Macerich Profits, Plans Projects

For the fourth quarter and year ended Dec. 31 Macerich reported that FFO per share increased 12% to $1.16 on a year-to-year basis and grew 9% to $3.90 for the full year, while net income increased to $30 million (51 cents per share) against $25.5 million (44 cents per share) on a quarterly basis and grew to $82.5 million ($1.40 per share) for the full year.

The bottom-line numbers have come to become expected at Macerich, which has posted solid earnings growth for some time and has embarked on a course of developments, redevelopments and acquisitions designed to ensure continued improvements in the bottom line. Among the acquisitions highlighted during Thursday's conference call were acquisitions in the Phoenix marketplace. In November, Macerich bought the Fiesta mall, a 1M-sf super-regional mall that registers sales per sf of $362 per year and in the fourth quarter acquired a 15% interest in the Metrocenter mall.

Along with these buys, Coppola declared that "The big acquisition news in the quarter and at year end" was the announcement that Macerich would buy the Wilmorite portfolio, for which it signed a definitive agreement to acquire Wilmorite Properties Inc. and Wilmorite Holdings LP for about $2.3 billion. "As we've gotten into it, we've found more and more opportunities there," said Coppola, who said Marcerich expects to close in April on the deal.

The company's biggest redevelopment news for the quarter and the year was its Nov. 19 opening of the Queens shopping center at an under-budget construction total of $270 million, noted Coppola, who said the New York venue is now 98% leased.

Other developments highlighted by the Macerich CEO incluced the San Tan Village in Gilbert, AZ, which is scheduled to open in 2007, although Coppola said Thursday that the entertainment section of the development might open in late 2006. Macerich isn't releasing precise cost estimates on the San Tan project, but "a broad estimate, depending on whether we ground lease certain parcels or build them, will be in excess of $200 million," according to Coppola's remarks Thursday. San Tan Village is part of a 500-acre master planned project in Gilbert that will unfold during several phases of development which "will be driven by market and retailers' needs," Macerich says. When it's finished, San Tan Village will comprise 3M sf of retail space that will include a 29-acre power center, a Wal-Mart in 2005, a Sam's Club and other elements. It will include a regional shopping center component of 1.3 million sf on 120 acres.