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Leasing momentum remained strong in Q1, with Macerich signing 1.6 million square feet of new and renewal leases and saying it is now 83% complete on its leasing “speedometer.” Management said it expects to substantially finish its 1,000-unit leasing target by year-end.
The company reported improving operating trends, including FFO as adjusted of $0.34 per diluted share, sales per square foot of $941 and a 3.9% rise in comparable inline sales. Macerich also said go-forward portfolio NOI grew 1.2% and remains on track for at least 3% full-year NOI growth in 2026.
Macerich is leaning into its Class A mall strategy and expansion plans, highlighted by the $260 million acquisition of Annapolis Mall and continued redevelopment of high-end centers like Scottsdale Fashion Square. Management said the Annapolis deal should be accretive and that all 30 vacant anchor locations are now committed.
Macerich (NYSE:MAC) said its first-quarter 2026 results reflected continued progress on its multiyear “Path Forward Plan,” with management pointing to leasing momentum, a growing signed-not-open tenant pipeline and recent acquisition activity as key drivers of its strategy.
President and CEO Jack Hsieh said the company generated funds from operations, as adjusted, of $0.34 per diluted share in the quarter. For Macerich’s go-forward portfolio, sales per square foot increased to $941, total comparable inline sales rose 3.9% from the prior-year quarter, and foot traffic was slightly higher. Net operating income for go-forward portfolio centers grew 1.2%.
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Hsieh said a central goal of the Path Forward Plan is to “elevate and transform” the merchandising mix at Macerich’s centers by leasing 1,000 new units. He said the company’s cumulative signed-not-open, or SNO, pipeline was $116 million at the end of the first quarter, compared with a $140 million target. That pipeline represents contracted revenue with approximately 80% flow-through to NOI, according to Hsieh.
Macerich said its leasing “speedometer,” which tracks revenue completion under the plan, stood at 81% at the end of the first quarter and had since increased to 83%. Hsieh said the company has 250 leases remaining to complete the plan, with 125 in the letter-of-intent phase and 125 in prospecting.
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“Based upon our new lease approval run rate and the remaining 250 deals that need to execute, I’m confident we will substantially complete our leasing target by year-end,” Hsieh said.
Doug Healey, senior executive vice president of leasing, said Macerich signed 1.6 million square feet of new and renewal leases during the quarter, including 700,000 square feet of new deals. He said new leasing was more than double the amount completed in the first quarter of 2025.
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During the quarter, Macerich signed three anchor tenants: DICK’S House of Sport at Los Cerritos, Round1 at Washington Square and Von Maur at Freehold Raceway Mall. Healey said Von Maur’s 145,000-square-foot store is under construction and expected to open in the third quarter of 2027. Macerich also signed its first deal with Fogo de Chão, a 7,500-square-foot restaurant planned for the redevelopment area of Green Acres Mall in 2027.
Healey said the company has commitments on about 90% of 2026 expiring square footage expected to renew and remain open, with another 10% in the letter-of-intent stage. For 2027 expirations, he said Macerich is 30% committed, with another 55% in the letter-of-intent stage.
Hsieh said he has gained confidence in the “resurgence of Class A regional malls” after two years leading the company, citing limited remaining supply and renewed retailer interest in physical stores. He said 90% of Macerich’s NOI comes from Class A malls and described Gen Z shoppers as a long-term tailwind because the group “over-indexes in visiting physical stores, spending money on items, food, and experiences.”
Hsieh pointed to Scottsdale Fashion Square as an example of the company’s transformation strategy. He said Macerich replaced a 35,000-square-foot home furnishing tenant with luxury and dining options, including Hermès, Élephante and Loro Piana. Cost of occupancy on the new spaces increased more than 10 times, and sales are projected to increase more than 10 times to more than $100 million, he said.
The company also said all 30 of its vacant anchor locations are committed, covering more than 2.9 million square feet and expected to generate more than $750 million in sales. Hsieh cited the opening of Scheels at Chandler Fashion Center in late 2023 as evidence of the strategy, saying the mall’s trade area increased more than 40% and overall traffic rose more than 20% after Scheels opened in a former Nordstrom space.
Hsieh discussed Macerich’s recently closed acquisition of Annapolis Mall for $260 million, plus $12 million for a 13.1-acre vacant Sears parcel. He described the property as a 1.5 million-square-foot Class A regional mall in an affluent East Coast market, with average household income above $161,000 in the primary trade area and a total trade area population above 1 million.
According to Hsieh, the prior owners had already secured a DICK’S House of Sport, expected to open in August, and signed 18 new tenant deals totaling 353,000 square feet scheduled to open in 2026 and 2027. Those tenants include Dave & Buster’s, Tesla, Uniqlo, Aéropostale, Abercrombie, Jack & Jones, Pop Mart and a Lululemon relocation and expansion. The property also has recent long-term renewals with Apple, Zara and AMC.
Hsieh said Annapolis is expected to produce year-one NOI, including SNO, of approximately $29 million and stabilize near $33 million. He said that represents an initial yield of 10.5%, increasing to more than 11% at stabilization. The acquisition is expected to be accretive to Macerich’s 2028 target FFO range by about $0.04 per share on a leverage-neutral basis, according to management.
Chief Financial Officer Dan Swanstrom said FFO, as adjusted, was approximately $92 million in the first quarter. The figure included about $10 million of gains on undepreciated asset sales, primarily from the sale of a land parcel at Washington Square.
Swanstrom said Macerich continues to expect go-forward portfolio center NOI growth of at least 3% for full-year 2026, with growth weighted toward the back half of the year. He said NOI growth is expected to accelerate in 2027 and 2028 as SNO pipeline tenants open and begin paying rent.
The company also outlined several financing actions:
A four-year extension of a $200 million South Plains loan through November 2029 at an existing interest rate of about 4.2%.
An amended and restated $900 million revolving credit facility, increased from $650 million, with maturity extended to March 2030.
Repayment of about $212 million outstanding on Vintage Faire Mall using cash on hand and $100 million of borrowings on the credit line.
A new $115 million five-year mortgage loan at Deptford Mall, closed by the joint venture after quarter-end, at a fixed rate of 6.95%.
Swanstrom said the company had about $780 million in liquidity, including $650 million of capacity on its revolving line of credit. Net debt to adjusted EBITDA was 7.76 times at quarter-end, which he said was one full turn lower than at the start of the Path Forward Plan.
Macerich has completed approximately $1.3 billion in total dispositions to date, or about two-thirds of its initial disposition target. Swanstrom said the company currently expects to sell or give back an additional $300 million to $400 million of non-core assets, outparcels and land by the end of 2026, which would bring total dispositions to about $1.7 billion.
In response to analyst questions, Hsieh said Macerich’s current physical permanent occupancy is around 84%, with management projecting 88% to 89% once the planned store openings are completed. He said converting temporary tenants and older leases into permanent tenants with fixed rent, fixed common-area maintenance and fixed real estate taxes should improve the company’s financial results and merchandising mix.
Asked about the consumer environment, Hsieh said Macerich’s first-quarter comparable sales were up 3.8% and that only one of seven category groups, shoes, was negative. He said the “middle-upper income groups are still spending” and that consumers are continuing to come to the mall and spend.
Healey said retailer demand remains strong despite the broader macroeconomic backdrop. He pointed to interest from legacy retailers, emerging brands, international retailers, experiential concepts, food and beverage, and health and wellness tenants. “We are not seeing any letup at all in retailer demand,” Healey said.
The Macerich Company (NYSE: MAC) is a real estate investment trust (REIT) that specializes in the acquisition, development, ownership and management of regional shopping centers in the United States. Headquartered in Santa Monica, California, the company focuses on high-quality retail properties, including enclosed malls, open-air centers and mixed-use lifestyle destinations. Since its establishment as a REIT in 1994, Macerich has pursued a disciplined strategy of investing in properties that serve strong consumer demographics and offer long-term growth potential.
Macerich's core activities encompass property and asset management, leasing, marketing and redevelopment services.
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The article "Macerich Q1 Earnings Call Highlights" was originally published by MarketBeat.
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