California-based retail real estate investment trust (REIT), The Macerich Company (MAC - Free Report) , disclosed the details of the planned expansion and renovations at Fashion Outlets of Niagara Falls USA. Shares of Macerich rose 0.18% during the trading session on May 9 on NYSE, following this news.
Particularly, the company aims to extend the property space by around 175,000 square feet and bring in 50 new tenants. The expansion is set to open later this year.
Fashion Outlets of Niagara Falls USA, owned by Macerich and managed by AWE Talisman, is one of the major stops for New York and eastern Canada shoppers. The property is also popular with visitors across the world. The property boasts a retail lineup of top tenants and has 77% of the expanded gross leasable area leased as of May 8.
With the completion of the portfolio enhancement plans, Fashion Outlets of Niagara’s property size will total over 700,000 square feet and its store count will reach 200. The tenant addition will include outlets of high-end retailers like Michael Kors Holdings Ltd. (KORS - Free Report) , Kate Spade & Co. , Under Armour, Inc. and J.Crew.
This strategic refurbishment of Fashion Outlets of Niagara will strengthen its dominance in the Upstate New York/Toronto region. Given the property’s strong tenants list, we expect it to generate a steady source of rental revenue going forward and strengthen Macerich’s top-line growth.
In late April, Macerich reported its first-quarter 2014 results, with funds from operations (FFO) per share of 81 cents, missing the Zacks Consensus Estimate by 4 cents and the year-ago quarter figure by a nickel. Higher-than-expected snow removal and utilities costs, resulting from bad weather conditions hurt the results. Nevertheless, revenues were higher aided by decent operating portfolio performance.
Currently, Macerich carries a Zacks Rank #3 (Hold).
Note: Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.