You always learn something interesting during analyst calls. Case in point: Last year, showrooming was a dirty word for retailers, particularly electronics chains that really, really wanted shoppers to purchase items in store rather than play with them and then order them online from someone else.
The Macerich Co., however, thinks it's a great source of new tenants.
"Retailers [such as] Microsoft, Samsung, Sony, Tesla and car dealerships that want to use showrooms in our malls is an emerging category that just proves the strength of brick-and-mortar locations," said Art Coppola, CEO of Santa Monica, CA-based Macerich at the company's fourth-quarter conference call. "The best e-tailers are also the best retailers."
Macerich reported that FFO per share rose 10 percent for the full year over 2012. The company ended the year with occupancy of 94.6%, an increase of 80 basis points over the end of 2012. More significant, said CFO Tom O'Hern, temporary occupancy declined to 5.8% from 6.9% a year ago.
Sales per square foot rose to $562, an 8.7% increase over the previous year. Of course that's not all that surprising when the company sold 10 malls that had averaged sales of $340 per square foot. And Macerich is in talks to sell "four or five" weaker projects, averaging sales of $250 per square foot to $300 per square foot, Coppola noted. When those are complete, expected to be sometime this year, the disposition phase is done, he added.
Also disposing of centers is Chattanooga-based CBL & Associates Properties, which is focusing on selling properties with sales under $300 per square foot, said Stephen Lebovitz, president and CEO at its Q4 conference call. Three were sold last year, and three more are on the market now.
"By selling them then we are able to have a higher growing portfolio," Lebovitz said. "We are looking at the dispositions not as a way to shrink the company or create dilution, but as a way to provide the proceeds for us to recycle and invest in assets."
The company reported 2013 FFO per share was 2.3% higher than the prior year, with same-center occupancy up 10 basis points to 94.9%. Mall sales per square foot declined 1.1% to $356, attributed in part to the downtime between stores closing and replacements opening, and to the weaker assets that CBL is now trying to sell.
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