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SANTA MONICA, CA-The Macerich Co. did well in the fourth quarter and the full year in 2006 as the mall REIT followed its strategy of developing new malls, redeveloping existing properties and disposing of non-core assets. Arthur Coppola, president and CEO, called the fourth quarter “another example of strategically improving our overall portfolio with the sale of three non core assets and the acquisition of another strong East Coast mall.” The latter was a reference to the company’s $241 million acquisition of the Deptford Mall in Deptford, NJ.

Coppola and other Macerich executives discussed the company’s development plans and its financial results in a conference call with financial analysts Tuesday. The Macerich CEO said that the company is positioned to “fund and execute our development pipeline” in 2007.

Macerich is already under way on that development pipeline, which includes projects such as the groundbreaking that took place on Feb. 6 for the $250 million, 230,000-sf lifestyle expansion and renovation at the Oaks in Thousand Oaks, CA. Plans also call for a remodel of both the interior spaces and the exterior façade and will include a new 138,000-sf Nordstrom scheduled to open at the center in fall 2008.

Other projects in the development pipeline this year include Phase I of SanTan Village, a $205-million regional shopping center under construction in Gilbert, AZ that is scheduled to open in the fall of this year. The center, now 85% leased, is an open-air streetscape that will comprise more than 1.2 million sf on 120 acres.

In Boulder, CO, the grand opening of the first phase of the 805,000-sf Twenty-Ninth Street shopping district took place in October, with the balance of the project scheduled for completion this summer. The first phase of the project is 93% leased.

Another project slated to open this year is the Promenade at Casa Grande, a $135-million, one million-sf regional shopping center in Casa Grande, AZ in Arizona’s fastest-growing county, Pinal County. The center, along the Interstate-10 corridor between Phoenix and Tucson, is 85% committed and is scheduled to open in the fall.

During the quarter, Macerich signed 286,000 sf of specialty store leases at average initial rents of $39.90 per square foot. First-year rents on mall and freestanding store leases signed during the quarter were 21% higher than average expiring rents.

The company’s overall occupancy was virtually the same at the end of this year as it was at the end of last year at 93.6%, but mall tenant sales per sf increased 8.4% to $452 compared to $417 for the year ended Dec. 31, 2005. Same-center earnings before interest, taxes, depreciation and amortization, excluding lease termination revenue, were up 3% compared to the fourth quarter last year.

The mall REIT earned net income of $147.9 million for the fourth quarter ended Dec. 31, compared with $23.6 million for the comparable quarter a year ago, while earning $228 million for the year against $52.6 million the year before. Funds from operations increased to $124.7 million for the quarter compared to $105.9 million or $1.32 per share for the quarter ended Dec. 31, 2005 and FFO-diluted for the year was $383.1 million compared to $336.8 million.

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