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Calif.-based retail real estate investment trust (REIT), The Macerich Company (MAC - Analyst Report) disclosed the vending of 5 assets and the results of its recent equity issuance. This comes as part of its capital infusion efforts.

In particular, Macerich disclosed the divestiture of Green Tree Mall in Clarksville, Ind. and an office complex in the Redmond Town Center mixed use project. Moreover, the company is in the process of vending three more assets, which are basically malls. These sales are expected to reach completion this month and will help the company fetch around $470 million, which comes as its pro rata share of the total sale proceeds.

As a matter of fact, the average annual tenant sales per-square-foot for the mall dispositions is $389. This is substantially below Macerich’s overall portfolio’s mall tenant sales ($535 per square foot) experienced in the first quarter of 2013. In addition, Macerich’s common stock offering through its at-the-market program helped raise $171 million.

We believe the measures are a strategic fit for Macerich. The portfolio restructuring initiatives through the addition of upscale retail properties and sale of non-core assets would help it achieve a high-quality portfolio.

In the first quarter of 2013, Macerich continued construction at a 526,000 square feet fashion outlet center - Fashion Outlets of Chicago - which is slated to open for business on Aug 1, 2013. Also, Macerich stated that over 150 of the most desired brands joined the mall including Bloomingdale's The Outlet Store, Skechers USA Inc. (SKX - Analyst Report), Last Call by Neiman Marcus, Gap Inc. (GPS - Analyst Report) and Saks Incorporated .

Moreover, despite the share dilution impact, the capital raise through common stock issuance would help enhance Macerich’s financial flexibility, which had a total debt of $7.0 billion as of the end of first-quarter 2013.

Macerich currently has a Zacks Rank #2 (Buy).


 

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