California-based retail real estate investment trust (REIT),
The Macerich Company
) reported first-quarter 2013 AFFO (adjusted funds from
operations) per share of 86 cents, beating the Zacks Consensus
Estimate by 7 cents.
The earnings were also higher than the year-ago figure of 76
cents. Strong fundamentals in the portfolio with solid tenant
sales and re-leasing spreads escalation aided the year-over-year
FFO (funds from operations) for the quarter came in at $127.0
million or 86 cents per share, compared with $106.2 million or 74
cents per share in the year-ago period.
Total revenue for the first quarter escalated 21.3% to $262.8
million from $216.6 million reported in the year-ago quarter.
Moreover, total revenue significantly beat the Zacks Consensus
Estimate of $228 million.
Inside the Headlines
As of Mar 31, 2013, overall portfolio occupancy jumped 130 bps
(basis points) to 93.4% from 92.1% reported as of Mar 31, 2012.
Moreover, mall tenant sales upped 6.2% to $535 per square foot in
the quarter from $504 in the year-ago period.
In addition, re-leasing spreads for the first quarter
increased 14.9% year over year. Same center net operating income
(NOI) during the quarter advanced 3.4% to $180.4 million from
$174.5 million in prior-year quarter.
Notable Portfolio Activities
In the first quarter, Macerich continued construction at a
526,000 square feet fashion outlet center - Fashion Outlets of
Chicago - which is slated to open for business on Aug 1,
2013. Also, Macerich stated that over 150 of the most
desired brands joined the mall including Bloomingdale's The
Skechers USA Inc.
), Last Call by Neiman Marcus and
Additionally, Macerich has ongoing constructions at Tysons
Corner Center for the development of a mixed use project, which
includes an office building, a luxury residential tower and a
Hyatt Hotels Corp.
)'s Hyatt Regency hotel. Macerich recently inked a lease deal
with Deloitte LLP during the first quarter for leasing 3 floors
in the office tower at the development project.
Notably, in the last quarter, the company signed a 15-year
lease with Intelsat, Ltd. for leasing the office space at the
Tysons Corner Center. The 2 tenants occupy more than 60% of the
project's leasable office space. The project is slated to
open in 2014.
As of March 31, 2013, Macerich had cash and cash equivalents of
$68.8 million compared to $65.8 million at the end of 2012. The
company had a total debt of $7.0 billion at the end of first
quarter of 2013.
In the quarter under review, Macerich completed over $700
million of financings (at its pro rata share) of 3 properties -
Green Acres Mall, Scottsdale Fashion Square and SanTan Village
Center. The loans carried an average term of over 8.4 years and
an average fixed interest rate of 3.21%. These major financing
activities considerably extended the maturity date and reduced
the floating rate of the debt balance.
For full-year 2013, Macerich increased its FFO per share
guidance and now expects it in the range of $3.35-3.45 (prior
range of $3.32-3.42).
Consistent with its winning streak, Macerich came up with
another robust quarterly result. The company's solid portfolio of
A-quality malls across the most attractive U.S. markets has
enabled it to hold rents fairly stable, thereby leading to an
increase in occupancy levels and revenue figures.
Moreover, the company's strong balance sheet and liquidity
position further added to the bliss. We expect these activities
to provide Macerich a considerable upside potential and boost its
top-line growth going forward.
Currently, Macerich holds a Zacks Rank #3 (Hold).
Note: FFO, a widely accepted and reported measure of REITs
performance, are derived by adding depreciation, amortization
and other non-cash expenses to net income.
GAP INC (GPS): Free Stock Analysis Report
HYATT HOTELS CP (H): Free Stock Analysis
MACERICH CO (MAC): Free Stock Analysis Report
SKECHERS USA-A (SKX): Free Stock Analysis
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