BofA update shows where active managers are putting money
SANTA MONICA - Macerich Company (NYSE:MAC), a $4.23 billion market cap retail REIT with a FAIR financial health rating according to InvestingPro, announced Tuesday the acquisition of Crabtree Mall, a 1.3 million square foot retail center in Raleigh, North Carolina, for $290 million.
The company expects an initial yield of approximately 11% based on the property’s estimated 2025 net operating income, with potential to increase to approximately 12.5% when including signed leases with rent expected to commence in 2027.
Macerich funded the acquisition with cash on hand and $100 million in borrowings from its revolving credit line, which it expects to repay within 30 days using proceeds from a planned $160 million two-year term loan.
"Crabtree checks all the boxes for pursuing opportunistic external growth with its strong traffic and sales, its market-dominant position in a high-growth market," said Jack Hsieh, President and Chief Executive Officer of Macerich, in a press release statement.
The company plans to implement a strategic investment plan totaling approximately $60 million in redevelopment and leasing capital at the property through 2028.
Crabtree Mall, the largest mall in North Carolina’s Research Triangle area, currently features over 200 tenants including Apple, Coach, H&M, and Macy’s. The property generates $429 million in annual sales, $951 in sales per square foot, and attracts over 8.7 million visitors annually.
The acquisition represents Macerich’s entry into the Southeastern U.S. market. The company stated the financing structure is expected to keep it within previously announced deleveraging targets under its Path Forward Plan.
Macerich, a real estate investment trust, currently owns 41 million square feet of real estate across 38 retail centers, primarily concentrated in California, the Pacific Northwest, Phoenix/Scottsdale, and the Metro New York to Washington, D.C. corridor. The company has demonstrated strong revenue growth of 20.66% over the last twelve months. According to InvestingPro, which offers comprehensive analysis and 6 additional key insights about MAC, the stock is currently overvalued based on its Fair Value calculation.
In other recent news, The Macerich Company reported its first quarter 2025 earnings, revealing a larger-than-expected loss with an EPS of -$0.20, missing the forecasted -$0.0747. Despite this, the company’s revenue of $249.22 million exceeded expectations of $206.71 million, indicating robust operational performance. Truist Securities maintained a Buy rating on Macerich, with a $19.00 price target, emphasizing the company’s strong leasing activity and improved financial metrics. Jefferies also raised its price target for Macerich to $19.00 from $18.00, while maintaining a Buy rating, reflecting confidence in the company’s strategic initiatives.
Meanwhile, Mizuho Securities upgraded Macerich from Neutral to Outperform, although it lowered the price target to $18.00 from $22.00, citing potential for long-term earnings growth and strategic progress under new leadership. Macerich’s annual stockholders meeting saw the election of eight directors and approval of executive compensation, along with the ratification of KPMG LLP as the independent accounting firm for 2025. The company also announced significant leasing achievements, with 2.6 million square feet of leases signed in the first quarter, marking a 156% increase compared to the previous year.
Furthermore, Macerich’s Signed Not Yet Open (SNO) pipeline increased to $80 million, suggesting a solid foundation for future earnings. The company’s strategic redevelopment projects and tenant expansion efforts continue to contribute to revenue growth and positive investor sentiment. These developments highlight Macerich’s ongoing efforts to navigate the retail real estate market effectively.
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