The Macerich Company MAC announced that following the relaxation of the coronavirus outbreak-led restrictions in New York City and across most of California, it has reopened two major retail properties and six indoor shopping centers in respective regions. With this, 44 of its 47 major retail properties are fully open for business nationwide.
Specifically, New York City-based malls with proper high-quality air filtration systems were given the green signal to reopen from Sep 9 at 50% occupancy, according to a CNBC article.
This facilitated the resumption of operations at two of Macerich’s properties at New York City — Kings Plaza in Brooklyn and Queens Center in Queens — that were closed since March 2020.
Moreover, on Sep 9, the company welcomed shoppers at six indoor California shopping centers, including Fashion Fair in Fresno, Inland Center in San Bernardino, Pacific View in Ventura, The Mall at Victor Valley in Victorville, The Oaks in Thousand Oaks and Vintage Faire Mall in Modesto.
However, doors at three malls, including Lakewood Center, Los Cerritos Center, Stonewood Mall remained shut. Notably, the California malls, which were closed in March, were reopened in May and early June 2020 only to be closed for a second time in July 2020 in line with a statewide mandate.
Notably, the mall landlord has been taking sufficient precautions like enhanced cleaning and sanitizing, social distance queuing, and superior-quality HVAC systems to be in compliance with state and local requirements. This along with large property sizes provides ample scope to implement effective social distancing and has facilitated the company to reopen its properties safely.
Per management “Our asset locations in California and in New York City represent some of the most powerful consumer markets in the U.S., and we are happy to be connecting retailers and restaurants with their customers in these important communities.”
This resumption of activity is encouraging for Macerich, as it is helping the company’s tenants to generate cash flows from their business and make rent payments, thereby, boosting its collections. In fact, Macerich’s cash on hand, including joint ventures (JVs) at the company’s share, improved from $573 million as of Jun 30 to around $649 million on Aug 31, 2020.
Moreover, the company expects to close a $95-million financing of its unencumbered residential tower, Tysons Vita, in four-quarter 2020 at an estimated fixed interest rate of 3.30%. The property is situated adjacent to Tysons Corner Center is owned by a JV in which the company owns a 50% stake.
However, it has been witnessing higher volumes of tenant bankruptcies and these are expected to weigh on Macerich’s operating results. Moreover, the coronavirus pandemic is likely to keep retail REITs on tenterhooks with dwindling footfall in the properties amid social-distancing mandates and higher e-commerce adoption.
Shares of this Zacks Rank #4 (Sell) company has plunged 77.2% compared with its industry’s decline of 22% over the past year.
Stocks to Consider
Agree Realty Corporation’s ADC Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has been unchanged at $3.18 over the past month. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alpine Income Property Trust, Inc.’s PINE FFO per share estimates for 2020 have been revised 8.6% upward to $1.13 over the past 30 days. It currently carries a Zacks Rank of 2.
Sabra Healthcare REIT, Inc.’s SBRA FFO per share estimates for the ongoing year have been revised 4.9% upward to $1.72 over the past month. The company currently carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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