Macerich Co (NYSE: MAC)

The Macerich Company is engaged in the acquisition ownership development redevelopment management and leasing of regional and community power shopping centers located across the United States. The company operates as a self administered self managed real estate investment trust and serves as the sole general partner of The Macerich Partnership L P a Delaware limited partnership. Through this partnership and its wholly owned management companies Macerich oversees a portfolio of 37 regional retail centers and one community power shopping center comprising roughly 39 million square feet of gross leasable area. The company was incorporated as a Maryland corporation in September 1993 and conducts all of its operations via the partnership and its management entities.

The Macerich Company generates revenue primarily from leasing retail space to tenants within its centers. Income consists of minimum rent payments percentage rent based on tenant sales and reimbursements for property taxes common area maintenance and other operating expenses. Additional revenue streams include fees from property management development services and leasing commissions paid by third parties. The company also recognizes gains from the occasional sale of land parcels or outparcels that are not core to its long term strategy. Overall the bulk of earnings derives from the ongoing operation of its shopping center portfolio.

The company reports its activities through two operational segments that are not defined by geography. The Macerich Company operates through the following segments: Consolidated Centers and Unconsolidated Joint Venture Centers.

• The Consolidated Centers segment comprises the shopping centers that the company owns and controls directly. These properties are fully consolidated in the financial statements and contribute the majority of the company’s gross leasable area and rental income. The segment includes regional malls and the single community power shopping center that are wholly owned or majority owned by Macerich. Management oversees leasing tenant relations maintenance and capital expenditures for these assets.

• The Unconsolidated Joint Venture Centers segment includes shopping centers in which Macerich holds an ownership interest but does not have controlling interest. These properties are accounted for under the equity method and their financial results are reflected in the company’s share of earnings from unconsolidated affiliates. The segment consists of regional retail centers held through partnerships with other real estate investors. Macerich provides property management leasing and oversight services while sharing decision making with its joint venture partners.

Macerich holds a notable position among publicly traded real estate investment trusts that specialize in regional malls. The company competes with other large mall owners such as Simon Property Group Brookfield Properties and GGP Inc as well as numerous private developers and regional operators. Competitive advantages stem from a diversified tenant mix that includes national retailers local boutiques and experiential offerings. The firm’s active management approach emphasizes on site property managers and leasing teams that respond quickly to market shifts. Macerich’s ongoing redevelopment and development program allows it to reposition underperforming assets and capture additional value from mixed use initiatives. Its balance sheet strength and access to capital markets support strategic acquisitions and disciplined disposition activities.

The company’s customers are primarily retailers that lease space in its shopping centers. These tenants range from national department stores and specialty apparel chains to restaurants entertainment providers and service providers. Among the largest tenants are Dick's Sporting Goods Victoria's Secret Signet Jewelers Abercrombie & Fitch The Gap LVMH Primark AE Outfitters H&M and Zara. Anchor tenants that drive foot traffic include Macy's JCPenney Dillard's Nordstrom Target and Walmart. In addition the centers serve millions of shoppers each year who visit for shopping dining and leisure activities.