the macerich company

THE MACERICH COMPANY
(NYSE: MAC) an S&P 500 Company
DECEMBER 1, 2013
LEGAL DISCLAIMER
This document contains information constituting forward-looking statements and includes expectations regarding the
Company’s future operational results as well as development, redevelopment and expansion activities. Stockholders are
cautioned that any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties
and other factors that may cause actual results, performance or achievements of the Company to vary materially from those
anticipated, expected or projected. Such factors include, among others, general industry, economic and business conditions,
which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of current and
prospective tenants, anchor or tenant bankruptcies, closures, mergers or consolidations, lease rates, terms and payments,
interest rate fluctuations, availability, terms and cost of financing, operating expenses, and competition; adverse changes in
the real estate markets, including the liquidity of real estate investments; and risks of real estate development,
redevelopment, and expansion, including availability, terms and cost of financing, construction delays, environmental and
safety requirements, budget overruns, sunk costs and lease-up; the inability to obtain, or delays in obtaining, all necessary
zoning, land-use, building, and occupancy and other required governmental permits and authorizations; and governmental
actions and initiatives (including legislative and regulatory changes) as well as terrorist activities or other acts of violence
which could adversely affect all of the above factors. Furthermore, occupancy rates and rents at a newly completed property
may not be sufficient to make the property profitable. The reader is directed to the Company’s various filings with the
Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2012, for
a discussion of such risks and uncertainties, which discussion is incorporated herein by reference. The Company does not
intend, and undertakes no obligation, to update any forward-looking information to reflect events or circumstances after the
date of this document or to reflect the occurrence of unanticipated events unless required by law to do so.
In addition, references may be made to non-GAAP financial results. Investors are encouraged to review these non-GAAP
financial measures, as well as the reconciliation of these measures to the comparable GAAP results included at the end of our
earnings press release financial statements. Copies of our earnings press release containing these reconciliations can be
found in the Investing section of our website at www.macerich.com.
2
THE MACERICH COMPANY
•
Macerich (NYSE: MAC), a real estate investment
trust (“REIT”) was founded in 1972 and had it’s
IPO in March 1994
•
Total market capitalization of nearly $15bn
•
The Company’s primary focus is the ownership,
development, redevelopment and management
of top quality regional malls in the United States
•
In May 2013, Macerich joined the S&P 500 Index
Santa Monica Place – Santa Monica, CA
Queens Center – Elmhurst, NY
Tysons Corner Center – Tysons Corner, VA
3
HIGHLY VISIBLE AND GROWING CORE INCOME
Internal Growth from Solid Fundamentals in the core portfolio
 Irreplaceable Assets in High Barrier to Entry Markets
Financing Activity
 Reducing interest rates, lengthening maturities
Dispositions of Non Core, Slower-Growth Assets
 Driving an improvement in the quality and
growth profile of cash flows
Selective Acquisitions
 High quality, dominant Centers
Developments & Redevelopments
 Accretive to our net asset value
Fashion Outlets of Chicago – Rosemont, Illinois
Grand Opening, August 1, 2013
4
GROWTH FROM QUALITY ASSETS
AND SOLID FUNDAMENTALS
ELEMENTS OF SAME CENTER GROWTH – INCREASING RENTS
 CPI Increases
 Roughly 63% of leases have provisions
for annual consumer price index increases
 Applicable CPI has increased on average
2.6% over the past 10 years
 Releasing Spreads
 Releasing Spreads have averaged over
14% for the past 10 years
 Releasing Spreads are highest in
our best centers
Kierland Commons– Scottsdale, Arizona
Economic Expansion underway in Arizona
 Spreads benefit from sales gains as a result of our coming
off the 2009 trough, as well as the disposition program
5
GROWTH FROM QUALITY ASSETS AND SOLID FUNDAMENTALS
Releasing Spreads remained positive even as sales declined in Years 2008-2009
Portfolio Sales YOY Change
Releasing Spreads
Sales PSF
(a)
$549
28.6%
$517
$489
20.1%
$452
$467
$441
24.0%
$407
$417
$433
18.5%
13.9%
15.4%
13.7%
14.2%
6.8%
6.6%
8.4%
3.3%
6.4%
-5.6%
2005
a)
2006
2007
2008
12.9%
5.7%
7.4%
-7.7%
2009
2010
2011
2012
at 9/30/13
Sales Per Square Foot (“PSF”) are based on reports by retailers leasing mall and freestanding stores for the trailing 12 months for tenants which have occupied
such stores for a minimum of 12 months. Sales PSF are based on tenants 10,000 square feet and under for regional shopping centers.
6
GROWTH FROM QUALITY ASSETS
AND SOLID FUNDAMENTALS
ELEMENTS OF SAME CENTER GROWTH – OCCUPANCY OPPORTUNITIES
 Occupancy improved 90 basis points year
over year from 92.8% at September 2012
to 93.7% at September 2013
 Temporary Tenant Occupancy at
September 30, 2013 was 5.6%,
(vs. 6.7% at September 30, 2012)
over 1.3 million square feet
 In the past four quarters, we have converted
approximately 250,000 square feet from
temporary occupancy to permanent leases
 We will continue to focus on converting
"temps" to permanent leases
Queens Center – Elmhurst, New York
Irreplaceable Assets in High Barrier to Entry Markets
 Potential to grow occupancy 2.0% over
next two years
7
GROWTH FROM QUALITY ASSETS AND SOLID FUNDAMENTALS
Sales PSF & Occupancy – Strong and Improving
Occupancy
93.3%
92.5%
Sales PSF
93.8%
93.1%
92.5%
93.1%
92.3%
93.7%
92.7%
$549
91.3%
$517
$489
$452
$467
$441
$417
$407
$391
2004
2005
$433
2006
2007
2008
2009
2010
Occupancy and Sales PSF exclude Centers under development and redevelopment
2011
2012
Sept.
2013
TTM
8
CONTINUING TO EXECUTE ON BUSINESS PLAN
Recent financing activity
Since January 2012, Macerich has:
 Financed $3.8 billion of debt at MAC’s share ($5.0bn at 100%), with an
average interest rate of 3.46% and an average term of 8.6 years
 Reduced its weighted average portfolio interest rate from 5.00% to 4.28%
 Increased its weighted average portfolio loan maturity from 3 years to 6 years
 Renewed the Company’s Line of Credit at more favorable terms
 Line of Credit currently has zero balance outstanding and $1.5 billion available
9
CONTINUING TO EXECUTE ON BUSINESS PLAN
Recent financing activity
Recent financings include:
 Kings Plaza: November 2012, $500M, 3.44% interest rate, 7 years
 Queens Center: December 2012, $600M, 3.49% interest rate, 12 years
 Santa Monica Place: December 2012, $240M, 2.94% interest rate, 5 years
 Green Acres Mall: January 2013, $325M, 3.43% interest rate, 8 years
 Scottsdale Fashion Square: March 2013, $525M, 3.0% interest rate, 10 years
 Tysons Corner: August 2013, $850M, 4.10% interest rate, 10 years
 FlatIron Crossing: November 2013, $268M, 3.85% interest rate, 7 years
10
DEBT MATURITY SCHEDULE
As of September 30, 2013 Pro Forma*
$1,000
AVERAGE YEARS TO MATURITY - 6.0
$ Millions
$892
$900
FLOATING RATE DEBT = LESS THAN
10% OF TOTAL
$826
$800
$711
$710
$700
$640
$589
$600
$463
$500
$425
$360
$400
$308
$300
$200
$100
$69
$167
$119
$0
Average
Interest
Rate
*
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
5.20%
4.09%
5.83%
5.78%
3.56%
3.13%
3.59%
5.31%
3.72%
4.33%
3.34%
4.13%
3.66%
The chart reflects September 30, 2013 balances, with pro forma adjustments for financing, acquisition and disposition activity through November 8, 2013.
Significant adjustments include:
• Finance of FlatIron Crossing with a loan of $268 million maturing in 2021.
• Pay-off of the Company’s Revolving Line of Credit with excess proceeds from FlatIron Crossing financing.
The average interest rate in the above table includes the debt premiums and discounts and loan financing costs.
11
MACERICH DEBT MATURITIES
2014 through 2016 - Analysis of Interest Savings
Annual Interest Impact @ Pro Rata (w/ incremental capital assumed re-invested @ 8%)
Year of Maturity
(dollars in thousands)
Wtd Average
Interest Rate
of Maturing
Debt
Favorable/(Unfavorable) Interest Expense Impact using 1.75%
spread and following Treasury Rates:
Debt Balance
@ Maturity
Projected Excess $$
Loan
From
Proceeds Financings
3.0%
3.5%
4.0%
4.5%
2014 Maturities
3.85%
118,800
157,500
38,700
185
(603)
(1,390)
(2,178)
2015 Maturities
5.89%
614,471
1,078,021
463,550
22,095
16,705
11,315
5,925
2016 Maturities
5.75%
889,541
1,229,591
340,050
19,907
13,759
7,612
1,464
5.66%
1,622,812
2,465,112
842,300
42,187
29,862
17,536
5,210
Notes:
*All numbers are at MAC's pro rata share
*Interest (savings)/expense calculated includes (savings)/expense resulting from the pay down of the Line of Credit from loan proceeds/pay downs on financings.
12
BALANCE SHEET – STRONG AND IMPROVING
As of September 30, 2013
Total Common and Equivalent Shares Outstanding
150,522,000
Total Equity (Based on $57.30/Share at close 11/25/2013)
$ 8,625,000,000
Total Debt
$ 6,267,000,000
Total Market Capitalization
Annualized Dividend:
Debt to Market Capitalization:
$ 14,892,000,000
$2.48 / Annualized Yield 4.4%
42.1%
Interest Coverage Ratio:
2.9x
Debt/EBITDA (forward):
7.5x
Average interest rate:
Average Debt Maturity as of Sept. 30, 2013:
4.22%
6.0 years
13
STRONG CORE PORTFOLIO
Sales PSF at September 30, 2013
TRADE AREA DEMOGRAPHICS
(a)
Average 2013 Population
Expected Population Growth 2013 – 2018
Average Household Income
Median Age
a)
$549
855,000
4.8%
$80,000
37
Source: 2013 Nielsen Claritas Data. A trade area is defined based on the most recent shopper intercept survey and represents
an area from which a center draws approximately 70% to 80% of its total sales.
14
LEASE EXPIRATION SCHEDULE
Mall Stores and Freestanding Stores under 10,000 Square Feet
Lease expirations are divided fairly evenly over the next ten years
20%
% of Leased GLA
% of Base Rent (pro rata)
10%
0%
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Future
The table above shows scheduled lease expirations for Centers owned as of December 31, 2012 for the next ten years, assuming that none of the
tenants exercise renewal options. Base Rent (pro rata) represents the final year minimum rent, on a cash basis, for tenants expiring during the year.
Roughly 63% of leases have provisions for future consumer price index increases. These future increases are not reflected in ending base rent.
15
THE MACERICH PORTFOLIO
Geographic Diversity
16
THE MACERICH PORTFOLIO
Geographic Diversity
% of NOI by State
Northeast Corridor
31.6%
New Jersey &
Connecticut
9.0%
Virginia
7.1%
Illinois,
Indiana &
Iowa
7.6%
Colorado
5.2%
New York
15.5%
Other
6.7%
Oregon
3.6%
Arizona
17.9%
California
27.4%
17
“2013 DISPOSITIONS”
CONTINUING TO EXECUTE ON BUSINESS PLAN
“2013 DISPOSITIONS”
• Macerich has disposed of eight assets year-to-date 2013 totaling
approximately $560M, generating $466M of equity; assets averaged
$352 Sales PSF vs. Macerich mall portfolio average of $549 Sales PSF
• Macerich is currently under contract to sell four assets totaling
approximately $318M, generating over $90M of equity; assets
averaged $317 Sales PSF
19
2013 DISPOSITION CENTERS
As of December 31, 2012
Property
% of 2012 Portfolio
Pro Rata NOI
Sales Per Square Foot
Occupancy
Fiesta Mall
$235
86.1%
Green Tree Mall
$400
91.2%
Kitsap Mall
$383
92.4%
Northridge Mall
$342
97.2%
Redmond Town Center
$361
89.2%
n/a
99.1%
Ridgmar Mall
$332
84.6%
Rimrock Mall
$424
92.0%
Subtotal
$352
91.7%
Chesterfield Towne Center
$361
91.9%
Salisbury, Centre at
$311
96.3%
Lake Square Mall
$232
86.4%
Somersville Towne Center
$287
84.7%
Subtotal
$317
91.0%
3.1%
Total 2013 Disposition Centers
$341
91.5%
9.4%
Centers Sold through October 8, 2013:
Redmond Town Center Office
6.3%
Centers Currently Under Contract to be Sold:
20
PORTFOLIO PERFORMANCE BY RANKING
Driving an improvement in the quality of the portfolio
As of September 30, 2013
Pro Forma Excluding the 2013
Dispositions
% of Portfolio 2013
Forecast Pro Rata
Net
Operating Income (a)
Sales PSF
Q3 2013
Occupancy
Q3 2013
Pro Forma
% of Portfolio 2013
Forecast Pro Rata
Net
Operating Income (b)
Pro Forma
Sales PSF
Q4 2013
Pro Forma
Occupancy
Q4 2013
Top 10 Centers
(c)
24.8%
$844
94.8%
25.5%
$844
94.8%
Top 40 Centers
(c)
85.0%
$606
95.2%
87.7%
$606
95.2%
97.0%
$549
93.7%
97.0%
$559
94.1%
All Regional Shopping Centers
a) The percentage of portfolio 2013 Forecast Pro Rata Net Operating Income (‘‘NOI’’) is based on guidance previously released adjusted to exclude non-core assets sold in 2013
and to annualize the NOI of Fashion Outlets of Chicago, which opened August 1, 2013. NOI excludes the following items: straight-line rent, above/below market adjustments
to minimum rents and termination fee income. NOI also does not reflect REIT expenses, net Management Company expenses and the effect of any future 2013 acquisitions
or dispositions. See the Company’s forward-looking statements disclosure on page 2 for factors that may affect the information provided in this table.
b) The percentage of portfolio 2013 Forecast NOI has been adjusted to exclude the 2013 Disposition Centers.
c) Centers are ranked by Sales PSF for Year ended December 31, 2012.
21
DRIVING AN IMPROVEMENT IN THE QUALITY
AND GROWTH PROFILE OF CASH FLOWS
 Average Same Center NOI Growth for the “2013 Disposition Centers” over the eight
year period ended December 31, 2012 was approximately -0.8%
 By contrast, Average Same Center NOI Growth for the “Top 40 Centers” (as ranked by
Sales PSF at December 31, 2012) for the same eight year period was approximately 4.0%
Scottsdale Fashion Square – Scottsdale, AZ
Washington Square – Portland, OR
22
RECENT ACQUISITIONS
CONTINUING TO EXECUTE ON BUSINESS PLAN
INVESTMENT ACTIVITY
 Invested $1.7bn in four “A” quality regional malls with an investment-weighted average
of $620 Sales PSF
 Green Acres:
January 2013 – acquired 100% interest for $500M ($546 Sales PSF)
 Kings Plaza:
November 2012 – acquired 100% interest for $756M ($680 Sales PSF)
 Arrowhead Town Center:
October 2012 – acquired 33.3% interest owned by JV partner for $144M ($653 Sales PSF)
 Flatiron Crossing:
October 2012 – acquired 75% interest owned by JV partner for $310M ($534 Sales PSF)
24
RECENT ACQUISITIONS
KINGS PLAZA SHOPPING CENTER
Kings Plaza – Brooklyn, NY
• Kings Plaza is considered one of the most productive
malls in the region and a great addition to Macerich’s
portfolio with sales per square foot of $683 and
occupancy of 95.9% at September 30, 2013. The
purchase price for Kings Plaza was $756.0 million.
The transaction closed on November 28, 2012.
Concurrent financing was $500 Million at 3.67%,
maturing in 2019.
GREEN ACRES MALL
Green Acres Mall – Valley Stream, NY
• Green Acres Mall serves an expansive and diverse
trade area which includes southeast Queens and
southwest Nassau County. The mall was 92.6%
occupied at September 30, 2103 with sales per foot
of $540. The purchase price was $500.0 million
and the transaction closed on January 24, 2013.
Concurrent financing was $325.0 Million at 3.62%,
maturing in 2021.
25
KINGS PLAZA SHOPPING CENTER
• Kings Plaza Shopping Center is a 1,200,000 square
foot, super regional center which opened in 1971.
• Kings Plaza is the only enclosed super regional
shopping center within the borough of Brooklyn.
• Anchors: Macy’s, Sears and Lowe’s.
• The center features more than 150 stores and
eateries including; A/X Armani Exchange, H&M,
Forever 21, Guess, Old Navy, Modell’s Sporting
Goods, MAC Cosmetics, American Eagle Outfitters,
Victoria’s Secret, Swarovski, Pink.
26
GREEN ACRES MALL
• Green Acres Mall is a 1,800,000 square foot, super
regional mall built in 1956, most recently renovated
and expanded in 2007.
• Green Acres Mall, located on the border of New York
and Nassau County, has been serving the southeast
Queens Communities and southwest Nassau County
for over 50 years.
• Anchors: Macy’s, Macy’s Men’s, Sears, Kohl’s, J.C.
Penney, BJ’s Wholesale Club and Walmart.
• There is 408,000 square feet of in-line mall tenant
space. Retailers include Forever 21, Aeropostale,
H&M, Modell’s Sporting Goods.
27
TRADE AREA MAP
Queens Center, Kings Plaza and Green Acres Mall
Macerich specializes in
acquiring, leasing,
managing and redeveloping
successful retail properties
in many of the country’s
most attractive, densely
populated markets.
0
2
miles
4
N
The recent acquisition of
two extremely attractive
Regional Shopping Centers
in the greater New York
Metro area, Kings Plaza
Shopping Center and Green
Acres Mall, join Queens
Center, owned since 1995,
with sales exceeding $1,000
per square foot.
28
DEVELOPMENT & REDEVELOPMENT PHILOSOPHY
• Great locations
• Working with the community
• Securing difficult entitlements
• Adding value
Santa Monica Place – Santa Monica, CA
29
BOOSTED BY DEVELOPMENT/REDEVELOPMENT ACTIVITIES
EXTERNAL GROWTH FROM DEVELOPMENTS/REDEVELOPMENTS

As of 9/30/13, In-process pipeline stood at $337M with a shadow pipeline of
$601-$712M (figures are at MAC's pro rata share)

We expect to add to the shadow pipeline, both additional redevelopments
and ground-up developments, over the coming 3 to 5 years
Fashion Outlets of Niagara Falls – Niagara Falls, NY
The Shops at North Bridge – Chicago, IL
30
CURRENT DEVELOPMENT/REDEVLOPMENT
OPPORTUNITIES
Property
Estimated
Completion Date
(a)
Estimated
Return (a)(b)
Total Project Cost
at 100% (a)(c)
($ Millions)
Ownership %
Fashion Outlets of Chicago, Rosemont, Illinois (d)
August 2013
11%
211.0
60%
Fashion Outlets of Niagara Falls USA, Niagara Falls, NY
2014 - 2015
9%
$75.0
100%
2014
8%
523.1
50%
Tysons Corner Center, McLean, Virginia
(a) Much of this information is estimated and may change from time to time. See the Company’s forward-looking statements disclosure on page 2 for factors
that may affect the information provided in this table.
(b) Estimated Return is calculated based on stabilized income after development divided by project direct costs excluding GAAP al locations of non-cash and
indirect costs.
(c) This excludes GAAP allocations of non-cash and indirect costs.
(d) After the third anniversary of substantial completion of the development, the Company may elect to purchase the interest of the oth er member based on a
net operating income formula using a 6.5% capitalization rate.
31
FASHION OUTLETS OF CHICAGO
Chicago/Rosemont, Illinois - Opened August 1, 2013
•
Fashion Outlets of Chicago, 60%
owned by Macerich, is a fully enclosed
two level, 526,000 square foot outlet
center.
•
The site is located in the Village of
Rosemont, Illinois at the intersection of
the I-190 and I-90, within 1 mile of
O’Hare International Airport.
•
The Chicago area has over 13 million
people and approximately 46 million
annual tourist visits.
•
Project cost at $211 million with an
estimated 11% stabilized return.
32
TYSONS CORNER CENTER
Tysons Corner, Virginia - Mixed-Use densification project is currently underway
•
Adjacent to 2.1 Million square foot regional shopping center
•
50/50 Partnership between Macerich and Alaska Permanent Fund
•
The redevelopment opening in phases in 2014, will include:
– Trophy Office Tower (22 floors from grade, 20 of office only)
• Over 69% leased including:
 Intelsat (NYSE: I), the world’s leading provider of satellite
services, will be the marquee anchor lease.
 Deloitte LLP, International Big 4 Accounting firm
– Luxury High-Rise Residential Tower
(30-story, 430 units)
– Hyatt Regency Luxury Hotel
(17-story, 300 rooms)
•
Total estimated Cost of Redevelopment $532M, Macerich share $262M
with an 8% estimated stabilized return
•
$100M has been incurred to date, balance to be funded from owner
equity; incremental proceeds from the August 30, 2013 loan refinance
were $275M at MAC’s share
33
TYSONS CORNER CENTER
Extending Our Core Via Redevelopment
N
OFFICE TOWER
RESIDENTIAL
TOWER SITE
PARKING DECK
LORD &
TAYLOR
PLAZA AND
HOTEL SITE
EXISTING MALL
PARKING DECK
34
1861 INTERNATIONAL DRIVE
Existing office building at Tysons Corner Center
•
Trophy 6-story, 175,000 square foot office
building adjacent to Tysons Corner Center
•
Acquired by Macerich in 2005
•
Percentage of GLA leased:
•
•
– December 31, 2013
99.1%
– December 31, 2012
76.6%
– December 31, 2011
73.7%
– December 31, 2010
10.9%
We’ve leased over 154,000 square feet in
the existing office building over the past
three years, while simultaneously leasing
the new office tower on the opposite side
of the regional shopping center
Capital Grille Restaurant, Presidential Bank
and Fidelity Investments located in the building
PHASE 1
REDEVELOPMENT
SITE
ANCHOR
MALL
PERIPHERAL
PARKING STUCTURE
1861 INTERNATIONAL DRIVE
35
FASHION OUTLETS OF NIAGARA FALLS USA
Niagara Falls, New York
•
175,000 square foot expansion of
existing outlet center on the U.S.
side of Niagara Falls
•
Niagara Falls receives 22 million
tourists visits per year
•
Total estimated Cost of Redevelopment
- $75 million with a 9% estimated
stabilized return
•
Anticipated to open in late 2014 to
early 2015
36
OTHER DEVELOPMENT/REDEVLOPMENT
OPPORTUNITIES
Property
Estimated
Completion Date
(a)
Total Project Cost
at 100% (a)(b)
($ Millions)
Ownership %
Broadway Plaza, Walnut Creek, CA
2015 – 2017
$250 - $260
50.0%
Estrella Falls Mall, Goodyear, AZ
2016 – 2017
$220 - $230
86.6%
Green Acres Mall, Valley Stream, NY
2015 – 2016
$100 - $150
100%
Kings Plaza Shopping Center, Brooklyn, NY
2014 – 2016
$100 - $120
100%
Los Cerritos Center, Cerritos, CA
2015 – 2016
$30 - $40
51%
2015 – 2016
$30 - $45
100%
2015 - 2017
to be determined
100%
2015
$25 - $30
100%
2014 - 2015
$30 - $35
50%
500 North Michigan, Chicago, IL
(adjacent to The Shops at North Bridge)
Paradise Valley Mall, Phoenix, AZ
Santa Monica Place, Santa Monica, CA
Scottsdale Fashion Square, Scottsdale, AZ
(a) This slide includes potential developments or redevelopments that the Company is considering. Average returns are expected to be 8 % to 12%. Much of
this information is estimated and may change from time to time. There is no certainty that the Company will develop any or all of these poten tial projects.
See the Company’s forward-looking statements disclosure on page 2 for factors that may affect the information provided in this table .
(b) This excludes GAAP allocations of non-cash and indirect costs.
37
BROADWAY PLAZA
Walnut Creek, California
Future
Development
Current
Site Plan
38
BROADWAY PLAZA
Walnut Creek, California
Fountain Plaza Looking East
Broadway Plaza Lane
Approach to Main Plaza
Broadway Plaza Street Looking West
39