Macerich, a leading shopping centre operator, was able to significantly reduce its losses in the second quarter. This was facilitated by intensive leasing activities and a strategic reorientation of its portfolio. During this period, the company signed new and renewed leases for approximately 1.3 million square feet of space, exceeding expectations and laying a solid foundation for further growth.
Jackson Hsieh, President and CEO of Macerich, emphasised during the second-quarter earnings call that no new regional shopping centres are currently being built. He highlighted that about 90 per cent of future net operating income (NOI) would come from prime assets and the world's best retailers. This statement underscores the REIT's focus on high-quality locations and tenants.
Macerich owns a real estate portfolio of 40 million square feet, primarily concentrated in 37 shopping centres in key markets such as California, the Pacific Northwest, and the corridor between Washington and New York. Hsieh took the helm of the company in early 2024 at a time when the focus was on stabilising occupancy rates in some shopping centres. Since then, Macerich has strategically divested some of these properties to optimise its portfolio. At the same time, the development of new shopping centres in these primary markets has almost come to a halt, which secures a strong position for Macerich and a handful of competitors such as Simon Property Group in a competitive market that continues to be driven by demand from Gen Z and other consumer groups.
Macerich's occupied space reached 94 per cent in the second quarter, an increase from 92 per cent in the same period of 2025. The new leases are expected to generate annual gross income of approximately US$124 million. Tenants with whom new agreements were concluded include renowned brands such as Aerie, Offline by Aerie, Old Navy, Eataly, Zara, and Sephora. Leases were also signed with providers in the growing 'experience retail' segment, such as Level 99 and Golf Galaxy.
The REIT's rental income for the second quarter was US$233.4 million, a slight increase from US$232.7 million in the second quarter of 2025. Total revenues were US$249.7 million, roughly comparable to the previous year. Funds from Operations (FFO), a key profitability metric for REITs, rose to US$100.4 million on an adjusted basis, compared to US$88.7 million in the prior-year period. While Macerich reported a net loss of US$27.1 million for the quarter, this was lower than the nearly US$41 million loss in the previous year. The company attributed the reduction in loss to gains from asset sales over the past three months. This included the sale of Macerich's minority stake in the West Acres shopping centre in Fargo, North Dakota, for US$1.4 million.
Macerich was also active in acquisitions last quarter, which included the prominent purchase of Annapolis Mall in Maryland for US$272 million in early May, in addition to an adjacent vacant Sears property. Future Net Operating Income (NOI) – a forecast based on vacancy, occupancy rates, and other factors, but excluding income from lease terminations – increased by 3.8 per cent annually in the second quarter. Macerich has liquidity of approximately US$1.2 billion, including US$900 million from its revolving credit facility. Combined with strong leasing figures and a positive outlook for future NOI, the company is confident it can further reduce losses and drive growth under its 'Path Forward 3.0' plan (an update to the original 'Path Forward' plan introduced by Hsieh in 2024).
Hsieh commented that the company benefits from an enormous advantage due to an integrated operating platform, excellent relationships with national tenants, and sufficient financial resources without reliance on mortgage loans, which provides speed and security.
