The Macerich Company (MAC)

The Macerich Company is one of the largest shopping mall REITs in the United States, owning and operating a portfolio of regional and premium outlet shopping malls concentrated in high-barrier-to-entry markets. Unlike the industry’s doom narrative about retail apocalypse, Macerich has carved out a defensible position by focusing on best-in-class properties in affluent, densely populated markets where foot traffic remains robust and replacement value is extraordinarily high. The company’s assets span California, Arizona, Florida, New York, and other prime locations, serving customers with strong demographics and purchasing power.

The Business and Its Portfolio

Macerich operates about 50 properties, anchored by a mix of department stores (Macy’s, Nordstrom), lifestyle brands, and specialty retailers. The company’s portfolio is neither a collection of commodity malls nor a pure discount outlet operator—it sits in the middle, managing properties that generate solid sales-per-square-foot and attract the retail tenants that other landlords struggle to book. Properties like South Coast Plaza in Orange County, Fashion Outlets in Las Vegas, and properties in Arizona and Florida are flagship assets with resilient consumer bases and limited direct competition.

The typical Macerich property is a regional enclosed mall or outdoor lifestyle center with strong anchor department stores, national retailers, and regional tenants. These are not the ghost malls you see in Rust Belt videos; they’re located in markets with high real estate values, population growth, or both. Rental income comes from base rent plus percentage leases (additional rent based on tenant sales), which ties the REIT’s fortunes to retailer performance but also aligns incentives.

The Revenue Model

Macerich generates revenue primarily from tenant rents (base and percentage) and a smaller portion from management fees and other property services. Lease terms typically run three to ten years, providing some predictability, though economic downturns and industry disruption create refinancing and occupancy headwinds. The percentage-rent component is a double-edged sword: it benefits from strong tenant sales but exposes the REIT to traffic and spending declines.

The company must maintain occupancy rates that justify its cost of capital; capital expenditures for property improvements, parking, common area maintenance, and tenant allowances are ongoing obligations. Like other REITs, Macerich is required to distribute at least 90% of taxable income as dividends, constraining reinvestment flexibility and making it dependent on refinancing and capital markets access to fund growth or maintain properties.

The future of regional retail real estate belongs to the best locations with the best operators, not to all properties equally.

Competition and Market Position

Macerich competes with other mall REITs—notably Simon Property Group (the largest and most dominant in the sector) and Unibail-Rodamco-Westfield—as well as with private mall operators and non-mall retail formats (outdoor centers, power centers, e-commerce platforms). The shift to online shopping has permanently reduced demand for retail square footage; the winners have been properties in strong demographic markets with defensible anchors and location advantages that e-commerce cannot replicate.

Macerich’s edge, if one exists, is twofold: its geographic concentration in coastal and growth markets where land is scarce and new construction is difficult, and its operational focus on tenant experience and property quality. Properties in Orange County, Las Vegas, Phoenix, and South Florida benefit from population growth, tourism, and affluent customer bases. These characteristics do not make the REIT immune to recession or structural retail decline, but they do provide some resilience compared to malls in secondary markets or regions with weaker demographics.

Pressures and Risks

The headwinds facing Macerich are substantial. Retail foot traffic has not returned to pre-pandemic levels at many malls. E-commerce continues to reduce the number of department store anchors, and the loss of an anchor tenant can devastate a mall’s economics by eroding traffic and making the property less attractive to other tenants. Macerich has faced anchor closures and tenant bankruptcies during economic stress, forcing property value write-downs and dividend cuts.

Debt maturity and refinancing risk are persistent concerns in a rising-rate environment. REITs are highly leveraged; a mall REIT’s ability to refinance depends on lender confidence in its properties and cash flows. Recession, sudden spike in capitalization rates, or negative earnings surprises can lock the REIT out of capital markets. Occupancy declines, tenant sales compression, and reduced rental rates during turnovers are ongoing operational challenges.

The secular shift in consumer spending—toward experiences, services, and online goods rather than in-mall shopping—is real and structural, not cyclical. Macerich’s long-term value depends on whether its premium locations and tenant mix can adapt faster than demand erodes, or whether scarcity value and redevelopment potential (mixed-use conversions, residential, office) can eventually unlock value if pure retail becomes genuinely obsolete.

Researching Macerich

Start with the company’s 10-K filing, filed annually with the SEC. Key metrics to track are occupancy rate, same-store net operating income (NOI), funds from operations (FFO) per share, debt-to-EBITDA, and dividend payout ratios. Management commentary on anchor tenant activity, tenant sales, and capital allocation strategy reveals conviction about the portfolio and the business.

Compare Macerich’s metrics to Simon Property Group and other mall REITs to assess competitive position. Look for news on anchor store openings or closures, major tenant turnovers, and property redevelopment initiatives—these signal where management sees opportunity. Monitor real estate industry publications and earnings calls for insight into traffic trends, tenant demand, and the company’s ability to push rents and maintain occupancy in a competitive environment.