The Macerich Company (MAC) Q3 2026 earnings review
Macerich mall profit rises, but two more loans default
The Macerich Company, an owner of 37 US shopping malls, is filling its empty storefronts and lifting property profit, but new shares and mortgage defaults are holding back the bottom line. Operating profit at its core malls rose 5% from a year ago as occupancy reached 96% and new anchor stores drew more shoppers. Chief executive Jack Hsieh said Macerich has already opened 62% of its planned new stores, beating its 60% year-end goal a quarter early.
| Core mall property profit (ex cancellation fees) | +4.7% from a year ago (+3.8% in Q2) |
|---|---|
| Property cash flow (FFO) per share, excluding one-offs | $0.37 $0.36 a year ago (+11.9% more shares) |
| Store openings completion | 62% passed the 60% year-end target early |
| New-store leasing pipeline outlook (2024–2028) | Raised $7M to $131M of the $140M total goal |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because faster store openings in the malls ran into fresh balance-sheet trouble and share dilution. Even though property cash flow excluding one-offs grew 13%, a 12% higher share count from earlier stock sales kept per-share cash flow almost still at $0.37. Worse, two more mall mortgages totaling $399 million went into default in October and November, including the $325 million loan on Fresno Fashion Fair, a core mall the company planned to keep.
The question now is whether the revenue wave from new stores can outrun the growing share count and mortgage restructurings. Either the remaining store openings and the next mall purchase lift per-share cash flow in 2027, or extra shares and surrendered malls eat up the gains. The lender talks at Fresno Fashion Fair and the terms of the year-end mall purchase will tell.
🐂 Bull Case
Store Openings Pass Year-End Goal and Lift Mall Profit
"With the new leasing initiative largely completed, the results are now beginning to meaningfully show up in foot traffic, sales and NOI," chief executive Jack Hsieh said. Net operating income (NOI) is the property profit left after paying mall operating costs. Under its Path Forward turnaround plan, Macerich tracks a core group of 34 properties it intends to keep, which it calls Go-Forward Portfolio Centers.
Tenants are opening their doors faster than planned. Macerich opened 62% of its scheduled new stores by September, putting it "ahead of our 60% year-end target", Hsieh said. Its leasing speedometer, which tracks how many of the 1,000 planned new leases the company has signed, reached 91%, up from 88% in the second quarter.
- Core mall property profit (excluding lease cancellation fees): up 4.7% from a year ago, up from 3.8% growth in Q2
- Core mall leased occupancy: 96.1%, up 1.8 percentage points from a year ago
- Total portfolio leased occupancy: 94.9%, up 1.5 percentage points from a year ago
- New-store leased space signed in Q3: up 16.9% from a year ago inside 1.2 million total square feet
Signing a lease does not pay the landlord right away because the tenant has to build out the store first. Passing the 60% opening mark a quarter early proves that Macerich is turning signed paper into paying rent on schedule, which pushed core property profit growth well above the 3.5% second-half floor management set last quarter.
What to watch: fourth-quarter core property profit growth against the 2.4% rate implied by the second-half floor. Staying near 5% would show that newly opened stores are lifting the revenue base toward the company's 2027 growth goals.
New Anchor Stores Drive Traffic and Tenant Sales
Macerich is replacing closed department stores with sporting goods, entertainment and grocery anchors to bring shoppers back to its malls. Hsieh said foot traffic rose in the "high-single-digit to mid-double-digit range" at Freehold Raceway Mall, Annapolis Mall and Crabtree Mall after DICK'S House of Sport opened, with similar gains from Level 99 at Tysons Corner Center and Seafood City at Chandler Fashion Center.
Those extra visitors are spending money in the smaller shops along the mall corridors. Annual sales for stores under 10,000 square feet rose 7.4% from a year ago to $972 per square foot at core malls, and climbed 8.8% to $943 across the whole portfolio. Hsieh expects the anchor openings to create "demand tension for the next round of leases" so the landlord can charge higher rents.
What to watch: average base rent at wholly owned malls, which slipped 0.1% from a year ago to $67.14 per square foot even as joint-venture rents jumped 8.2%. A rise in wholly owned rents in 2027 would show that higher foot traffic is translating into pricing power across the entire portfolio.
New Notes and Credit Line Lift Liquidity to $2.2 Billion
Macerich used the third quarter to cut the interest rate on a major mall mortgage and add borrowing power. In August, the real estate trust raised $775 million of five-year exchangeable senior notes — debt that holders can later convert into stock above $28.19 per share — at a 2.25% interest rate, and bought a financial cap that protects shareholders from dilution until the stock passes $34.06.
In September, the company used part of that cash to pay off the $370 million mortgage on Green Acres Mall, which carried a 6.6% interest rate, triggering a $10.4 million debt payoff charge. After the quarter ended, Macerich also opened a $550 million credit line "primarily available to finance acquisitions" with $260 million ready to draw today, lifting total liquidity to $2.2 billion.
What to watch: quarterly interest expense on wholly owned properties, which fell 8.2% from a year ago to $66.8 million. Further drops in interest costs would confirm that replacing 6.6% property debt with 2.25% corporate notes is flowing through to cash flow.
🐻 Bear Case
Two Core Malls Default on $399 Million of Debt
Hsieh said Macerich can acquire and upgrade malls "all while remaining within our leverage targets". Yet net debt stood at 7.33 times modified cash flow (Adjusted EBITDA) at the end of September, up slightly from 7.30 times in June, and drops to 6.85 times only if you count $372 million of forward stock sales the company has not yet collected.
Right after the quarter closed, Macerich stopped paying or missed maturity on two more mortgages. On October 6, the $74.4 million loan on Fashion Outlets of Niagara Falls went into default. On November 2, the $325.0 million loan on Fresno Fashion Fair — one of the 34 core Go-Forward malls Macerich planned to keep — also entered default. For both properties, the company said it is "in negotiations with the lender on the terms of this loan".
- Fresno Fashion Fair (core Go-Forward mall): $325.0 million loan in default since November 2
- Fashion Outlets of Niagara Falls (non-core mall): $74.4 million loan in default since October 6
- Twenty Ninth Street (51% joint venture): $76.5 million company share in default since February 2026
- Santa Monica Place (in receivership): $300.0 million loan in default since April 2024
By our math, Macerich now has $775.9 million of its share of debt in default or receivership. Defaulting on a non-core mall is often a way to hand an unwanted property back to the lender to erase debt, which could help cover the rest of this year's asset-sale goal after Q3 sales brought in $73.6 million. Defaulting on Fresno Fashion Fair is different because losing a core mall would shrink the earnings base management is counting on for 2027.
What to watch: the outcome of the Fresno Fashion Fair lender talks in the fourth-quarter report. A loan extension keeps the core portfolio intact, while handing the keys to the lender would cut core property profit.
Higher Share Count Holds Per-Share Growth to 1 Cent
Real estate trusts are judged on Funds from Operations (FFO), which measures cash profit from properties before depreciation. Excluding one-offs such as default interest, receivership losses and debt payoff charges, Macerich's adjusted FFO rose 13.4% from a year ago to $109.1 million. Meanwhile, its standard GAAP net loss narrowed from $87.4 million to $16.7 million because of property sale gains.
Almost none of that 13.4% cash profit growth reached individual shareholders. Because Macerich sold stock earlier this year to fund its turnaround and mall purchases, the diluted share count used to calculate FFO jumped 11.9% from a year ago to 296.2 million shares. As a result, adjusted FFO per share rose just 1 cent, or 2.8%, from $0.36 to $0.37.
More shares are still on the way. Macerich is "under contract on our next off-market mall acquisition", Hsieh said, which should close by year-end. While management views buying malls as a growth driver, paying for them by settling the 16.1 million forward shares sold in June will add another 5% to the share count. Unadjusted FFO per share actually fell from $0.33 to $0.29 because one-off adjustments swelled to $22.1 million.
What to watch: the price and immediate cash yield of the year-end mall purchase, alongside when the 16.1 million forward shares settle. If the new mall needs years of construction before it pays full rent, the extra shares will weigh on per-share profit in 2027.
Rebuilding the Malls Pushed Nine-Month Property Spending Up 58%
Getting new anchor and inline tenants to sign leases requires heavy upfront cash from the landlord. Over the first nine months of 2026, Macerich's share of property capital spending — excluding mall acquisitions — jumped 57.9% from a year ago to $293.0 million, by our math, up from $185.6 million in the same period of 2025.
- Nine-month redevelopment and renovation spending (company share): $193.8 million, up 51.9% from $127.6 million a year ago
- Nine-month tenant allowances (cash paid to help tenants build stores): $56.0 million, up 80.6% from $31.0 million a year ago
- Q3 consolidated leasing expenses: 6.0% of revenue, up 1.8 percentage points from 4.2% a year ago
- Q3 shopping center operating expenses: 32.7% of revenue, up 1.2 percentage points from 31.5% a year ago
Higher store-opening and staffing costs also dragged down operating margins on the income statement, with internal leasing expenses and mall operating costs taking an extra 3.0 percentage points of revenue combined. The turnaround is working at the property level, but Macerich is spending heavily on construction and tenant build-outs before the new rent arrives.
What to watch: quarterly tenant allowance and redevelopment spending in the fourth quarter, which ran at $88.5 million in Q3 by our math. A drop in construction spending in 2027 as the 1,000-lease program finishes is needed for the new rent to turn into free cash.
Risks this quarter didn't answer
Three standing concerns about rent pricing, store openings and full-year profit received no numbers in the third-quarter earnings release.
- Base rent re-leasing spreads (new rent vs old rent on the same space): absent from the release for a third straight quarter after slowing in late 2025; without it, outside investors cannot verify the rent markup on the 1.2 million square feet signed.
- Physical occupancy vs leased occupancy: the release prints 96.1% core leased occupancy but does not print the physical occupancy rate (which trailed leased occupancy by 4.5 percentage points last quarter); the quarterly 10-Q filing will show how much of that gap closed.
- Full-year earnings and FFO outlook: still absent two years after management withdrew it in late 2024, leaving no official per-share profit range until the promised 2027 reinstatement.
💲 Other KPIs
Average base rent for stores under 10,000 square feet rose 1.6% from a year ago across all malls and 0.7% at core malls to $72.15. All of the increase came from joint-venture malls, where average rent climbed 8.2% to $85.83, while rent at wholly owned malls dipped 0.1% to $67.14.
Cost of occupancy measures the share of a store's sales that goes to rent, property taxes and mall upkeep. It dropped to 11.2% across all centers (11.3% at core malls) from 11.7% at the end of 2025 and 11.9% a year ago, because tenant sales grew 8.8% while base rents rose 1.6%.
Up 8.6% from $134.2 million a year ago and up from $141.9 million in the second quarter. Straight-line rent receivable is rent Macerich has recorded as revenue under accounting rules during free-rent build-out periods before the tenant actually pays cash, reflecting the wave of new store openings.
🔮 Guidance
Raised. Macerich lifted its cumulative estimate of extra gross revenue at its share from new stores opening between 2024 and 2028 by $7 million, to $131 million against a $140 million total opportunity. By our math, that leaves just $9 million left to sign. It is the fourth straight raise since Q3 2025: +$8M, +$9M, +$8M, +$7M.
Unchanged. The board declared a quarterly cash dividend of $0.17 per common share on November 2, payable December 28. Macerich has kept the payout at $0.17 every quarter since 2024 to preserve cash for mall redevelopments and debt paydowns.
❓ Key Questions
Will Macerich keep Fresno Fashion Fair or hand it back?
Fresno Fashion Fair is listed as a core Go-Forward mall, yet its $325 million mortgage went into default on November 2. Investors need to know whether management plans to extend the loan or surrender the mall to the lender.
How much of the $131 million pipeline is paying cash rent?
The $131 million new-store pipeline combines stores that are already open with leases that have not started paying rent. Breaking out how much of that $131 million was already in Q3 revenue would show the true remaining lift for 2027.
What are the terms of the year-end mall purchase?
Management is under contract to buy another mall by year-end and just opened a $550 million acquisition credit line. Shareholders need the purchase price, the immediate cash yield, and whether it will trigger settlement of the 16.1 million forward shares.
Why is wholly owned base rent flat while JV rent is up 8%?
Average base rent at wholly owned malls slipped 0.1% from a year ago to $67.14 per square foot, while joint-venture mall rent jumped 8.2% to $85.83. With re-leasing spreads no longer published, management should explain what is holding back wholly owned pricing.