Macerich Earnings: Management Addresses Near-Term Debt Maturities

Macerich reported fourth-quarter results that were relatively in line with our expectations, giving us confidence in our $25 fair value estimate for the no-moat company. Total occupancy improved 10 basis points sequentially to 93.5%, above our 93.1% estimate. Re-leasing spreads were a very strong 17.2% in the fourth quarter, well above our estimate of new rent being 5.5% higher than expiring rent terms. As a result, average base rent increased by 2.6% in the fourth quarter, which is a relatively strong result for the company, and same-store net operating income grew by 3.0%. Macerich reported diluted funds from operation of $0.56 per share for the quarter, a penny better than our $0.55 estimate and three cents better than the $0.53 figure the company reported in the fourth quarter of 2022.