Macerich (MAC) Q4 2025 Earnings Call Transcript

Motley Fool Transcribing, The Motley FoolTue, February 24, 2026 at 5:39 AM UTC

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Date

Wednesday, Feb. 18, 2026 at 5:00 p.m. ET

Call participants -

President and Chief Executive Officer — Jackson Hsieh

Senior Executive Vice President, Leasing — Douglas J. Healey

Executive Vice President and Chief Financial Officer — Daniel E. Swanstrom

Executive Vice President, Asset Management and Development — Brad Miller

Takeaways -

Leasing volume -- 7.1 million square feet of new and renewal leases signed, representing an 85% increase and a new company record.

Leasing speedometer -- 76% completion versus a 70% year-end target, positioning the company to achieve an 85% target by mid-2026.

Committed anchor replacements -- All 30 anchor and big box replacements under the path forward plan now committed, totaling 2.9 million square feet and projected to drive $750 million in annual tenant sales.

Sign-not-open pipeline (SNO) -- $107 million in the SNO pipeline versus a $100 million target, out of a cumulative $140 million opportunity identified.

Disposition progress -- $1.3 billion in completed mall and outparcel transactions, with a remaining objective of $2 billion.

Portfolio sales -- $881 per square foot at quarter-end, up $14 sequentially; go-forward portfolio at $921 per square foot, the highest level since the company went public.

Occupancy -- 94% at quarter-end, up 60 basis points from last quarter; go-forward portfolio occupancy reached 94.9%.

Leasing spreads -- Trailing twelve-month leasing spreads of 6.7%, increasing 80 basis points sequentially, marking 17 consecutive positive quarters.

New stores opened -- 1.3 million square feet of new stores opened in 2025, including the first DICK'S House of Sport anchor at Freehold Raceway Mall.

2026 lease expirations -- 80% committed, 16% in the letter of intent stage as of the call, compared to 63% committed for expiring leases at the same point in the previous year.

FFO (Funds From Operations) -- $129 million, or $0.48 per share, excluding specific financing and investment adjustments.

Legal settlement impact -- $16.1 million of settlement income in FFO, partially offset by $8.4 million in above-target annual incentive payouts, netting $0.03 per share.

Go-forward portfolio NOI growth -- 1.8% increase for the year, or 2.5% when excluding the impact from Forever 21; fourth quarter growth would have been 2.7% excluding this tenant’s departure.

Liquidity -- $990 million available, including $650 million on the revolving line of credit.

Net debt to EBITDA -- 7.8x at quarter-end, a full turn lower than plan outset, with further deleveraging to the low to mid-six times range targeted.

South Plains loan extension -- Closed a four-year, $200 million extension through November 2029 at a 4.2% interest rate, maintaining the coupon rate and eliminating debt mark-to-market amortization costs.

Remaining dispositions pipeline -- $400 million to $450 million in sales needed to reach the $2 billion goal; $15 million under contract and $50 million in negotiation.

Physical occupancy -- Go-forward portfolio leased occupancy reported at 94.9%, with physical occupancy at approximately 91%.

Acquisition strategy -- Future acquisitions to be “accretive to our 2028 FFO plans and targets,” with a stated focus on value-add lease-up opportunities similar to Crabtree, not on stabilized, low cap rate assets.

2026 SNO contribution -- Estimated incremental annual NOI contribution of $30 million in 2026, $40 million-$45 million in 2027, and $45 million-$50 million in 2028, all back-end weighted and aligning with management’s guidance for an earnings inflection point.

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Risks -

Daniel E. Swanstrom stated, "this $76 million loan at the company's pro rata share is now in default after its recent maturity date" for the 29th Street property.

Management cited "frictional downtime" related to renewals and anchor transitions, with go-forward portfolio NOI growth of 1.8% for the year versus a 5.2% CAGR targeted over 2025-2028 in company planning materials.

Summary

The Macerich Company (NYSE:MAC) reported all components of its path forward plan ahead of schedule, with record leasing volume and significant progress on anchor and disposition objectives. Financial flexibility was enhanced by addressing all 2025 and most 2026 debt maturities, supported further by a four-year extension of the South Plains loan. Management confirmed leasing and NOI contributions from the SNO pipeline will be back-end weighted, with outsized growth projected for 2027 and 2028. The company substantially committed anchor replacements across the portfolio, highlighted by the inclusion of new DICK'S House of Sport stores, driving tenant sales and traffic. Capital allocation for external acquisitions will prioritize value-add opportunities that meet 2028 FFO accretion targets, with equity issuance as a preferred funding source subject to market conditions.

The legal settlement in the fourth quarter resulted in a one-time income boost, not included in ongoing or forward NOI and FFO calculations.

Dispositions remain on track despite encumbrances and entitlement processes causing timing delays in asset sales, as clarified by management.

Luxury retail represents a small fraction of both the SNO pipeline and in-place portfolio, with nearly all luxury leasing activity concentrated at the Scottsdale property.

Management announced intent to update the path forward plan and initiate forward guidance in 2027, with disclosure of rent commencement dates as a planned new metric.

Permanent occupancy made up most gains in reported occupancy, as opposed to temporary tenants, and current leasing momentum enables management to proactively work ahead on 2027-2028 expirations.

Brad Miller confirmed that roughly $20 million of the $107 million SNO pipeline is attributable to development projects at Green Acres and Scottsdale, both of which are nearing full commitment and lease-up.

Earnings call explicitly stated, "retailer environment and tenant demand remains strong," and cited 40% more deals and 30% higher square footage reviewed in 2025 than during the previous year.

Jackson Hsieh described continued investment in operational efficiencies and technology as enabling scaled growth, but stated, "is still early days for us," indicating current focus is on core real estate execution.

Industry glossary -

SNO (Sign-not-open): Executed leases for space that has not yet commenced rent, representing a pipeline of future NOI generation.

Leasing speedometer: Internal metric tracking completion progress toward the company's multi-year new leasing objectives.

NOI (Net operating income): Net income generated from property operations, commonly excluding one-off gains or losses such as legal settlements.

Go-forward portfolio: Subset of the portfolio identified as core assets and used for reporting ongoing operational metrics after completing planned dispositions or giving back properties.

Full Conference Call Transcript

Jackson Hsieh: Thank you, Alexandra. And good afternoon, and thank you for joining us. Before I begin, I want to thank the entire MAC team for their outstanding contributions throughout 2025. This was a year of significant execution and progress, made possible by the dedication and hard work of our people across the organization. 2025 was a pivotal year for the company. We entered the year with clear objectives under our path forward plan, simplifying the business, driving operational performance improvement, and reducing leverage. I am pleased to report that we have delivered against each of these pillars.

Today, I will spend time on our operational performance and leasing achievements and then turn it over to Doug and to Dan to discuss the portfolio and balance sheet in more detail. Let me start with leasing, which continues to be the engine driving our path forward plan. For the full year, we signed 7,100,000 square feet of new and renewal leases on a comparable center basis, an 85% increase over full year 2024, setting a new company record. Turning to our leasing speedometer, which tracks revenue completion percentage for all new leasing activity required to achieve our five-year plan, we are at 76% today, exceeding our 2025 year-end target of 70%.

This puts us well on track for mid-2026 target of 85% and positions us to substantially complete our new leasing objectives by year-end 2026. Importantly, we are achieving our target market rent assumptions in the plan. Another way to look at how far along we are with leasing is in terms of the new deals left to sign in our five-year plan. We are tracking a total of approximately 1,000 new deals in this plan. We now have 650 new deals open, executed, or on lease documentation. All that is remaining is 350 uncommitted new deals totaling 1,600,000 square feet, of which 150 are in the letter of intent stage.

Our sign-not-open pipeline has grown to approximately $107,000,000, exceeding our 2025 year-end target of $100,000,000. This is relative to our total cumulative SNO opportunity of approximately $140,000,000 in excess of the revenue generated in 2024. We have high confidence in achieving the full opportunity. Of the $140,000,000 of total SNO, the estimated incremental annual contribution is $30,000,000 in 2026, $40 to $45,000,000 in 2027, and $45 to $50,000,000 in 2028. I am excited about the progress we have made on our anchor initiatives. We targeted 30 anchor and big box replacements in our path forward plan, and I am pleased to report that all 30 are now committed.

We have five anchors open, five under construction, 11 executed, and nine with leases out. Consistent with the update we provided with our NAREIT presentation in December, these 30 anchors total 2,900,000 square feet and are expected to generate approximately $750,000,000 in annual tenant sales. More importantly, they are expected to drive traffic, extend dwell time, and catalyze in-line leasing throughout our centers. On a disposition front, we have made substantial progress toward our $2,000,000,000 goal. We have completed $1,300,000,000 of total mall and outparcel sales transactions to date. The team is very focused on getting the remaining mall and outparcels sold. I want to spend a moment on Crabtree, which we acquired in June.

We are on track with our renovation plans, and a new DICK’S House of Sports store will open later this year. We were also pleased to see last month's announcement by Belk that they are consolidating their two locations at Crabtree into a full store remodel and long-term lease extension of their flagship location at the east end of the property. Belk is a leading brand in the Carolinas, and their new store with a wine and coffee bar, personal shopper studio, and other amenities will complement the remerchandising and leasing initiatives we have underway. We have already secured a commitment for backfilling the second Belk anchor store with an entertainment-oriented retailer.

Along with a very productive Macy’s store, this solidifies the asset. Additionally, with the in-line space, we have commitments on 18 new and 31 renewal leases. While we have only owned the mall since June, I believe we have already demonstrated that the platform we have built can create value. We will continue to look for additional opportunities to put our platform to work. The milestones we delivered in 2025—leasing volume well ahead of plan, all 30 anchors committed, $1,300,000,000 in dispositions completed—demonstrate that the path forward plan is no longer just a plan. It is well along the way to completion across every pillar. As we enter 2026, I have tremendous confidence in our trajectory.

The heavy lifting of de-risking the path forward plan is substantially complete. Our key focus areas for 2026 are: one, completing the leasing pipeline of 350 additional new leases, 150 are in the LOI stage; two, solidifying the remaining 2026 lease expirations and continuing to get ahead of the 2027 expirations; three, getting tenants into physical spaces built out and paying rent on time; four, completing the remaining dispositions; and five, continuing to evaluate new acquisition opportunities that are accretive to our plan and portfolio. Lastly, I want to note that we expect to provide an path forward plan 3.0 at REITweek in June, and we intend to return to providing earnings guidance beginning in 2027.

Doug, why do you not discuss the portfolio and leasing activity in more detail?

Douglas J. Healey: Thanks, Jack. Portfolio sales at the end of the fourth quarter were $881 per square foot. That is up $14 when compared to the last quarter, and this now represents a high watermark for the company dating back to when we went public in 1994. When you look at our go-forward portfolio, sales were actually $921 per square foot. Traffic for 2025 was flat when compared with the same period in 2024. Occupancy at the end of the fourth quarter was 94%, up 60 basis points from the last quarter, with the majority of this increase coming from permanent occupancy versus temporary occupancy.

The go-forward portfolio occupancy at the end of the fourth quarter was 94.9%, also up 60 basis points from the last quarter. Trailing twelve-month leasing spreads as of December 31, 2025 were 6.7%, up 80 basis points from the last quarter, and this now represents 17 consecutive quarters of positive leasing spreads. In the fourth quarter, we opened 416,000 square feet of new stores, for a total of 1,300,000 square feet for all of 2025. Most notably, we opened our first DICK’S House of Sport store at Freehold Raceway Mall in the former Lord & Taylor box. The grand opening was one of the best in their 35-store chain, and the store continues to outperform all expectations.

As a result, we have seen an increase in traffic not only in their wing, but also in the mall overall, and this has already had a positive effect on leasing space outside the DICK’S location on both levels of the mall. We remain very bullish about this concept. Of the nine commitments we have with DICK’S House of Sport, as mentioned, Freehold is now open, and we currently have four additional stores under planning and/or under construction at Crabtree Valley Mall, Tysons Corner Center, Washington Square, and Valley River. Crabtree will open in the fall of this year, Tysons Corner and Washington Square will open in 2027, and Valley River will open in 2028.

And we are working on adding to this list, so stay tuned for more announcements in the very near future. As Jack mentioned, leasing was very strong in 2025. For the year, we signed 7,100,000 square feet of new and renewal leases. This is 85% more square footage than we leased in 2024, and 2024 was a record year for us. It is important to note that of the 7,100,000 square feet, 30% were new lease signings. Turning to our lease expirations, 2025 is behind us, and we are now focused on 2026.

Today, we have commitments on 80% of our 2026 expiring square footage that is expected to renew and not close, with another 16% in the letter of intent stage. This is unprecedented for us this early in the year. To put it in perspective, at this time last year, we were only 63% committed for our 2025 renewals, so we can now focus on our 2027 and, in some instances, our 2028 lease expirations. Being able to work this far into the future significantly de-risks the renewal portion of our five-year plan. The retailer environment and tenant demand remains strong. In 2025, we reviewed and approved 40% more deals and 30% more square footage than we did in 2024.

It is early days, but thus far, we are on par with where we were last year at this time. Further to this point, in December, we attended the annual ICSC Leasing Conference in New York City. Approximately 10,000 landlords and retailers attended to talk about current and future business. In just two days, we had almost 300 meetings with over 200 different retailers looking to do business in our portfolio. All categories remain active, including traditional retailers, international retailers, entertainment, experiential, food and beverage, wellness, and emerging brands.

And we continue to sign leases with some of the best brands in our industry, such as Apple, Zara, Aritzia, Lululemon, Alo Yoga, American Eagle, Abercrombie & Fitch, gorjana, Aéropostale, and Warby Parker, just to name a few. As I have said in the past, never has the depth and breadth of retailer demand been what it is today, and, again, I think this speaks to not only the health of our industry, but also to our portfolio of pure-play Class A retail centers. And with that, I will turn the call over to Dan to go through our fourth quarter financial results.

Daniel E. Swanstrom: Thanks, Doug, and good afternoon. I will start with a review of fourth quarter financial results. FFO excluding financing expense in connection with Chandler, Freehold accrued default interest expense, and gain on non-real estate investments was approximately $129,000,000, or $0.48 per share during 2025. I would like to highlight the following item included in our FFO adjusted for the quarter: legal claims settlement income of $16,100,000 partially offset by corporate expenses related to annual incentive bonus payouts above target levels, which resulted in an $8,400,000 net impact, or $0.03 per share. Go-forward portfolio centers NOI, excluding lease termination income, increased 1.7% in 2025 compared to 2024. For 2025 full year, the go-forward portfolio centers NOI increased 1.8% compared to 2024.

Turning to the balance sheet, we continue to make strong progress on the balance sheet initiatives contained in our path forward plan. 2025 was an incredibly productive year by the team with transaction and financing activities. We have now closed on approximately $1,300,000,000 in dispositions, reduced leverage by a full turn lower, and addressed each of our 2025 debt maturities as well as a substantial portion of our 2026 debt maturities. Earlier this month, we closed on a four-year loan extension through November 2029 on our South Plains property. This $200,000,000 loan extension was completed at the existing interest rate of approximately 4.2%.

Continuing to proactively address our remaining 2026 debt maturities through a combination of potential asset sales, refinancings, loan modifications, or, if necessary, property givebacks. With respect to our 29th Street property, this $76,000,000 loan at the company's pro rata share is now in default after its recent maturity date. As we are currently in discussions with the lender on the terms of this loan, we do not have any additional commentary at this time. We currently have approximately $990,000,000 in liquidity, including $650,000,000 of capacity on our revolving line of credit.

From a leverage perspective, net debt to EBITDA at the end of the fourth quarter was 7.78 times, which is a full turn lower than at the outset of the path forward plan, and importantly, we have outlined our strategy to further reduce leverage to the low to mid-six times range over the next couple of years. We are making substantial progress in executing on dispositions as part of the path forward plan. As previously announced, during the third quarter, we closed on the sale of three retail centers for $425,000,000.

During the fourth quarter, we closed on the sale of various outparcels and land for $42,000,000, which included the sale of the retail strip center at Washington Square for $26,000,000. Year to date, we have closed on the sale of an additional outparcel and land for $15,000,000. These sales transactions are consistent with our stated disposition plan to improve the balance sheet and refine the portfolio. We have identified a clear path to achieving our $2,000,000,000 disposition target. To date, we have again completed approximately $1,300,000,000 in total dispositions, and the disclosure we have provided in our supplement includes a summary of these asset dispositions.

We have also identified several additional EDI assets totaling $200,000,000 to $300,000,000 for sale or giveback over the next year or so, which would increase total dispositions to the $1,500,000,000 to $1,600,000,000 range. One of these assets is La Cumbre Plaza, which is now under contract for approximately $11,000,000. This asset is unencumbered. The ongoing sales of certain outparcels and land represent the remaining $400,000,000 to $450,000,000 of dispositions to achieve our total $2,000,000,000 disposition target. We currently have approximately $15,000,000 in additional outparcel and land sales under contract for sale, and over $50,000,000 in various stages of negotiation. We will provide further updates on our disposition activities as we progress through the year.

In conclusion, we are making great progress on our path forward plan objectives to reduce leverage, refine the portfolio, and strengthen the balance sheet. With that, we will turn the call over to the operator.

Operator: Thank you. As a reminder, to ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. We ask that you please limit to one question and one follow-up. The first question comes from Vince James Tibone with Green Street. Line is now open.

Vince James Tibone: Hi. Good afternoon. You mentioned that you continue to evaluate acquisition opportunities. Could you just discuss kind of what types of properties would be most likely acquisition candidates for The Macerich Company over the near term? Like, are you looking for more value-add deals like Crabtree where it can be, you know, immediately earnings accretive as well? Or would you consider, you know, stabilized, higher-quality centers that would have lower cap rates, probably, you know, seven or lower? Just to add to the value of the portfolio. Curious how you are thinking about, you know, just the acquisition land and most likely acquisition opportunities near term?

Jackson Hsieh: Thanks, Vince. Thanks for joining the call. I would say the primary focus is obviously to make sure that if we do an acquisition, it is accretive to our 2028 FFO plans and targets. So that is first and foremost. Second is that we believe that it fits within the portfolio metrics of our current portfolio and ranks with or ranks well within it. I would say at least the short to medium term it probably looks like more value-add kinds of opportunities that we are focused on. You know, Crabtree is a great example because it is really a releasing or a lease-up value-add opportunity versus what I call redevelopment opportunity.

I would say with our current cost of capital, you know, to chase stabilized, you know, call it, seven and below kinds of yield assets, we are not likely to do it on our own. It might be different if we had a capital partner, but for now, you know, we are principally going to focus on, you know, those value-add lease-up opportunities. And just to note, you know, we brought on David Keane. He joined a couple weeks ago. He was formerly at Washington Prime Group and spent many years over at General Growth Properties in the acquisition area, and we are excited to have David.

He is already participated in our property review quarterly process, and he was at our board meeting recently, and is actually touring assets as we speak.

Vince James Tibone: That is all helpful color on the acquisition side. Just on, if you, you know, were to find a deal, let us say, size to Crabtree, is it fair to assume you would issue equity, or would you potentially ramp dispositions beyond the $2,000,000,000 to make it leverage neutral? Just how would you, what would be the most likely funding source if you were to, you know, find a sizable deal that you wanted to move forward with?

Jackson Hsieh: I mean, I would say, you know, selling properties to buy properties, you know, I think there we have gotten more, candidly, more inbound interest from capital partners to do transactions with on the acquisition side. You know, one thing we said is we want to simplify the business, so I think first choice would be issue equity if it made sense from a cost of capital standpoint. You know, obviously, we cannot predict where our stock price will be, but probably that is our first preference.

Second would be, you know, find a capital partner that sees the asset and the strategy in the same way we do, and I would say a very distant third would be recycling a property that we had to kind of bring that in.

Operator: Thank you. And our next question will come from Samir Khanal with Bank of America Securities. Line is open.

Andrew Reale: Good afternoon. This is Andrew Reale on for Samir. Thanks for taking our questions. Seems like there is a lot of tailwind from this leasing momentum. So just given the strength of your leasing pipeline now, how should we start to think about the magnitude and timing of a growth inflection in the second half and even into 2027 at this point?

Daniel E. Swanstrom: Yeah. Hey, Andrew. As, you know, as we have talked about, and Jack kind of outlined our, you know, our SNO pipeline, which, you know, has $30,000,000 of estimated contribution in 2026. I would note that is back-end weighted in 2026, consistent with how we have talked about the second half inflection point. But I think the real power of the SNO pipeline you can see in 2027 and 2028 in terms of the dollar numbers that are coming through in those years, $40 to $45,000,000 in 2027, $45 to $50,000,000 in 2028. So that kind of lines up with the inflection point from a growth perspective.

Jackson Hsieh: Okay. Thanks.

Andrew Reale: And then just as a follow-up, it seems like, you know, holiday season was pretty strong. Could you just speak to the overall health of the consumer? If performance has been consistent across the portfolio or if there is some bifurcation between the top and bottom of the quality spectrum? Thanks.

Jackson Hsieh: Yeah. I would say, like, you know, if you think about our customer, you know, we are definitely experiencing this paycheck-to-paycheck consumer. Let us say if you think about some of the retail green shoots that some of our tenants are talking about, obviously, calendar year, we are going to have a higher tax refund going through to people in this country. We have got the World Cup coming, which obviously will draw a lot more customer visitation to the U.S.

You know, Summer Olympics in 2028, and, actually, you know, the kind of issue that Saks is going through, you know, I think is kind of an interesting opportunity as it relates to Macy’s, Nordstrom, Dillard’s being able to really relook at how they are thinking about luxury items as well as just luxury demand, you know, in general. As it relates to that upper portion of the K that we are primarily focused on, I think in a lot of our tenancy on the in-line, you know, if you look at our traffic for a go-forward portfolio in 2025, you know, it was, it was up, you know, in the mid 1.5% range.

But if you, actually I am sorry. Traffic was up, like, just flat, basically up 20 basis points. But in-line sales were up 1.5%. But if you actually go down and look at luxury, the luxury sales were up almost 5.5%. So to me, I think that is a kind of early compelling sign of maybe what might be more coming in the future. And, look, I think we spent, I have spent a lot of time with retailers, which is kind of new for me, but, you know, they are very focused. They know consumers are spending, but super selectively. They acknowledge this bifurcated economy with their different income tiers.

But the one thing that is really consistent: branding, fit, merchandising, innovation. That is a consistent theme that we hear from our retailer customers. You know, promotional items are really being more targeted. And I would say overall that their outlook is cautious but constructive, and we are seeing that in our leasing. There is real demand for space right now that we have remaining. The thing that strikes me, what is so interesting, is, you know, the retail store, physical store, is still the most profitable lane for these retailers right now.

They have omnichannel, but their physical stores are their most profitable areas and lines of business, and the fact that we have no real new supply in the kinds of real estate assets that we compete in, I think, is good for what we are trying to do right now.

Operator: Thank you. And our next question will come from Michael Griffin with Evercore.

Michael Griffin: Great. Thanks so much for taking the question. Just on the leasing pipeline, with 2026 de-risked as much as it is, have you started maybe being able to actively maybe not renew a certain amount of space in hopes of capturing higher rents? It just seems like what feels like a lot more leverage that you might have on the leasing front. Just curious how you break down kind of the cost benefit between, you know, renewing a tenant, keeping them in place versus, you know, actively taking that space back and trying to release it at a higher rate.

Jackson Hsieh: That is a great question. I would say, overall, when we set up this plan, we have 1,000 new leases. You know, we had pro forma market rents in there that are very specific to each space of these 1,000 that we talk about. And on the renewals, we pro forma positive spreads on those as well. Right? So you have two levers trying to happen at the same time. You know, for us, and I would say, like, the unfortunate thing is, you know, we have set a target out there in 2028.

Time is kind of not our friend, and while we might be able to get more, if we start to lose time, you know, we might get more, but it will come in, you know, through 2028. So we are trying to balance what we can get done today based on the pro formas that we have run, you know, to back up this path forward plan versus trying to extract the very last dollar that is possible.

I think your question is a really good one because I think we have not really talked about what happens after 2028, but if you think of the amount of investment that we are putting into these centers, the 30 anchors, when we start to really look at renewals, you know, from 2028, 2029, 2030, I think there is tremendous opportunity that we will see that we have never really been able to see, say, over the last several years, just given how fully leased up these in-line levels will be relative to historical standards.

Michael Griffin: That is certainly some helpful context. And then maybe just one on external growth. You talked about acquisition potential opportunities earlier. But I am curious if you have evaluated maybe other revenue streams, whether it is bridge lending, mezz financing, third-party management? Just are there other levers you think you can pull sort of on the revenue growth side, maybe outside of those potential external growth opportunities as it relates to acquisitions?

Jackson Hsieh: It is a great question because one thing that I love about this business is there are very few people that can do it, you know, in terms of being able to do it in scale on a national basis. And while it would be tempting to look at that, and clearly, I have thought about it, I feel like, really staying focused on what we are trying to do right now, which is a lot, actually, and trying to incrementally add quality acquisitions into the company, I think, is at least for the near term going to be where we are really focused.

You know, we do have opportunity to do mezz and other structure because financing is very unique for this kind of asset base. I think, like I said, in the short term, we will stay focused on the pillars of the plan, which is right there in front of us for this year.

Operator: Thank you. And our next question will come from Floris Van Dijkum with Ladenburg. Your line is now open.

Floris Van Dijkum: Excuse me. Is that better? Thank you for taking my question. I wanted to ask about the go-forward portfolio. Obviously, higher sales, better occupancy. Presumably, these are the assets you are going to be spending your capital on. Could you maybe just give us a little bit more information? What percentage of total NOI does that portfolio represent today?

Daniel E. Swanstrom: Yeah. Hey, Floris. This is Dan. I will refer you guys over to our supplement. If you kind of look at page seven, we have got NOI go-forward portfolio. For the full year 2025, it was $738,000,000 relative to NOI for all the centers of $841,000,000. So obviously, it represents a substantial majority and trending towards just the go-forward amounts.

Floris Van Dijkum: Thanks. The other question is regarding your SNO pipeline. Maybe if you can give us a little bit more details, what percentage of, you know, the actual percentage of your square footage does that represent? And maybe also, maybe a little bit more information on what percentage of that $107,000,000, which is, again, ahead of estimates, represents luxury. Jack, you mentioned luxury being, you know, having 5.5% sales growth. How much, you know, expansion do you foresee in your portfolio from that particular segment?

Brad Miller: I could start with the part of the $107,000,000. It is not a large part. It is a large—this is Brad, by the way. I mean, luxury is relatively a small part of our business at, you know, a little bit and mostly at Scottsdale and a little bit at Foothill Ranch.

Douglas J. Healey: Yeah. Brad, I agree. It is Doug, Floris. Our luxury really is in Scottsdale. It started in the Neiman Marcus wing, as you know, and given the demand we had once we finished the Neiman Marcus wing, we transitioned over to Nordstrom and that into a luxury wing. And at this point, we are basically done. I think we are 90% to 91% committed, and most of those luxury retailers have already gone through the pipeline. If you think about Tiffany, who has opened, and Hermès that has opened, and Celine that has opened. There are very few left to open. They will open the rest of this year and then a few into 2027.

So the luxury component is going to be probably a small percentage of the pipeline.

Jackson Hsieh: And I think, Floris, you know, you were asking about, you know, SNO. And so if you think about the SNO, that includes anchor stores and in-line. And I do not know if I am answering your question the right way, but at least, like, how I was thinking about it was, you know, we refer to 1,000 in-line. We have about, that is about 20% to 25% of the entire in-line population of our go-forward portfolio. So if you think about just sheer numbers, we are effectively influencing about 25% of our in-line floor plan. Then you think about the 30 anchors.

You know, we are going to be able to do better leasing on the in-line as well as those 30 will drive traffic and also rent. And to me, like, and then if you look at the remaining 1,600,000 square feet that we talked about of new leases, the 350, you know, uncommitted spaces. Ninety percent of that space, so 90% of that SNO, is in A, B, and C rated spaces. And another way to look at it is about two-thirds of it are in our fortress and fortress potential property. So these are not bad spaces that are left or rough spaces. These are high-quality spaces in our best centers.

So we are confident that we are going to get the rate. We are just trying to make sure we get the right tenant in there that is going to do the right thing for the center. And, you know, just stepping back, you know, why are we doing all this stuff? You know, we are seeing, I said, anecdotal evidence. When we opened Scheels down at Chandler Center in Arizona, Scheels generated about a 21% increase in surge in the mall traffic and has continued to really be robust in that market. There is over $150,000,000 in sales.

And if you walk with our leasing team in that wing, the before and after is quite tremendous in terms of how we are reimagining and re-leasing that wing. You know, at Tysons, as strong as Tysons is, in the fourth quarter traffic was up 16% year over year because Level99 opened, Skims opened, Bizarre relocation happened, Aritzia opened, Reformation and Mejuri were all opened. So it had an impact to the center, but we also have the entire west side of the property that have two major—one major restaurant and one very proven restaurant food retailer that will drive tremendous traffic. I cannot disclose the name yet.

And so as we continue to add these stores and units in on the north side, it is just going to have unprecedented ability to move traffic up. And then finally, Doug talked about Freehold. Freehold, right, that House of Sport, this represents about 18% of mall traffic since it has opened. And so we are super excited. January is off to a great start over the comp set. So more to come as we experience, like, these new anchors opening, new concepts, new remerchandising happening, you know, in these centers. And so that is what is getting a lot of our customers excited on the retail front. Something is on the leasing.

Brad Miller: Thank you.

Operator: And the next question will come from Haendel St. Juste with Mizuho. Your line is open.

Haendel St. Juste: Hey, guys. Thanks for taking the question. Two quick ones from me here. First, I guess, I appreciate the color on the asset sales to date and the discussions you have underway. Looks like you have, I think, $60,000,000 of the remaining $400 to $500,000,000 remaining disposals under some level of discussion, but it also seems like we have been plus or minus at the same levels for a little while now, a couple quarters. So I am curious what is taking so long, and what is your expectation for some movement in the disposals left to be done over the next year. Thanks.

Daniel E. Swanstrom: Yeah. Hey, Haendel. This is Dan. I will start, and then Jack can chime in. Appreciate the question. On the malls, we have got $200 to $300,000,000 of remaining asset sales, and the timeline of that is, you know, in some part a function of the maturities. We have some coming up this year, and there are some others coming up later in the year. On the outparcel and land side, recall that we have said in the past, you know, from the beginning, we said that the sales in this bucket were going to be weighted towards 2026 versus 2025.

And that is primarily because many of these assets have some encumbrances, whether they are part of a loan collateral, so we have to work with the lender to kind of unencumber them from that. On the land, in some instances, there is some zoning and entitlements that are in the final stages that from a maximizing value to the company and shareholders, we would rather wait a quarter or two to get to maximize that value entitlement in hand. So there is kind of a story to a lot of these outparcels. They are not just sitting there ready to sell.

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It is just us working the process and continuing to get as many of those sold or under contract by the end of this year. There is no impact that we are seeing whatsoever as it relates to pricing or appetite in the market for these assets. It is just time to work through the sales.

Haendel St. Juste: Okay. I appreciate that. One more for me. You know, thinking about, you know, certainly seems like you are shifting a bit, focused more on external. You talked about, I was curious about, you know, the infrastructure, the resources of the platform you have in hand. So as part of this growth, one, part that you have made enough progress with your leasing and disposals and now looking to be opportunistic because the platform can operate and be more efficient with more assets. And so curious kind of about the size, the efficiencies of the platform.

And then curious how you are thinking about AI as you look about at your business and what potential efficiencies you can leverage that to garner. Thanks.

Jackson Hsieh: Yeah. Thanks, Haendel. So on the new opportunity side, I think some of it is just a function of the market is reopening. I think the addressable market for mall opportunities is getting a little bit bigger than, say, it was last time this year. So that is kind of compelling, and we like sort of where these yields are, at least what we are seeing right now. As it relates with our platform, you know, if you remember my comments a year ago this time, I talked a lot about process improvement committees and introduction of dashboards and efficiencies in terms of being able to create more operating efficiency just with the way our teams are communicating.

The new CRM that is in place. So I would say, like, we are able to easily scale, given our current infrastructure, with more GLA. The question we are trying to balance right now is finding opportunities that enhance that 2028 FFO range that we have talked about, but also fit well with what I think our strengths are.

Haendel St. Juste: Internally.

Jackson Hsieh: So I do not think you will see us do heavy redevelopment as our next opportunity. We are very, very good at leasing. We are very, very good at credibility with retailers, like what we are experiencing out of Crabtree, and so, to me, those are more easy putts, short putts. You know, I think assets that have a more deeper value-add, I think we will look at those very diligently and carefully to see if that fits with our strategy. But I would say, like, when I think about one year ago versus today, organizationally, the organization has really advanced quite amazingly.

If you were sitting in here from a technological standpoint, operational standpoint, process standpoint, communication standpoint, decision-making standpoint. And that is not really AI. That is just human beings and Microsoft BI and different things like that. As it relates to AI for us, because I have asked that question of, you know, for our retailers, you know, how are you all thinking about AI? And you listen to Walmart. Look, selling large volumes penny matters for them, and so AI will definitely, I think, influence what they do.

But if you think about what we do, you know, apparel companies, you know, customers that are constantly looking for innovation and fashion and things like that, I think AI is still, I think if you were to ask retailers that would primarily focus in our centers, they are still trying to understand how it can really leverage their system. I think when you look at mass retailers, like Walmart, I think it is a different circumstance given what they do in terms of scale. And falling back to what we do, you know, I think it is still early days for us, to be honest with you.

I am trying myself to get more up to speed to think about how it can influence us, but we have so much learning through just doing the basics here, executing to add value. But I think, you know, the coming next couple years, we will really look and see how it can help us.

Haendel St. Juste: Thank you.

Operator: And the next question will come from Todd Thomas with KeyBanc Capital. Your line is open.

Todd Thomas: Yeah. Hi. Thanks. First question on the South Plains refi. I appreciate the detail there, and apologies if I missed it. But was there any consideration related to the extension there, and the decrease in the coupon from 7.97% to 4.22%? Or is that decrease pretty straightforward as far as the impact on the P&L, and it will result in, you know, nearly 400 basis points of savings?

Daniel E. Swanstrom: Yes. Hey, Todd, this is Dan. I would just clarify the higher rate that you are referring to represented the effective interest rate, right? So when we bought out our JV interest in South Plains, there was a debt mark-to-market, and so that kind of flowed through the effective interest rate, which was higher. The coupon remains the same at 4.2%. So going forward, what we would not have is that debt mark-to-market amortization as an additional cost. It will just be kind of the coupon.

Todd Thomas: Okay. Got it. That is helpful. And then I just wanted to follow up on the outparcel and land sale opportunity. You previously talked about a 7% to 8% cap rate on those deals, you know, ex land. And I realize, you mentioned some of those assets are, you know, collateral for loans and/or there are some other things that, you know, may need to happen for those outparcel and freestanding transactions to move forward and take place. But has the market changed at all in recent quarters around pricing? Is there any change to that 7% to 8% cap rate target?

Daniel E. Swanstrom: No. We are still tracking towards that. We have had a number of these outparcel, some smaller deals, that have been sub-7% cap. This most recent transaction with the retail strip center at Washington Square was done right in that 7% range. If anything, we are probably tracking, you know, maybe slightly ahead, but generally expect this will be in that 7% to 8% range for the outparcel components of the program.

Operator: Thank you. And our next question will come from Ronald Kamdem with Morgan Stanley. Your line is open.

Ronald Kamdem: Great. Just two quick ones. So looking at the go-forward portfolio NOI, without lease termination income, that sort of 1.7% year-over-year number. Just wondering if we could just dig into in terms of whether it is some of the closures that we have this year, whether it is some of the proactively taking back space and converting to better tenants. Just, you know, how much do you think of that, what is the magnitude of the impact on that year-over-year number just so we get a sense of what, you know, what the growth rate could be as those things sort of go away.

Daniel E. Swanstrom: Yeah. Hey, Ronald. And again, 2025 was a transitional year. As we have discussed, we had frictional downtime as we are on all of our tenant and strategy initiatives. Just to give you a flavor of how we were impacted by Forever 21 year over year, which had a high percentage rent contribution in 2024. You know, excluding Forever 21, that would have been 2.7% for the fourth quarter and closer to 2.5% for the year. So that just gives you a sense for 2025. You know, and going forward, I know we have talked about this in the past, but, you know, I will refer you back to our path forward plan update that we put out last summer.

You know, in there, we had an NOI bridge that assumed a midpoint CAGR of 5.2% for the go-forward portfolio for the four-year period of 2025 through 2028. Obviously, in 2025, you can see we landed at 1.8%. Obviously, that implies, you know, significant growth in the future. For 2026, you know, we think we will be at least 3%, back-end weighted. But when you look at that in the context of 2027 and 2028, you can see that, obviously, that implies a significant increase above that kind of 5.2% CAGR levels in those years.

Ronald Kamdem: Really helpful color. Just the, you know, the second one, and, you know, appreciate that we will get an update midyear and guidance in 2027. Just can you talk about, just, I think you said there was an inflection point happening midyear around this time. A lot of that is related to the leasing and so forth. But just organizationally, is there sort of any other pieces of the plan that you are waiting on for that inflection point, or is it solely tied to the leasing?

Jackson Hsieh: No. I think we are just business as usual. I mean, we have brought in someone to focus on and lead our acquisition effort, so it is kind of a new, that is going to create a new—I am sure there are a lot of people who will be busy as we are sort of evaluating different opportunities, but I would say we are operating—try to exclude this new thing that should have.

Operator: Thank you. And our next question will come from Craig Mailman with Citi. Your line is open.

Craig Mailman: Just the first question I have on the equity and income. You guys had a pretty big pickup sequentially, and a lot of that seemed to be from other. Could you just tell us what that is and if that is sustainable or more seasonal?

Daniel E. Swanstrom: Yeah. Hey, Craig. You know, a big piece of that—sorry. Just so I know, like, are you referring—what periods are you exactly referring to?

Craig Mailman: 4Q over 3Q. So you guys, you know, just looking through the supplemental, you know, 4Q, you guys had $27.5 million versus $9.7 last quarter. And other income was $25,000,000, up big sequentially.

Daniel E. Swanstrom: Okay. Yeah. That is helpful to clarify. I just want to make sure I was addressing your question. It is really driven, you know, in the fourth quarter of this year, as I alluded to in my prepared remarks, we had a legal settlement income, which was about $16,000,000 in 2025. So that is really driving the lion's share of that increase from 2024.

Craig Mailman: Great. Sorry, missed that in your prepared remarks. And then just a second question. I know it is a little bit early here, but Jack, any early insights into maybe what the evolution of the path forward plan could be in version 3.0? Like, what are the big items we should be expecting?

Jackson Hsieh: Yeah. Alright. Look. When I look at, as I said in my remarks, in terms of things that we are focused on, you know, obviously, acquisition, dispositions. We will give you an update of, I think by our leasing speedometer, I think we will give a very good update a little over the year. One thing we have not talked about in detail, which I think we will start to talk about, is rent commencement dates. It is a huge issue at our company in terms of tenant coordination, legal, asset management, also with leasing. You know, trying to get these spaces on time, tenant in place, rent commencing.

And so it is a big workstream that you all do not see and we have not put any disclosure out there, but I believe that we will be less talking about new leasing and more about RCD, what we call RCD, rent commencement date. So I think that is going to be something that you will see in the middle of the year. My guess is, you know, we will be tightening down our 2028 ranges of what we put out there and keep looking at the analyst when we talk about 2029 at that point, possibly, because we see we can forecast out from there what is happening here.

And I guess, you know, just continued updates on our development, you know, three development projects. But I think RCD, you know, rent commencement dates, should provide more insight into that. It will be something we will talk about middle of the year.

Operator: Thank you. And our next question will come from Greg McGinniss with Scotiabank. Your line is open.

Greg McGinniss: Hey. I just wanted to touch on the couple remaining non-go-forward assets. With 29th Street not in that portfolio and in negotiations with lenders, is the expectation to hand that asset back, or do you believe that there is kind of equity value to extract thereafter negotiations? And then what is the plan on Fashion Outlets Niagara? Is that an expected handback?

Daniel E. Swanstrom: Yeah. I appreciate the question. I think, you know, at this point, you know, I just gave you the sort of latest state of play on 29th Street. Probably no additional commentary at this point. We will obviously give you guys updates as we have relevant news to share.

Greg McGinniss: And then on the development side, are Green Acres and Scottsdale projects fully leased? What percent of those tenants are expected to open in 2026? And are those leases included in the SNO pipeline?

Brad Miller: Yeah. Hi. It is Brad. I will—yes. They are in the SNO pipeline. So roughly the $107,000,000, roughly about $20,000,000 comes from our development pipeline. Then, Doug, if you want to talk to the leasing aspects.

Douglas J. Healey: Yeah. So, Greg, at Scottsdale, I think I mentioned earlier, we are just about done. We are 91% committed with very few spaces left. And at Green Acres, we are about 75% committed. The majority of the exterior redevelopment is complete, and the work to do right now is on the interior. But good news is we have added some really powerful tenants. We are adding some powerful tenants to Green Acres. If we think about ShopRite grocery, Sephora, The Cheesecake Factory, Shake Shack, Foot Locker, JD Sports. JD Sports is really going to redefine the exterior.

It is going to create a new grand entrance, and the hope is, the plan is that it all funnels into the inside, and that is what we are starting to see today.

Operator: Thank you. And the next question will come from Omotayo Tejumade Okusanya with Deutsche Bank. Your line is open.

Omotayo Tejumade Okusanya: Yes. Good evening, everyone. While you guys do not have, you know, any RealReal, Express, or Francesca’s exposure, could you just talk a little bit about kind of what you are seeing out there in terms of just tenant credit in general? And whether, you know, as you kind of think about 2026, whether that is kind of more or less of a risk for you guys.

Daniel E. Swanstrom: Yes. Hey, thanks for the question. Certainly, issues are in the news. For us, I think the summary is we do not expect a meaningful impact from this group, you know, as it relates to 2026, and I do not think they are reflective of the overall strong retailer environment that we are seeing across the board that Doug alluded to at our centers. You know, our watch list remains at an all-time low, and none of those centers would impact kind of how we are thinking about our 2026 bad debt expectations for the portfolio.

Operator: And our next question will come from Alexander Goldfarb with Piper Sandler. Your line is—

Alexander Goldfarb: Hey. Thank you. And Alexandra, so two questions. First, Jackson, you have obviously, you hired a CIO, and you have been doing a lot of work on the portfolio. Just curious with how the debt markets have improved and how you are looking at dispositions, do you think part of The Macerich Company may now be in a position where, you know, the unencumbered or wholly owned assets could start to be part of the mix? Do you think the company is there yet? Or, you know, with everything that you are doing right now, you just do not see, you know, the asset sales and capital markets quite there enough to start down that process?

Daniel E. Swanstrom: You are talking about, like, unencumbered, like, an investment-grade rating or something like that?

Alexander Goldfarb: Not investment grade, but just start to create, like, a pool of unencumbered assets.

Jackson Hsieh: I mean, that is—if you think about, like, Crabtree, I mean, we kind of pursued it. It is a term loan, but it is not a—

Daniel E. Swanstrom: Yeah. Alexander, I am just saying, you know, we have, you know, we have paid off the debt on FlatIron Crossing. You know, Crabtree has got a term loan that is highly flexible. It gives us some maturity, but it gives us, you know, an ability to prepay it. So I do not think it is, you know, an immediate near-term priority, but maybe more medium-term to aspirational to start to increase our wholly owned assets more in unencumbered.

Alexander Goldfarb: Okay. And then as far as the legal settlement goes, can you give a little bit more color on what drove it? And is this like a one-off? Or is there potential that there are other of these one-time benefits that you guys may be able to harvest?

Daniel E. Swanstrom: Sure. Appreciate the question. Yeah. It relates to a former development project that we are no longer pursuing that resulted in a favorable settlement outcome. It is a nonrecurring item in other income, as I mentioned, and it is not part of the go-forward portfolio.

Operator: Thank you. And our next question will come from Michael Mueller with JPMorgan. Your line is open.

Michael Mueller: Yes, hi. Can you comment on what rent spreads have been on the 2026 leases that you have addressed so far? And for the second question, are you seeing any uplift in shop leasing F escalators compared to a couple of years ago?

Jackson Hsieh: Okay. On the rent spreads, you know, first, you know, the way we have historically talked about rent spreads—and obviously, you saw it, over 6% for this group—it is really not correlated to the success of our path forward plan. Our path forward plan, if you think about it, we have a set number of new spaces that we are focused on leasing that have market rents tied to them, TI assumptions tied to them. So achieving in excess of that, you know, more rent, less TI, is good for us because all this will sort of result in increased permanent occupancy, more productivity.

I do not like the measure because it, and then we are also renewing a really large volume of renewals, and I do not think it really correlates to what we are really trying to do. It probably gives you the wrong impression, or not the right impression. So we are evaluating that metric. I do not believe it really works right now for us in terms of the success of our plan, so we are going to try to see if there is a better way to do it.

Douglas J. Healey: And, Michael, it is Doug. I think you asked about escalators. There really has been no change. We have been consistent over the years, and we remain consistent. The escalators, when you blend the escalators for fixed minimum rent and CAM, you are somewhere in that 3% to 4% range.

Michael Mueller: Okay. Thank you.

Operator: Thank you. And our last will come from Caitlin Burrows with Goldman Sachs. Your line is open.

Caitlin Burrows: Hi. Maybe two more on the occupancy front. As a follow-up to Floris' SNO question from earlier, I guess, maybe phrasing it a different way, you guys reported the 94.9% lease rate. Could you tell us what your economic occupancy is for the go-forward portfolio?

Brad Miller: Yes. Hey, Caitlin. It is Brad Miller here. Yeah. So we are at 94.9% on the leased occupancy. Our physical occupancy is closer to 91%.

Caitlin Burrows: Thank you.

Operator: I would now like to turn the call back over to Jackson Hsieh for closing remarks.

Jackson Hsieh: Thank you, operator. Thanks again for your participation today. We look forward to seeing many of you at the conferences and property tours in the coming weeks. Thank you.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.

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