SANTA MONICA, Calif., Nov. 4 /PRNewswire-FirstCall/ -- The Macerich Company (NYSE: MAC) today announced results of operations for the quarter ended September 30, 2008 which included total funds from operations ('FFO') diluted of $102.1 million or $1.16 per share-diluted, compared to $1.15 per share-diluted for the quarter ended September 30, 2007. For the nine months ended September 30, 2008, FFO-diluted was $301.3 million, or $3.41 per share-diluted compared to $298.2 million or $3.15 per share-diluted for the nine months ended September 30, 2007. Net income available to common stockholders for the quarter ended September 30, 2008 was $5.7 million or $.08 per share-diluted compared to $19.4 million or $.27 per share-diluted for the quarter ended September 30, 2007. For the nine months ended September 30, 2008, net income available to common stockholders was $120.1 million or $1.63 per share-diluted compared to $33.8 million or $.47 per share-diluted for the nine months ended September 30, 2007. The Company's definition of FFO is in accordance with the definition provided by the National Association of Real Estate Investment Trusts ('NAREIT'). A reconciliation of net income to FFO and net income per common share-diluted ('EPS') to FFO per share-diluted is included in the financial tables accompanying this press release.
Recent Activity:
- During the quarter, Macerich signed 266,000 square feet of specialty store leases with average initial rents of $43.47 per square foot. Starting base rent on new lease signings was 21% higher than the expiring base rent.
- Mall tenant sales per square foot for the trailing twelve month period increased to $463 for the quarter ended September 30, 2008 compared to $460 for the quarter ended September 30, 2007.
- Portfolio occupancy at September 30, 2008 was 92.8% compared to 93.5% at September 30, 2007.
- The Company is raising FFO guidance for 2008 by $.35 per share-diluted.
- Since May, the Company has closed or received commitments on over $1.5 billion in financings.
Commenting on results, Arthur Coppola chairman and chief executive officer of Macerich stated, 'While I am pleased with our strong operating results for the quarter, the big story here is that we continue to strengthen our balance sheet through our strong relations with lenders that we have done business with over a long period of time. In addition, we move into the fourth and critical quarter of 2008 bolstered by the fact that our fourth quarter leasing was completed many months ago. Our continued access to capital in a very tough credit marketplace will support our results in the quarter and year ahead.'
Redevelopment and Development Activity
On September 5, 2008, a new, 138,000-square-foot Nordstrom Department Store opened at The Oaks, the latest milestone in the multi-phased expansion and redevelopment of this high-performing 1,047,095-square-foot regional shopping center in Thousand Oaks, California. Simultaneous with the opening of Nordstrom, the Company completed a renovation of the existing center. Construction on the two-level, open-air retail, dining and entertainment venue, anchored by Muvico Entertainment and four restaurants, and a complete interior renovation continues toward a phased opening. The two-level retail expansion is expected to begin opening in phases in late 2008.
Construction continues on Santa Monica Place, a regional shopping center under development in Santa Monica, California. In September, the Company announced that Bloomingdale's will join Nordstrom. Bloomingdale's will open the first of the store's SoHo concept outside of Manhattan. New tenants, recently announced include eight new retail and restaurant names, including: Kitson, Coach, BCBG Max Azria, Joe's Jeans, True Religion and Lacoste, plus the first two chef-driven restaurant concepts for the project's signature rooftop Dining Deck, SINO Restaurant+Lounge and Ozumo. Construction is moving well, with new buildings now taking shape to create the project's sophisticated, urban, open-air environment.
The Company announced six first-to-market luxury retailers and restaurants - Bvlgari, Cartier, True Religion, Teavana, Marcella's and Modern Steak - to Scottsdale Fashion Square, Arizona's luxury and fashion retail flagship. Construction continues on a 160,000-square-foot expansion of the center, which is projected to open in fall 2009 anchored by Barneys New York.
Financing Activity
On July 10, 2008, a $170 million, 6.76% seven year fixed rate loan was placed on Fresno Fashion Fair, a super regional mall in Fresno, California. A portion of the proceeds were used to pay off the previous loan of $63.1 million bearing interest at 6.52%.
On July 10, 2008, the Company placed a $300 million combination construction - permanent loan on The Oaks, a super regional mall in Thousand Oaks, California. The initial funding was $222 million at an interest rate of 4.29%. Approximately $48 million of additional proceeds will be distributed upon completion of the construction and another $30 million upon stabilization. This floating rate loan has an initial term of three years.
Additionally, on July 31, 2008, the Company closed on a $150 million, seven year, 6.11% fixed interest rate loan secured by Broadway Plaza. A portion of the proceeds were used to pay off the former loan of $59 million (with a 6.68% interest rate). The Company owns 50% of this joint venture.
On October 1, 2008, the Company closed on a $29.7 million loan on Chandler Festival and an $18.9 million loan on Chandler Gateway. Both loans are for a seven year term with a fixed interest rate of 6.15%.
On October 16, 2008, the Company closed on a $90 million fixed rate loan on South Towne Center in Sandy, Utah. The seven year fixed rate loan has an interest rate of 6.25%.
In addition, the Company has come to agreement on a $250 million refinancing of Washington Square Mall in Portland, Oregon. That seven year fixed rate loan is expected to close in the 4th quarter of 2008 and the interest rate has been locked at 6.00%. The current loan of $127 million is scheduled to mature in February, 2009.
Upon completion of these financings, year to date the Company will have completed 12 financing transactions for nearly $1.6 billion.
Earnings Guidance
Management is increasing its guidance range for the year ended December 31, 2008, which is now anticipated to be within a range of $5.35 to $5.50 per diluted share of FFO and an EPS range of $2.49 to $2.64.
The following table provides the reconciliation of the range of estimated EPS to estimated FFO per diluted-share.
For the year ended December 31, 2008 Low End High End
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Estimated EPS $2.49 $2.64
Depreciation and amortization including
pro rata share of joint ventures 3.99 3.99
Impact of additional dilutive securities (.05) (.05)
Impact of gain on sale of depreciated assets (1.08) (1.08)
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Estimated diluted FFO per share $5.35 $5.50
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The Macerich Company is a fully integrated self-managed and self-administered real estate investment trust, which focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States. The Company is the sole general partner and owns an 86% ownership interest in The Macerich Partnership, L.P. Macerich now owns approximately 77 million square feet of gross leaseable area consisting primarily of interests in 72 regional malls. Additional information about The Macerich Company can be obtained from the Company's web site at www.macerich.com.
Investor Conference Call
The Company will provide an online Web simulcast and rebroadcast of its quarterly earnings conference call. The call will be available on The Macerich Company's website at www.macerich.com (Investing section) and through CCBN at www.earnings.com. The call begins today, November 4, 2008 at 10:30 AM Pacific Time. To listen to the call, please go to any of these web sites at least 15 minutes prior to the call in order to register and download audio software if needed. An online replay at www.macerich.com (Investing section) will be available for one year after the call.
The Company will publish a supplemental financial information package which will be available at www.macerich.com in the Investing Section. It will also be furnished to the SEC as part of a Current Report on Form 8-K.
Note: This release contains statements that constitute forward-looking statements. 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 to vary materially from those anticipated, expected or projected. Such factors include, among others, general industry, 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 and terms, interest rate fluctuations, 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, acquisitions and dispositions; governmental actions and initiatives (including legislative and regulatory changes); environmental and safety requirements; and terrorist activities which could adversely affect all of the above factors. The reader is directed to the Company's various filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K/A for the year ended December 31, 2007 and the Quarterly Reports on Form 10Q, for a discussion of such risks and uncertainties, which discussion is incorporated herein by reference.
