Tenant Sales Above Prepandemic Levels Leads to Macerich Reporting Q3 Results Above Expectations

While third-quarter results for no-moat Macerich were slightly ahead of our expectations, we are reaffirming our $30 per share fair value estimate. Occupancy sequentially improved by 90 basis points for the second straight quarter, rising to 90.3% in the third quarter. This was better than our estimate of a 40-basis-point sequential improvement. Re-leasing spreads continue to be negative, declining 2.5% in the third quarter, which was in line with our estimate of a 2.4% decline. Macerich reported same-store net operating income growth of 21.4%, which was slightly ahead of our forecast for 18.9% growth, as the company saw rent collection significantly improve over the third quarter of 2020. While the company reported funds from operations of $0.45 per share for the third quarter it was 14 cents below the second quarter of 2021 and 7 cents below the third quarter of 2020. That said, the reported figure was 4 cents better than our $0.41 per share estimate for the quarter.