The Macerich Company Q2 FY2026 earnings call

Path Forward 3.0 Strategic Plan Execution

• The company is meaningfully ahead of schedule on its three-pillar Path Forward 3.0 plan (simplify the business, improve operational performance, reduce leverage), with 88% of the five-year leasing target completed, exceeding the 85% mid-year goal.
• Only 170 of the planned 1,000 new deals remain to be signed, two-thirds of which are already in the letter of intent stage, so focus has shifted to converting signed leases to open, rent-paying stores. As of Q2 end, 57% of signed not open (SNO) tenants have opened, on track to exceed the 60% year-end target.
• Leasing momentum remains strong: 93% of 2026 lease expirations are already committed for renewal, with another 6% in LOI; 50% of 2027 lease expirations are committed, with another 40% in LOI. The company is already actively leasing for 2029 and 2030 due to scarce available space in top-tier centers.
• Portfolio sales per square foot hit a new all-time high, reflecting the success of the company's elevation and transformation strategy for high-quality assets. In Q2 2026, 1.3 million square feet of new and renewal leases were signed, matching the 2025 Q2 pace (2025 was a record leasing year for the firm).

Transformative Leasing & Operational Results

• Late-stage transformation centers (e.g., Tyson's Corner, Scottsdale Fashion Square) are delivering low-teens year-to-date traffic growth and strong NOI gains, while mid-stage centers are outperforming the go-forward portfolio average, validating the strategy's incremental impact. New anchor openings generate cascading positive follow-on effects: announcing a deal enables immediate inline leasing, opening brings increased center traffic, and multi-year operation leads to sustained rent growth and higher occupancy.
• Notable recent results include the new 45,000 square foot Zara flagship at Tyson's Corner, which ranked #1 in U.S. sales and #5 globally on opening weekend and remains top 10 nationally. Transformation of the Tyson's Corner west wing is complete with high-profile traffic-driving tenants including Eataly and Din Tai Fung, and year-to-date traffic at Tyson's is already up 10% over 2025.

Balance Sheet & Disposition Progress

• The company has reduced leverage meaningfully: net debt to adjusted EBITDA was 7.3x at Q2 end, a 0.5x improvement from last quarter and 1.5x lower than at the launch of Path Forward. Including unsettled forward equity proceeds, net debt to adjusted EBITDA is now below 7x, with a target range of ~6x.
• To date, the company has completed ~$1.3 billion in total dispositions, equal to two-thirds of its initial disposition target. It expects to sell an additional $300-$400 million in non-core assets by the end of 2026, bringing total dispositions to ~$1.7 billion. Approximately $100 million of assets are currently under contract.
• Year-to-date 2026, the company has completed multiple financing transactions including a $900 million amended revolving credit facility, new mortgage debt, and loan extensions, with ~$1.2 billion in current liquidity plus an additional $372 million in expected net proceeds from a recent forward equity offering to fund future acquisitions.

External Growth via Acquisitions

• Acquisition opportunity is at its highest level since the launch of Path Forward, with a robust pipeline of both on and off-market opportunities. Macerich maintains strict acquisition criteria: assets must be accretive, located in strong trade areas, and able to be elevated via the company's existing leasing and operational playbook.
• Recent acquisitions of Annapolis Mall and Crabtree have performed well: Annapolis onboarding is complete, with Dick's House of Sport opening in August; Crabtree has already secured commitments for 45 new/expansion leases and 35 renewal leases since acquisition, with new tenants including Lululemon, Level 99 and Fogo de Chao.

Macerich reports financial performance across two core segments: full portfolio and go-forward portfolio (the company's actively invested high-quality asset base). For Q2 2026, full portfolio average sales reached a new company high of $919 per square foot, with overall portfolio occupancy of 94% (up 60 basis points sequentially). The go-forward portfolio, which contributes ~87.7% of total quarterly NOI ($185 million of the total $211 million in Q2 2026 NOI, and ~90% of total six-month 2026 NOI), posted: sales of $954 per square foot; occupancy of 95.5% (up 60 basis points sequentially and 270 basis points year-over-year); and 3.8% year-over-year growth in NOI excluding lease termination income. For the first half of 2026, go-forward portfolio NOI grew 2.5% year-over-year. Adjusted FFO for the full company was $100 million, or $0.35 per diluted share in Q2 2026.

• Full year 2026 go-forward portfolio NOI growth is maintained at a minimum of 3% year-over-year, with Q2 2026 growth of 3.8% implying at least 3.5% NOI growth for the second half of 2026. Growth will accelerate meaningfully in 2027 and 2028 as SNO tenants open and begin contributing rent.
• The 3-year (2026-2028) NOI CAGR midpoint is 6.5%, implying over 8% average annual NOI growth across 2027 and 2028, with 2028 growth slightly higher than 2027.
• The total estimated annual incremental SNO opportunity is ~$140 million, with expected contributions of $30 million in 2026 (back-end weighted), $40-$45 million in 2027, and $45-$50 million in 2028.
• The company expects to exceed its 60% year-end target for SNO store openings. Long-term, after completion of the 1,000-deal transformation program, the go-forward portfolio will operate at higher occupancy and sales productivity than any prior period, enabling sustained same-center NOI growth through ongoing portfolio curation.

• The $76 million pro-rata share loan for the 29th Street property remained in default after its February 2026 maturity. The company is in discussions with the lender but has not finalized a resolution as of the Q2 call.
• The company is addressing remaining 2026 debt maturities through a combination of potential asset sales, refinancings, loan modifications, or property givebacks if other options are not available.
• Higher long-term interest rates could impact refinancing costs, though management notes that current spreads remain constructive at all-time lows, and the company already assumed a 6% all-in financing cost in its base plan, so elevated rates have not impacted current capital allocation plans.
• Acquisition opportunities require transformation and leasing execution, which requires significant upfront time and capital investment, and there is no guarantee that projected value creation will be realized. Competition for quality assets could increase over time, potentially compressing acquisition cap rates and reducing available attractive opportunities.

Q: Now that all 30 anchor replacements are committed, what are the expected second-order effects on inline leasing, rent spreads, and growth over the near and long term?

A: Anchor transformation creates staged positive effects. When an anchor deal is signed and announced, it immediately enables strategic leasing of adjacent inline space. When the anchor opens, it brings increased traffic and energy to its wing of the center. After two years of operation, with the anchor and multiple new inline tenants open, the full lift to occupancy, rent, and net operating income is realized. Examples include the Shields anchor at Chandler (the top performing Shields location, drawing 3.1 million annual visitors, enabling new complementary tenants like Seafood City and Din Tai Fung) and Dick's House of Sport at Freehold, which is on track to add 1 million incremental annual customers to the center.

Q: How should investors think about acquisition volumes over the next 12-18 months, and what are the company's risk/portfolio constraints for new acquisitions?

A: Macerich currently has its largest ever pipeline of on and off-market acquisition opportunities offering stabilized yields of 9-11%. Management will not provide a specific volume target, but notes the company has a unique competitive advantage from its integrated operating platform, strong tenant relationships, available capital, and ability to close quickly with certainty. Deploying the full $372 million of available forward equity proceeds into 9-11% yield acquisitions would generate $0.02-$0.04 of incremental FFO accretion and reduce leverage to the high 5x range, so the company expects to deploy this capital well before June 2027. The firm will remain disciplined and only pursue deals that meet its strict criteria.

Q: After the strong 3.8% Q2 NOI growth, is the second half of 2026 expected to see any headwinds, and what is the cadence of growth going forward?

A: The full year 2026 target of at least 3% NOI growth remains intact, and the 2.5% year-to-date growth through Q2 implies at least 3.5% growth in the second half, with fourth quarter growth expected to be slightly stronger than the third quarter due to back-weighted SNO contributions. Growth will accelerate meaningfully in 2027 and 2028: the 3-year 2026-2028 CAGR midpoint of 6.5% implies over 8% average annual growth across 2027 and 2028, with 2028 growth slightly higher than 2027. Late-stage transformation centers are already delivering low-teens traffic growth and strong NOI lifts, with mid-stage centers starting to outperform the portfolio average as transformation progresses, confirming the strategy is working.

Q: Is the company seeing increased competition for quality enclosed mall acquisitions, given the limited pool of experienced buyers?

A: Competition exists for attractive assets, but Macerich has unique advantages that help it win deals. The company has built out a dedicated acquisitions team and has deep, established relationships with key growing tenants like Dick's House of Sport, giving it more insight and predictability when underwriting transformation plans. The company also has experience partnering with local municipalities to deliver successful community-focused redevelopment projects, like the Flatiron transformation in Broomfield, which opens up additional deal opportunities that less experienced operators cannot execute. Macerich's current pipeline is the largest it has been in years, split evenly between on-market and off-market opportunities.