Macerich Adjusts to Tough Retail Environment

"We're still in a very tough retail environment," Coppola said. "There's still plenty of headwinds, as measured by sales from our tenants."

The Macerich chairman and CEO said that the REIT has maintained very strong leasing despite the recession, but he added that the question is how long it can continue in light of the declining sales of its tenants. As it stands now, Coppola said, there is still plenty of room for Macerich to endure further downward sales trends and maintain positive leasing results.

Among the steps that Macerich has taken to adjust to the changing times is its decision to cut back significantly on its development pipeline, limiting it to "only those projects that were mission critical" and those that were already in progress before the economy turned. All of the REIT's development and redevelopment projects are on schedule and on budget, Coppola noted.

Other steps that Coppola cited were the Macerich dividend cut from 80 cents to 60 cents per share and the REIT's decision to "accept market pricing on our financings." The transactions that the company has completed in 2009 include the recent closing of a $130 million, four-year fixed-rate loan on a portion of Queens Center in Elmhurst, NY; a commitment for a $62 million, five-year financing of the Redmond Town Center office buildings in Redmond, WA; a commitment for a $205 million refinancing of the Shops at North Bridge on Michigan Avenue in Chicago; the closing of a $115 million bank refinancing of Twenty Ninth Street Center in Boulder, CO.

Also during the first quarter, Costco Wholesale opened a 159,000-square-foot store at Lakewood Center in Lakewood, CA. Costco became the fifth anchor at the property.

The Macerich FFO for the first quarter ended March 31 totaled $102.8 million or $1.16 per diluted share, compared to $1.05 per share-diluted for the quarter ended March 31, 2008. Net income for the quarter dropped to $14 million or $.18 per share, compared to $92.6 million or $1.25 per share in last year's first quarter, but the figures for last year included a one-time gain on the sale of assets of $99 million.