President & CEO, ~1-2 year tenure since early 2024; ex-Spirit Realty CEO, ex-JLL/Cushman & Wakefield)

Market Evaluation

At roughly ~$13-20 per share on ~220-260M shares, Macerich carries an equity value of selected various aggregate ~$3.0-5.0B (and an enterprise value of selected various aggregate ~$9-12B including net debt) — a deeply-discounted mall REIT valuation reflecting the leverage overhang, the dividend cut, the broader retail-mall-structural-decline concerns, and the multi-year-turnaround execution risk; on price-to-FFO MAC trades at selected various aggregate ~8-12x AFFO, and on price-to-consensus-NAV at selected various aggregate ~30-50% of consensus NAV (a deep discount — implied NAV per share runs selected various aggregate ~$20-35+/share against trading prices in the ~$13-20 range). The comp set: Simon Property Group (SPG, the dominant mall REIT, much lower-leveraged, premium-multiple — the benchmark), CBL Properties (CBL, a B-mall REIT), Tanger (SKT, outlets), Brookfield Property (BN/private), Unibail-Rodamco-Westfield (URW, EU/US malls) as the mall-REIT universe; on the broader retail-REIT side, Kimco Realty (KIM, open-air retail), Federal Realty (FRT, mixed-use), Regency Centers (REG, grocery-anchored). FY2026 base case: selected various aggregate ~$770-860M revenue + ~$1.70-2.05 FFO/share + Class A leasing momentum holding + asset-sale program progressing + the dividend stable + modest deleveraging + the operational turnaround underway — a slow visible recovery year. Bull case: selected various aggregate ~$800-900M+ revenue + ~$1.90-2.50+ FFO/share on accelerated Class A leasing and rent growth, faster asset-sale execution at attractive pricing (NAV-validating), refinancings at lower rates (Fed cuts), mixed-use redevelopment monetizing land value, the dividend modestly raised (a confidence signal), NAV-discount compression toward ~15-25%, and a substantial equity re-rating. Bear case: selected various aggregate ~$700-770M revenue + ~$1.30-1.70 FFO/share on a retail-mall downturn (department-store/specialty bankruptcies), refinancing-rate shock at maturities, asset-sale pricing well below NAV (or unable to execute), mixed-use development underperformance, possible further dividend reduction or even suspension, an equity issuance dilution, and tail-risk possibility of a forced restructuring scenario. The thesis turns on the Class-A-mall + Path-Forward pipeline (occupancy + leasing momentum + same-center NOI + asset divestitures + Class A trophy-center focus) plus the dividend + leverage + operational-turnaround pipeline (debt paydown + refinancing cost outcomes + mixed-use redevelopment + Hsieh's operational improvements) plus a recovering retail/mall consumer backdrop plus rate cuts plus Hsieh's continued execution of the multi-year balance-sheet and portfolio turnaround.