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SANTA MONICA, CA-The Macerich Co. gained $46 million on the sales of four of its malls during the third quarter that ended Sept. 30, boosting its earnings substantially. Officials of the mall owner and REIT said they plan to plow the profits back into the Macerich development and redevelopment program, highlights of which they discussed in a conference call Friday with financial analysts.

Tom O’Hern, Macerich CFO, termed the period ending Sept. 30 “another quarter with good tenant sales gains, continued high occupancy levels, strong re-leasing spreads, significant development and redevelopment progress.” Macerich earned $47 million for the quarter, or 66 cents per diluted share, compared with $4.1 million or 7 cents per share-diluted for the quarter ended Sept. 30, 2005. O’Hern explained that the big jump this year resulted from the $46 million gain on the sale of the four properties, which included the Great Falls Marketplace and Holiday Village Mall in Montana, Greeley Mall in Colorado and Parklane Mall in Reno.

Arthur Coppola, president and CEO of Macerich, commented during the conference call on some activities following the end of the third quarter and some of the REIT’s ongoing activities, including its plans for the 11 buildings that it acquired from Federated as part of that company’s merger with Macy’s. “We are doing well in replacing or repositioning all of them,” Coppola said, explaining that the Macerich policy regarding individual properties is “to announce the new anchors or the new expansions when they are fully entitled” by the cities in which they are located. Coppola said Macerich expects “some very positive announcements” concerning the Federated properties over the next six months.

Regarding the company’s plans to reposition the Santa Monica Place mall in Santa Monica, CA, Coppola commented, “We’ve made the decision that we’re going to take the roof off. It’s going to go open air.” The Macerich CEO added, “We anticipate adding a high-end specialty anchor and a number of luxury tenants” like those that might be found on Rodeo Drive in Beverly Hills and at other premier shopping districts, he said. Macerich needs approval from the City of Santa Monica for the Santa Monica Place changes and has made “great progress” toward that approval, according to Coppola, who noted that the REIT has conducted 20 or more community-outreach meetings in the city.

Another site that came up during questioning from analysts was Queens Center in New York, where Macerich owns a parcel between the center and the Long Island Expressway that has development potential. The company expects to announce plans for the site sometime in next three months, but only after it secures entitlements for the site.

Macerich this month received Phoenix City Council approval to add up to four or five mixed use towers at Biltmore Fashion Park, and in Thousand Oaks, CA in October it won planning commission approval in October for the first comprehensive renovation and expansion plan of the Oaks Mall since it was first opened in 1978. The expansion will add 230,000 sf to the approximately 1 million sf of existing space.

Coppola also commented on the Oct. 13 opening of the first phase of the company’s of Twenty-Ninth Street, an 805,000-sf shopping district in Boulder, CO, which is 87% leased with an additional 7% of the space in negotiation. The balance of the project is scheduled for completion in the summer of 2007. The company staged the grand re-opening of its Carmel Plaza in Carmel, CA on Oct. 21, following an $11 million renovation that included reconfiguring a former department store and adding new luxury tenants including San Francisco based Wilkes Bashford and Tiffany & Co.

During the quarter, Macerich signed 326,000 sf of specialty store leases at average initial rents of $40.88 per sf, with starting base rent on new lease signings that rose 23.7% higher than the expiring base rent.Total same center tenant sales for the quarter edged upward 5.3% on a year-to-year basis, with the total occupancy of all Macerich centers remaining basically the same at 93%.

O’Hern noted that comparable tenant sales rose 3.1% in comparison with the third quarter of last year. Total mall sales per sf were $436 in the quarter, up almost 5% from year-end figures.

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