Macerich Sees Lower Revenues but Solid Vacancy Rates
The Macerich Co., a real estate investment trust that owns interests in 48 regional shopping centers, said its annual revenues for 2017 were down a little more than 6 percent while its net income slipped dramatically.
On the plus side, annual sales for mall tenants—which include Santa Monica Place, Westside Pavilion in Los Angeles and Los Cerritos Center in Cerritos, Calif.—were up 4.8 percent to $660 a square foot for the year ended Dec. 31, 2017, compared to $630 a square foot for the previous year.
Mall occupancy dipped slightly to 95 percent in 2017 compared with 95.4 percent in 2016. Average annual rent per square foot inched up 3.8 percent to $56.97 in 2017 from $54.87 the year before.
Company executives were upbeat about the future of their shopping malls. “We remain excited about the leasing opportunities we see as the digitally native, vertically integrated brands expand into bricks-and-mortar locations in our dominant, top-quality regional malls,” said Arthur Coppola, chairman and chief executive officer of the company, based in Santa Monica, Calif.
Revenues for 2017 totaled $936.6 million, down from $1 billion in 2016. Net income attributable to the company in 2017 was $146.1 million, a decline from $516 million the previous year.
For the fourth quarter ended Dec. 31, 2017, revenues were $256.7 million compared with $272 million during the previous year’s quarter. Net income attributable to the company for the most recent fourth quarter was $32.75 million as opposed to $37.1 million the previous year.
In the financing front, Macerich said it had arranged a $450 million, 12-year fixed-rate loan on its recently expanded and renovated Broadway Plaza shopping center in Walnut Creek, Calif.
Late last year, it closed on the refinancing of Santa Monica Place with a new five-year floating-rate loan of $300 million with an initial rate of 3.13 percent. The former $215 million loan was paid off at the closing of the new loan.