Macerich(US:MAC)2022-11-07 21:07Real Estate Holdings and Acquisitions - As of September 30, 2022, the Company owned or had an ownership interest in 44 regional town centers and five community/power shopping centers, totaling approximately 48 million square feet of gross leasable area (GLA) [123] - The Company acquired the remaining 50% ownership interest in two former Sears parcels for a total purchase price of $24.5 million on August 2, 2022 [127] - The Company has a joint venture with Simon Property Group, funding $38.6 million of the total $77.2 million incurred for the development of Los Angeles Premium Outlets as of September 30, 2022 [145] Financial Performance - For the three months ended September 30, 2022, the Company reported a gain on sale of land of $10.4 million, with proceeds of $26.4 million from various land sales [133] - The Company expects continued negative impacts on results due to the COVID-19 pandemic, affecting occupancy and leading to additional anchor closures [149] - The Company anticipates continued negative impacts on results for the remainder of 2022 due to the ongoing effects of the COVID-19 pandemic [173] - The Company expects to generate positive cash flow from operations in 2022, which will be used to de-lever the balance sheet and fund development projects [183] - For the three months ended September 30, 2022, the net loss attributable to the Company was $15.2 million, compared to a net income of $106.7 million for the same period in 2021 [238] - The Funds From Operations (FFO) attributable to common stockholders and unit holders for the nine months ended September 30, 2022, was $294.7 million, a decrease from $303.5 million in the same period of 2021 [238] Leasing and Occupancy - The leased occupancy rate was 92.1% as of September 30, 2022, representing a 1.8% increase from 90.3% at the same date in 2021 [179] - Comparable tenant sales for spaces less than 10,000 square feet decreased by 0.6% in Q3 2022 compared to Q3 2021, but increased by 4.8% for the nine months ended September 30, 2022 [170] - The Company signed 83 new leases and 136 renewal leases during Q3 2022, comprising approximately 1.1 million square feet of GLA [172] - Leasing revenue increased by approximately 2.48% in Q3 2022 compared to Q3 2021, driven by higher occupancy and releasing spreads [175] - As of September 30, 2022, the Company executed leases or commitments for 88% of the leased space expiring in 2022, with another 7% in the letter of intent stage [171] Debt and Liquidity - The Company repaid $1.7 billion of debt during the year ended December 31, 2021, representing a 20% reduction in outstanding debt since December 31, 2020 [139] - As of September 30, 2022, the Company's total outstanding loan indebtedness was $6.77 billion, including $4.35 billion of consolidated debt [219] - The Company has a $700 million credit facility, with $101.0 million borrowed as of September 30, 2022, and an availability of $423.8 million for additional borrowings [224] - The Company’s cash and cash equivalents as of September 30, 2022, were $110.0 million, indicating a solid liquidity position [226] - The Company anticipates meeting its liquidity needs for the next twelve months through cash generated from operations, distributions from joint ventures, working capital reserves, and/or borrowings under its line of credit [212] Interest Rates and Financial Risks - Interest expense increased by $12.3 million from 2021 to 2022, primarily due to financing arrangements and changes in fair value of underlying properties [192] - A 1% increase in interest rates is estimated to decrease future earnings and cash flows by approximately $8.4 million per year based on $0.8 billion of floating rate debt outstanding [244] - The Company has three interest rate cap agreements in place to manage interest rate risk, ensuring that floating rates do not exceed specified levels [242] - The discontinuation of LIBOR is expected to affect the Company's variable rate debt, with potential higher interest costs depending on the replacement rates [247] Capital Expenditures and Future Investments - For the nine months ended September 30, 2022, capital expenditures for consolidated centers totaled $98.1 million, a 55.4% increase from $63.2 million in 2021 [213] - The Company expects to incur approximately $20.0 million to $30.0 million for development, redevelopment, expansion, and renovations during the remainder of 2022 [214] Dividend and Shareholder Returns - The Company declared a cash dividend of $0.15 per share for each quarter in 2021 and the first three quarters of 2022, increasing to $0.17 per share for the fourth quarter of 2022 [150] - Cash dividends for the nine months ended September 30, 2022, were $146.8 million, funded by operations, with a quarterly cash dividend increase of 13.3% to $0.17 per share announced on October 28, 2022 [225]