Macerich : Annual Report 2024

Published: 2025-04-23 17:45:05 ET MAC

OUR PATH FORWARD

A N N U A L R E P O R T | F O R M 1 0 - K

DIRECTORS

Eric K. Brandt

Diana M. Laing

Retired Executive Vice President and Chief

Retired Chief Financial Officer of

Financial Officer of Broadcom Corporation

American Homes 4 Rent

Steven R. Hash

Marianne Lowenthal

Retired President and Chief Operating Officer

President and Sole Principal of Granadier Co.

of Renaissance Macro Research, LLC

Devin I. Murphy

Enrique Hernandez, Jr.

Retired President of Phillips Edison & Company

Executive Chairman

Andrea M. Stephen

of Inter-Con Security Systems, Inc.

Retired Executive Vice President, Investments

Daniel J. Hirsch

of The Cadillac Fairview Corporation Limited

Principal at Anzu Partners

Jackson Hsieh

President and Chief Executive Officer

of The Macerich Company

EXECUTIVE OFFICERS

Jackson Hsieh

Ann C. Menard

President and Chief Executive Officer

Senior Executive Vice President,

Douglas J. Healey

Chief Legal Officer and Secretary

Senior Executive Vice President,

Daniel E. Swanstrom II

Head of Leasing

Senior Executive Vice President,

Chief Financial Officer and Treasurer

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MACERICH'S PATH FORWARD

DEAR FELLOW SHAREHOLDERS,

Since joining Macerich as President and CEO last March, I have become increasingly confident in our mission to own and operate thriving retail centers that bring our communities together and create long- term value for shareholders, partners and customers.

2024 was a year of exciting change. During my first 90 days, I toured the majority of our key properties, visited our regional offices and spent time with the teams - particularly leasing, development, asset management, property management and operations.

Then, further informed by my 30 years on Wall Street in real estate investment banking and subsequent experience running, restructuring and growing a successful REIT, we launched Macerich's Path Forward plan in July. This clear, executable plan is designed to accomplish three key objectives over its five-year horizon: simplify the business, improve operational performance and reduce leverage.

I am pleased with our steady progress. Importantly, we have made mission-critical enhancements to our organizational structure, processes, analytical methods and technology that we believe provide the strategic roadmap and tools to drive leasing and NOI over a multi-year horizon. This is a major change in mindset and operations for Macerich, which has historically been more focused on managing the business to annual, near-term FFO targets.

Here are accomplishments in 2024 and details on our overall movement toward 2028 goals.

SIMPLIFYING THE BUSINESS

A significant early action last year was to refresh our portfolio groups and asset rankings to give us improved clarity as to our capital allocation priorities. Focusing on criteria beyond sales per square foot - to include market position and other unique factors, such as debt and development potential - we re- ranked every one of our properties as Fortress, Fortress Potential, Steady Eddy or Eddy assets.

Simplifying our business also includes selectively consolidating joint venture interests. In 2024, we were able to purchase our partners' interests and consolidate 100% ownership in Los Cerritos Center, Washington Square, Arrowhead Towne Center, South Plains Mall and Lakewood Center.

IMPROVING OPERATIONAL

PERFORMANCE

Throughout 2024, operational performance at Macerich continued to improve. This is a testament to our outstanding teams and quality retail properties, in addition to our sharp focus on internal process and technology improvements to boost productivity. Key metrics including occupancy, traffic and leasing activity improved notably, excluding our Eddy properties.

At year-end, portfolio occupancy was 94.1%, up 60 basis points year-over-year. Excluding the Eddy properties, portfolio occupancy was 95.8%. Traffic in 2024 was up nearly 2% compared with 2023 and is now back to pre-COVID levels, reflecting

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customers' ongoing interest in spending time at our retail properties. Portfolio average sales for tenants under 10K square feet were $915 per square foot when excluding the Eddy properties.

Leasing continues its powerful momentum across our portfolio. We're making solid progress on achieving the NOI gap we are solving for in our Path Forward plan, based upon expected lease renewals, signed-not-open (SNO) leases and re-leasing and redevelopment opportunities.

At year-end 2024, our SNO pipeline included 104 leases for 1.2 million square feet of new store openings. In addition, we are currently negotiating leases for just under 875,000 square feet of stores

In 2024, we successfully implemented a new leasing dashboard tool that enables leasing, asset management, legal, tenant coordination, construction and senior leadership to collaborate seamlessly, which has vastly improved our visibility and efficiency around leasing and tenant coordination.

This platform is projected to save 15,000 person- hours at Macerich annually and is already speeding up our leasing and tenant opening velocity. We are laser-focused on increasing our inline permanent occupancy, which we expect to grow 5% by 2028. Another exciting opportunity is the progress we are making on delivering tenants into 26 vacant anchor spaces in our go-forward portfolio.

REDUCING LEVERAGE

I am very pleased with the progress we are making on our Path Forward goal to reduce $2 billion in debt through dispositions and givebacks. To date, we have completed nearly $800 million of that disposition target, including Country Club Plaza, Biltmore Fashion Park, The Oaks and Southridge Mall. Wilton Mall recently sold, and The Shops at Atlas Park currently is being marketed for sale. Regarding Santa Monica Place, the loan covering this property is in default, as planned. Future asset sales will continue to focus on whether a property is core to our strategy and may include defaulting on additional mortgage debts and giving possession of such property to the lender. In addition, as part of our Path Forward plan over the next two years, we are targeting for disposition $500 million in outparcels, freestanding retail assets, non-enclosed mall assets and vacant land.

Strategic refinancings are another tool we are successfully employing to reduce leverage or to

Tysons Corner Center | Tysons, VA

Scottsdale Fashion Square | Scottsdale, AZ

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extend out debt maturities. In 2024, we closed on seven transactions for over $1.3 billion of loans, or $1.1 billion at our share, and we have already started to address our 2025 and 2026 debt maturities.

As part of our broader de-leveraging strategy, in 2024 we issued $677 million of common equity. We used net proceeds from this equity raise, together with cash on hand, to repay the $478.0 million Washington Square mortgage loan that had an interest rate of SOFR + 400 and a 2026 maturity date.

LOOKING AHEAD

Overall, our teams are sharply focused on leasing and redevelopment execution, including leasing vacant anchors to improve our portfolio. We are also concentrating efforts to achieve $500 million in disposition execution, including outparcels and other assets as discussed above, over the next two years. Our development efforts focus on three current projects - Scottsdale Fashion Square, FlatIron Crossing and Green Acres - with phased openings over the coming years.

Elevated performance should continue to enable Macerich to strategically invest in and fortify our Fortress, Fortress Potential and Steady Eddy properties - an important aspect of our Path Forward plan that creates additional value.

This is a very exciting time for all of us at Macerich. Our portfolio is extremely valuable, and we are acting decisively on our Path Forward plan to make the most of our opportunities.

Finally, I want to thank our Macerich people, including both tenured leaders and new leaders who joined us last year, along with teams throughout the organization, for their hard work and dedication to moving our company ahead. I'd also like to thank our Board of Directors and shareholders for their continuing confidence in Macerich.

I am excited for 2025 and beyond as we continue to advance our Path Forward.

Best,

Jack Hsieh

President and Chief Executive Officer

Green Acres | Valley Stream, NY

FlatIron Crossing | Broomfield, CO

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2024

FOR THE TRANSITION PERIOD FROM

Commission File No. 1-12504

THE MACERICH COMPANY

(Exact name of registrant as specified in its charter)

Maryland

95-4448705

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification Number)

401 Wilshire Boulevard, Suite 700, Santa Monica, California

90401

(Address of principal executive office, including zip code)

(Zip Code)

(310) 394-6000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 Par Value

MAC

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes È No '

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act Yes ' No È

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes È No '

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes È No '

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer È Accelerated Filer ' Non-Accelerated Filer '

Smaller Reporting Company '

Emerging Growth Company '

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. '

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. È

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. '

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). '

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ' No È

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was approximately $3.3 billion as of the last business day of the registrant's most recently completed second fiscal quarter based upon the price at which the common stock was last sold on that day.

Number of shares outstanding of the registrant's common stock, as of February 27, 2025: 252,496,876 shares

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the annual stockholders meeting to be held in 2025 are incorporated by reference into Part III of this Form 10-K.

THE MACERICH COMPANY

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2024

INDEX

Page

Part I

Item 1.

Business

Item 1A.

Risk Factors

Item 1B.

Unresolved Staff Comments

Item 1C.

Cybersecurity

Item 2.

Properties

Item 3.

Legal Proceedings

Item 4.

Mine Safety Disclosures

Part II

Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities

Item 6.

Reserved

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of

Operations

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Item 8.

Financial Statements and Supplementary Data

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial

Disclosure

Item 9A.

Controls and Procedures

Item 9B.

Other Information

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Part III

Item 10.

Directors, Executive Officers and Corporate Governance

Item 11.

Executive Compensation

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters

Item 13.

Certain Relationships and Related Transactions, and Director Independence

Item 14.

Principal Accountant Fees and Services

Part IV

Item 15.

Exhibits and Financial Statement Schedules

Item 16.

Form 10-K Summary

Signatures

137

PART I

IMPORTANT FACTORS RELATED TO FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K of The Macerich Company (the "Company") contains or incorporates statements that constitute forward-looking statements within the meaning of the federal securities laws. Any statements that do not relate to historical or current facts or matters are forward- looking statements. You can identify some of the forward-looking statements by the use of forward- looking words, such as "may," "will," "could," "should," "expects," "anticipates," "intends," "projects," "predicts," "plans," "believes," "seeks," "estimates," "scheduled" and variations of these words and similar expressions. Statements concerning current conditions may also be forward-looking if they imply a continuation of current conditions. Forward-looking statements appear in a number of places in this Form 10-K and include statements regarding, among other matters:

Stockholders are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company or the industry to differ materially from the Company's future results, performance or achievements, or those of the industry, expressed or implied in such forward-looking statements. Such factors include, among others, general industry, as well as global, national, regional and local economic and business conditions, which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of current and prospective tenants, anchor or tenant bankruptcies, closures, mergers or consolidations, lease rates, terms and payments, elevated interest rates and inflation and its impact on the financial condition and results of operations of the Company, including as a result of any defaults on mortgage loans, and its tenants, availability, terms and cost of financing and operating expenses; adverse changes in the real estate markets including, among other things, competition from other companies, retail formats and technology, risks of real estate development and redevelopment (including elevated inflation, supply chain disruptions and construction delays), acquisitions and dispositions; adverse impacts from any pandemic, epidemic or outbreak of any highly infectious disease on the U.S., regional and global economies and the financial condition and results of operations of the Company and its tenants; the liquidity of real estate investments, governmental actions and initiatives (including legislative and regulatory changes); environmental and safety requirements; and terrorist activities or other acts of violence which could adversely affect all of the above factors. You are urged to carefully review the disclosures we make concerning these risks and other factors that may affect our business and operating results, including those made in "Item 1A. Risk Factors" of this Annual Report on

Form 10-K, as well as our other reports filed with the Securities and Exchange Commission (the "SEC"), which disclosures are incorporated herein by reference. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. The Company does not intend, and undertakes no obligation, to update any forward-looking information to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, unless required by law to do so.

ITEM 1. BUSINESS

General

The Company is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community/power shopping centers located throughout the United States. The Company is the sole general partner of, and owns a majority of the ownership interests in, The Macerich Partnership, L.P., a Delaware limited partnership (the "Operating Partnership"). As of December 31, 2024, the Operating Partnership owned or had an ownership interest in 40 regional retail centers (including office, hotel and residential space adjacent to these shopping centers), two community/power shopping centers and one redevelopment property. These 43 regional retail centers, community/power shopping centers and one redevelopment property consist of approximately 43 million square feet of gross leasable area ("GLA") and are referred to herein as the "Centers". The Centers consist of consolidated Centers ("Consolidated Centers") and unconsolidated joint venture Centers ("Unconsolidated Joint Venture Centers"), as set forth in "Item 2. Properties," unless the context otherwise requires.

The Company is a self-administered and self-managed real estate investment trust ("REIT") and conducts all of its operations through the Operating Partnership and the Company's management companies, Macerich Property Management Company, LLC, a single member Delaware limited liability company, Macerich Management Company, a California corporation, Macerich Arizona Partners LLC, a single member Arizona limited liability company, Macerich Arizona Management LLC, a single member Delaware limited liability company, Macerich Partners of Colorado LLC, a single member Colorado limited liability company, MACW Mall Management, Inc., a New York corporation, and MACW Property Management, LLC, a single member New York limited liability company. All seven of the management companies are owned by the Company and are collectively referred to herein as the "Management Companies."

The Company was organized as a Maryland corporation in September 1993. All references to the Company in this Annual Report on Form 10-K include the Company, those entities owned or controlled by the Company and predecessors of the Company, unless the context indicates otherwise.

Financial information regarding the Company for each of the last three fiscal years is contained in the Company's Consolidated Financial Statements included in "Item 15. Exhibits and Financial Statement Schedules."

Recent Developments

Acquisitions:

On May 14, 2024, the Company acquired its joint venture partner's 40% interest in each of Arrowhead Towne Center and South Plains Mall for a purchase price of $36.4 million and the assumption of its joint venture partner's share of debt for each property. The Company now owns and has consolidated its 100% interests in Arrowhead Towne Center and South Plains Mall (See Note 15-Acquisitions in the Notes to the Consolidated Financial Statements).

On May 17, 2024, the Company acquired the former Sears parcel located at Inland Center for $5.4 million (See Note 15-Acquisitions in the Notes to the Consolidated Financial Statements).

Disclaimer

The Macerich Company published this content on April 21, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 23, 2025 at 21:44 UTC.