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Jun 30, 2022
Macerich Q2 2022 Earnings Report
The company experienced resilient fundamentals despite macro issues, signed significantly more leases, and saw record high portfolio tenant sales per square foot.
Key Takeaways
Macerich reported a net loss of $15.4 million, or $0.07 per share-diluted, for the second quarter of 2022. However, same center net operating income, excluding lease termination income, increased by 5.4% compared to the same period in 2021. Portfolio occupancy increased to 91.8%, and the company signed 27% more new and renewal leases for 74% more square footage than in Q2 2021. Portfolio tenant sales per square foot reached a record high of $860.
Net loss attributable to the Company was $15.4 million, or $0.07 per share-diluted.
Funds from Operations (FFO), excluding financing expense in connection with Chandler Freehold, was $102.9 million, or $0.46 per share-diluted.
Same center net operating income (NOI), excluding lease termination income, increased 5.4%.
Portfolio occupancy was 91.8%, a 2.4% increase compared to June 30, 2021.
Macerich
Macerich
Forward Guidance
The company narrowed the ranges of its 2022 guidance for both estimated EPS-diluted and FFO per share-diluted, excluding financing expense in connection with Chandler Freehold. They also increased the guidance range midpoint for estimated 2022 FFO per share-diluted, excluding financing expense in connection with Chandler Freehold, and decreased the guidance range midpoint for estimated 2022 EPS-diluted.
Positive Outlook
- FFO per share – diluted, excluding financing expense in connection with Chandler Freehold is expected to be between $1.92 and $2.04
- Assumes no further government-mandated shutdowns of properties
- Does not assume any sale of common equity during 2022
- Cash Same Center Net Operating Income (“NOI”) Growth, excluding Lease Termination Income is expected to be 5.50 %-6.75%
- Lease termination income is expected to be $26 million
Challenges Ahead
- Estimates do not include possible future gains or losses or the impact on operating results from possible future property acquisitions or dispositions, other than land sales.
- Interest expense is expected to be $272 million
- Bad debt expense is expected to be $1 million
- Straight-line rental income is expected to be $3 million
- Amortization of acquired above and below-market leases (net-revenue) is expected to be $5 million