After navigating almost two full years battling the impact of COVID, The Macerich Co.'s Q3 numbers were "outstanding" thanks to retailer demand. That is according to CEO Tom O'Hern, on the REIT's Q3 earnings call. O'Hern noted that shoppers have come roaring back as US consumers are continuing to shop with a purpose.
"We see a higher capture rate than pre-COVID," he said, adding that sales are exceeding pre-COVID levels with double-digit gains in the past two quarters compared to 2019. And that momentum, he said, is carrying into the fourth quarter. "Retailer demand is at a level we have not seen since 2015."
He also expects traffic to continue to increase. "The current level is over 95% of the 2019 traffic levels," he said. Some of the second quarter highlights include: on a sequential quarter basis, the REIT had occupancy gains of 90 basis points, and that's on top of the 90 basis point gain it had in the second quarter. At quarter end, occupancy was at 90.3%.
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"We have a ways to go there, but we're making great progress," O'Hern explained. "We saw robust leasing volumes for the quarter and year to date, both were in excess of 2019 levels."
Year to date, the REIT has executed leases for over 3 million square feet of space, and that compares very favorable to full year 2019 level of 3.3 million square feet, and the full year 2015 level of 3.4 million square feet, he said. Once the REIT includes the fourth quarter, its full year 2021 leasing volumes will exceed not only 2019 but the prior high of 2015.
He also explained that the company saw same-center NOI growth of 21% in the quarter and expects the fourth quarter to continue with the double-digit growth they have seen in the past two quarters. "We're obviously optimistic about the fourth quarter as we raised the FFO guided midpoint range to $1.96, a 3% increase on top of the increase in guidance last quarter. The depth and breadth of the leasing demand has us very optimistic about the future."
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
