Calif.-based retail real estate investment trust (REIT),
The Macerich Company (
reported fourth quarter 2012 core FFO (funds from operations) per
share of 90 cents, beating the Zacks Consensus Estimate by 3
cents. The earnings were also higher than the year-ago figure of
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For full year 2012, core FFO per share escalated 10.4% year over
year to $3.18 and also exceeded the Zacks Consensus Estimate of
$3.04. The remarkable results were aided by strong fundamentals
in the portfolio with solid tenant sales, leasing growth and
Macerich's reported FFO for the quarter stood at $132.6 million
or 90 cents per share, compared with $118.8 million or 83 cents
per share in the year-ago period. For 2012, reported FFO stood at
$577.9 million or $3.99 per share, compared with $399.6 million
or $2.79 per share in the last year.
Total revenue for the fourth quarter reached $251.2 million, up
from $217.8 million reported in the year-ago quarter. Moreover,
total revenue substantially beat the Zacks Consensus Estimate of
For full year 2012, the company reported revenues of $891.9
million, substantially higher than $803.3 million generated in
the previous year. Also, the revenues outpaced the Zacks
Consensus Estimate of $784 million.
Inside the Headlines
As of Dec 31, 2012, overall portfolio occupancy increased 110 bps
(basis points) to 93.8% from 92.7% reported at year-end 2011. For
full year 2012, mall tenant sales climbed 5.7% to $517 per square
foot from $489 in the year-ago period.
In addition, the re-leasing spreads for 2012 jumped 15.4% year
over year. Same center net operating income advanced 2.9% year
over year to $666.5 million.
Acquisitions and Developments
During the quarter, Macerich acquired Brooklyn-based enclosed
super regional mall - Kings Plaza - for $756 million. Kings
Plaza is 96% occupied and generates revenues per square foot of
Subsequent to quarter-end, the company acquired Valley
Stream-based indoor shopping mall - Green Acres Mall - from a
Vornado Realty Trust (
for $500 million. The mall is currently 94% anchored and
generates revenues per square foot of over $535 annually.
During the fourth quarter, Macerich continued construction at a
526,000 square feet fashion outlet center - Fashion Outlets of
Chicago - which is slated to be completed in Aug 2013. The
project is currently 87% leased and has awaiting deals for
Also, 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 Corporation (
-branded hotel. The company has also inked a 15-year lease with
Intelsat, Ltd. for leasing the office space. The office
building is slated to open in middle of 2014.
At the end of 2012, the company had cash and cash equivalents of
$65.8 million and total debt of $6.6 billion.
During the quarter under review, Macerich completed over $1.2
billion of financings (at its pro rata share) of four properties
- Kings Plaza, Deptford Mall, Queens Center and Santa Monica
Place. The loans carried an average term of over 8 years and an
average interest rate of 3.4%. These major financing activities
considerably extended the maturity date and reduced the floating
rate of the debt balance.
For full year 2013, Macerich expects the FFO per share in the
range of $3.32- $3.42. The underlying assumptions for the
abovementioned guidance include expected assets sale in the range
of $500 million-$1.0 billion during mid-2013 and use of proceeds
to pay off debt; as well as projected same center EBITDA growth
in the range of 2.75%-3.25%.
We are impressed with Macerich's strong fourth-quarter results.
The company's solid portfolio of A-quality malls across the most
attractive U.S. markets has enabled it to hold rents fairly
stable, despite a challenging macroeconomic environment, thereby
generating a steady source of revenue. Moreover, the acquisition
of upscale properties during the quarter has further strengthened
its portfolio. We expect these activities to provide Macerich a
considerable upside potential and boost its top-line growth going
Another REIT -
Simon Property Group Inc (
- reported fourth quarter 2012 results earlier this week with FFO
per share of $2.29, substantially beating the Zacks Consensus
Estimate by 12 cents.
Macerich currently holds a Zacks Rank #3 (Hold).
Note: Funds from operations, a widely accepted and reported
measure of REITs performance, are derived by adding depreciation,
amortization and other non-cash expenses to net income.