The Macerich Company's CEO emphasized at the BofA NY Global Real Estate Conference that while consumers are spending, they are doing so selectively, favoring top-tier retail destinations. This trend is benefiting Macerich's high-quality regional malls, leading to increased foot traffic and strong leasing demand. The company's "Path Forward" plan, now in its 3.0 version, has largely de-risked and exceeded expectations, with approximately $1.3 billion of the targeted $2 billion in dispositions already completed. An additional $300 million to $400 million in dispositions or loan givebacks are expected by year-end, bringing the total to $1.6 billion to $1.7 billion. The plan has also significantly reduced net debt-to-EBITDA from 8.8x to 7.3x, with a target of approximately 6x by 2028.
Macerich has achieved substantial operational success, with its leasing occupancy pedometer at 89%. Of the roughly 1,000 new leases planned, 950 are committed or under LOI, leaving minimal new leasing inventory. The focus has now shifted to conversion, ensuring tenants open and begin paying rent on time, with the rent commencement schedule currently at 59%. The company's "signed but not open" pipeline has reached $128 million out of a $140 million total opportunity, representing committed organic growth expected to flow through Net Operating Income (NOI) by 2028.
Key to Macerich's strategy is addressing vacant anchor stores; all 30 targeted vacant anchors, comprising 2.9 million square feet, are now committed and expected to generate around $750 million in sales. This initiative is designed to drive traffic and further leasing in surrounding inline spaces. Macerich anticipates go-forward NOI to grow at least 3% this year, with an acceleration to at least 3.5% in the second half of 2026, and meaningfully higher in 2027 and 2028 as new tenants open. Premier centers like Karen Commons, Broadway Plaza, Scottsdale Fashion Square, and Tysons Corner are leading this growth.
In terms of external growth, Macerich has a robust acquisition pipeline, noting that the number and volume of attractive marketing transactions are significantly higher than in previous years. The company is selectively pursuing acquisitions that are accretive to its 2028 targets, located in strong trade areas, and where value can be added through leasing or asset management. Macerich's unique advantages, including its integrated operating and leasing platform, deep retailer relationships, and attractive cost of capital, position it well to capitalize on these opportunities, particularly as new Class A regional malls are not being built and top retailers are consolidating into the best centers. The CEO reiterated confidence in achieving higher permanent physical occupancy, increased foot traffic, and a stronger balance sheet.
