The Macerich Company Q1 FY2026 earnings call

Jack gave brief comments on the quarter, updated leasing progress against the Path Forward plan, provided context on Class A regional malls, and discussed the recent acquisition of Annapolis Mall. Doug talked about first quarter leasing momentum, portfolio sales, occupancy, new store openings, leasing activity, and lease expirations. Dan reviewed first quarter financial results, highlighted items in FFO as adjusted, discussed NOI growth, balance sheet progress, and disposition activities.

Our FFO, as adjusted per diluted share, was $0.34. For a go-forward portfolio, sales per square foot increased to $941. Total comparable inline sales increased 3.9% from Q1 2026 versus 2025, and foot traffic was slightly up. Go-forward portfolio centers' NOI growth was 1.2%. Our cumulative snow pipeline at the end of Q1 was $116 million against our $140 million target. That is contracted revenue with approximately 80% flow through to NOI.

We expect Go Forward Portfolio Center's NOI growth for the full year 2026 to be up at least 3% over 2025 and back-end weighted. We have a high level of confidence in achieving the total snow opportunity of approximately $140 million with estimated annual contributions of $30 million in 2026, $40 to $45 million in 2027, and $45 to $50 million in 2028. The Annapolis Mall acquisition is accretive to our 2028 target FFO range by approximately 4 cents per share on a leverage neutral basis.

Q: Could you confirm that there is no mortgage assumed for the Annapolis Mall and how do you plan to capitalize this asset long-term?

A: There's no mortgage on it. Initial funding was funded with cash on hand and $150 million of borrowings on the revolving line of credit. We'll evaluate permanent funding over time.

Q: How do you get to that 11% plus longer-term target yield for Annapolis Mall?

A: The former owners generated leasing momentum and merchandising. There's leasing opportunity in prime space, potential to increase rent and permanent tenancy, and evaluation of the Sears parcel.

Q: Is the same-star NOI for go-forward portfolio for this year still at least 3%?

A: We continue to expect that go-forward NOI for 2026 will be at least 3% and back-end weighted.

Q: How do you evaluate acquisitions and balance financing?

A: Acquisition criteria include being accretive to FFO, strong trade area, and ability to elevate and transform. We evaluate timing, execution, and balance yields and stabilized yields.

Q: Can you give breakdown of mix of new versus renewal leasing and commentary on releasing spreads?

A: 1.6 million square feet released, 700,000 square feet of it was to new retailers. We're not using the releasing spreads metric at this point.

Q: How are you seeing sales trend for different tenants across the portfolio in a K-shaped economy?

A: National Retail Federation projects sales increase. Our sales in first quarter had 3.8% comp sales with most categories positive. Later stage assets had double-digit plus traffic increase.

Q: Update on physical occupancy commencement schedules?

A: We're right on track with rent commencement schedules and it's a collective effort.

Q: Where do we stand as far as the target FFO for 2028?

A: We plan to tighten and narrow the ranges in version 3.0.

Q: Talk about temp tenants and their role?

A: Temp tenants pay gross rent, and they help create opportunities for new tenants and manage price tension.

Q: Current physical permanent occupancy rate and pricing side comment?

A: Physical permanent sits at around 84% now. We're signing leases with increasing lease rates, moving from gross leases to fixed rent plus CAM and taxes.