8-K: Macerich Accelerates Leasing, Nears $2B Asset Sale Goal

Macerich reports strong leasing momentum and significant progress on its Path Forward Plan, including asset sales and anchor replacements, while addressing occupancy shifts.

Summary

• Achieved record-breaking leasing activity with 5.4 million square feet of new and renewal space signed and 888 signed leases as of 3Q25.
• The Executive Leasing Committee reviewed 61% more new deals by count and 128% more by square footage year-to-date 2025 compared to the same period last year.
• Opened over 300 new stores between January 2024 and October 2025, including luxury, international, digitally native, large format, and experiential brands.
• The five-year leasing plan is ahead of schedule, with 71% of new lease deals completed as of November 2025, surpassing the 70% year-end 2025 target.
• The Signed Not Open (SNO) pipeline includes ~$100 million of committed in-place revenue, with a cumulative total potential of ~$140 million.
• On track to replace 30 outdated or vacant anchors totaling 2.9 million square feet, with 12 already committed or in LOI, expected to generate an estimated $750 million in annual sales.
• Made substantial progress on leverage reduction, completing or contracting ~$135 million in outparcel sales against a 2025 target of $100-$150 million.
• Completed ~$1.2 billion in mall sales, including Santa Monica Place (defaulted loan), The Oaks ($157 million), Country Club Plaza ($147 million short sale), and Lakewood Center ($332 million).
• The Path Forward Plan aims for a total of ~$2 billion in asset sales, with ~$1.4-$1.5 billion achieved to date.

Sentiment

Score: 7

Explanation: The filing presents a largely positive outlook with strong operational momentum in leasing and significant progress on strategic asset dispositions. While there are minor dips in occupancy and a planned temporary decrease, these are contextualized within a broader growth and deleveraging strategy. The default on the Santa Monica Place loan is a negative, but it's part of a larger, successful asset disposition program.

Positives

• Record-breaking leasing activity with 5.4 million square feet signed and 888 leases in 3Q25.
• Executive Leasing Committee reviewed significantly more new deals (61% by count, 128% by square footage) in 2025 YTD.
• Over 300 new stores opened from Jan 2024 to Oct 2025, enhancing tenant mix with luxury, international, and experiential brands.
• Leasing Speedometer shows 71% completion of new lease deals for the five-year plan by November 2025, ahead of the 70% year-end target.
• Strong SNO pipeline with ~$100 million committed and a total potential of ~$140 million, expected to contribute to future revenue.
• Successful anchor replacements like Dicks House of Sport and Level99 showing strong initial performance.
• Significant progress on the ~$2 billion leverage reduction plan, with ~$1.4-$1.5 billion in asset sales completed or in progress.
• Outparcel sales are on track, with ~$135 million completed or under contract against a $100-$150 million 2025 target.

Negatives

• Leased occupancy slightly decreased from 94.6% in 4Q24 to 94.3% in 3Q25.
• Go-Forward Physical Occupancy decreased from 92.0% in 4Q24 to 90.4% in 3Q25.
• A temporary decrease in total physical occupancy is projected for 1H26 due to planned downtime for new permanent tenant build-outs.
• The company defaulted on a $300 million loan for Santa Monica Place.
• SNO realized through 3Q25 was ~$15 million, slightly below the ~$20 million estimate for 2025.

Risks

• General industry, global, national, regional, and local economic and business conditions, including tariffs, elevated interest rates, and inflation, affecting demand for retail space, tenant creditworthiness, lease rates, and payments.
• Availability, terms, and cost of financing and operating expenses, including increased borrowing costs on outstanding floating-rate debt and defaults on mortgage loans.
• Adverse changes in real estate markets, including competition from other companies, retail formats, and technology.
• Risks of real estate development and redevelopment, including elevated inflation, supply chain disruptions, and construction delays.
• Adverse impacts from any pandemic, epidemic, or outbreak of highly infectious disease on economies and the company's operations and tenants.
• Liquidity of real estate investments.
• Governmental actions and initiatives (legislative and regulatory changes), environmental and safety requirements.
• Terrorist activities or other acts of violence.

Future Outlook

The company anticipates continued strong leasing momentum, with a goal to complete 85% of new lease deals by mid-2026 and 100% eventually. It projects an increase in permanent occupancy by 500 basis points through its Path Forward Plan, despite a temporary dip in physical occupancy in 1H26 due to tenant build-outs. The company is on track to achieve its ~$2 billion asset sales goal, with significant progress already made.

Management Comments

• Executive Leasing Committee has reviewed 61% more new deals by count and 128% more by square footage 2025 year-to-date than during the same period last year.
• The Company is ahead of schedule with 71% complete against initial target of 70% by year-end 2025.
• On track to achieve the ultimate opportunity of ~$140 million in cumulative SNO potential.
• Most successful opening among all Level99 locations.
• Strongest opening out of 34 Dicks House of Sport locations.

Industry Context

The retail real estate sector, particularly mall operators, has faced challenges from e-commerce and changing consumer preferences. Macerich's focus on curating a mix of top-tier, luxury, international, and experiential brands, along with large-format and digitally native tenants, reflects a broader industry trend of transforming traditional malls into mixed-use, experience-driven destinations to boost traffic and engagement. The asset disposition strategy also aligns with efforts to de-lever and optimize portfolios in a challenging interest rate environment.

Comparison to Industry Standards

• The strong performance of new anchors like Dicks House of Sport (strongest opening out of 34 locations) and Level99 (most successful opening among all locations) suggests Macerich's strategy for anchor replacement is yielding above-average results compared to these specific brands' other locations.
• The disposition cap rate expectations of 11-12% for remaining Eddy Malls and 7-8% for remaining outparcel sales provide benchmarks for evaluating the quality and market perception of these assets within the broader retail real estate investment market.

Stakeholder Impact

• Shareholders: Potential for increased shareholder value through improved operational performance (leasing, tenant mix), reduced leverage from asset sales, and strategic repositioning of the portfolio.
• Tenants: Enhanced property value and traffic from new anchor tenants and a curated brand mix, potentially leading to better sales for existing tenants.
• Employees: Continued operational activity and strategic initiatives suggest stable employment, though asset sales could lead to some localized shifts.
• Creditors: Leverage reduction through asset sales aims to improve the company's financial health and ability to service debt, despite the Santa Monica Place loan default.

Next Steps

• Continue executing the Path Forward Plan to achieve 85% new lease deal completion by mid-2026 and 100% full opportunity.
• Continue to open new anchor tenants, with 12 already committed or in LOI for 30 planned replacements.
• Continue with the ongoing sale of outparcels, freestanding retail, non-enclosed malls, and land, targeting an additional ~$375-$475 million.
• Pursue additional Eddy mall sales or give-backs totaling up to $200-$300 million.

Key Dates

Recommendation

The company demonstrates strong operational execution in leasing and is making substantial progress on its strategic asset disposition and leverage reduction plan. The proactive approach to transforming its portfolio with new, high-performing tenants is positive. However, the slight dips in current occupancy, the planned temporary decrease in physical occupancy, and the past loan default on Santa Monica Place introduce some caution. While the long-term strategy appears sound, these factors suggest a "hold" position until the full impact of the Path Forward Plan on financial results and sustained occupancy improvements are more clearly realized.

Keywords

Macerich, MAC, REIT, retail real estate, mall, leasing, occupancy, asset sales, leverage reduction, Path Forward Plan, Nareit, investor presentation, commercial real estate, property development, anchor tenants, SNO pipeline