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Macerich (MAC) Boosts Flexibility With $650M Credit Facility

The Macerich Company’s MAC recently amended and restated a new $650 million revolving credit facility, replacing its existing $525 million facility that was set to mature on Apr 14, 2024. The move boosts the company’s liquidity position by $125 million and enhances flexibility to capitalize on long-term growth opportunities.

The new facility, maturing on Feb 1, 2028, includes an extension option of a year. Also, the facility bears an interest rate that varies according to a pricing grid ranging from 2.10-2.60% plus a secured overnight financing rate (SOFR), which is based on a company debt yield covenant. The closing interest rate remains unchanged from the SOFR plus 2.35% rate for the existing credit facility.

Macerich’s liquidity now aggregates $660 million, which includes $498 million of availability on its newly expanded credit facility.

Per Scott Kingsmore, senior executive vice president and CFO of Macerich, “We are extremely pleased to secure this new credit facility, especially in today’s turbulent banking market. This new facility provides an important $125 million boost to our liquidity with a fresh 4 1/2 years of extended term.”

This retail real estate investment trust’s (REIT) latest move comes after it announced record leasing volumes of 2.4 million square feet of space signed from the beginning of 2023 through Aug 21. This represented a 34% increase in square footage signed from the prior-year period.

Moreover, it is quite evident that solid retail demand has boosted occupancy levels at the company’s shopping centers post the pandemic. As of the end of the second quarter of 2023, portfolio-wide occupancy was 92.6%, up 410 basis points compared with the pandemic-induced occupancy low of 88.5% as of Mar 31, 2021.

Further, MAC’s encouraging leasing pipeline of new store openings is expected to yield around $66 million of incremental rent in aggregate over 2023, 2024 and 2025. The company also anticipates approving new deals and signing new leases in the upcoming period, especially with those in large formats, aiming to boost traffic and sales at its Regional Town Centers.

Hence, with a portfolio of premium assets in the vibrant markets of the United States, robust retail demand and enhanced financial flexibility, Macerich seems well-poised to ride the growth curve.

Shares of this Zacks Rank #3 (Hold) company have gained 5.4% in the quarter-to-date period against the industry’s decline of 1.7%.

Nonetheless, higher e-commerce adoption and limited consumers’ willingness to spend amid macroeconomic uncertainty and a high-interest rate environment remain key concerns for the company.

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Zacks Investment Research

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Stocks to Consider

Some better-ranked stocks from the retail REIT sector are Phillips Edison & Company PECO, Essential Properties Realty Trust EPRT and Tanger Factory Outlet Centers SKT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Phillips Edison & Company’s current-year FFO per share has been raised marginally in the past two months to $2.32.

The Zacks Consensus Estimate for Essential Properties Realty Trust’s 2023 FFO per share has moved slightly upward in the past month to $1.66.

The Zacks Consensus Estimate for Tanger Factory Outlet Centers’ ongoing year’s FFO per share has been revised marginally northward in the past month to $1.88.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Macerich Company (The) (MAC) : Free Stock Analysis Report

Tanger Factory Outlet Centers, Inc. (SKT) : Free Stock Analysis Report

Essential Properties Realty Trust, Inc. (EPRT) : Free Stock Analysis Report

Phillips Edison & Company, Inc. (PECO) : Free Stock Analysis Report

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