Santa Monica, Calif.-based real estate investment trust (REIT), The Macerich Company (MAC - Analyst Report) recently acquired an indoor shopping mall – Green Acres Mall – from a subsidiary of Vornado Realty Trust (VNO - Analyst Report). The acquisition, worth $500 million, was funded partly with a $325 million fixed rate loan and partly from Macerich’s cash balance and line of credit.
Positioned at Valley Stream, N.Y., Green Acres Mall spans 1.8 million square feet. The super regional mall has been serving the diverse trade area of the city, including the southeast Queens and southwest Nassau County, for more than 50 years. The mall is well connected to these major regions by major highways and expressways including Nassau Inter-County Express routes as well as two MTA New York City Transit routes.
Green Acres Mall is currently 94% anchored and boasts over 200 stores, including restaurants. With industry-leading tenants, such as AT&T Inc. (T - Analyst Report), Macy's, McDonald's Corp. (MCD - Analyst Report), J. C. Penney, Aeropostale and Kohl's, the upscale mall generates revenues per square foot of over $520 annually.
This strategic buyout is a quality addition to Macerich’s portfolio of A-class malls in some of the most attractive markets in the U.S. including Ariz., Calif., Va. and N.J. We expect the property to generate a steady source of rental revenue going forward and strengthen its top-line growth.
Macerich is scheduled to release its fourth-quarter 2012 results on Feb 6, 2013 before the opening bell. The Zacks Consensus Estimate for the company’s fourth-quarter FFO (funds from operations) currently stands at 87 cents per share.
Zacks Earnings ESP (Read: ZACKS EARNINGS ESP: A BETTER METHOD) for Macerich is +1.15% for the fourth quarter. This, along with its Zacks Rank #3 (Hold), makes us confident about a positive earnings surprise call.
Note: FFO, a widely accepted and reported measure of the performance of REITs is derived by adding depreciation, amortization and other non-cash expenses to net income.
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