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Is it Wise to Retain Macerich Stock in Your Portfolio Now?
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Key Takeaways
MAC owns premium shopping centers in vibrant U.S. markets, supporting solid cash flow generation potential
The company is divesting non-core assets to fund higher-growth projects and reduce leverage.
Tenant bankruptcies and a high debt load pose risks to MAC's near-term financial performance.
The Macerich Company (MAC - Free Report) is well-poised to gain from its portfolio of premium shopping centers in vibrant markets. Its focus on omnichannel retailing and developing mixed-use assets is likely to support its long-term growth, along with balance sheet-strengthening moves.
However, growing e-commerce adoption by consumers raises concerns for the company. Macerich also has a substantially leveraged balance sheet, and this remains a headwind.
What’s Aiding MAC?
Macerich, which carries a Zacks Rank #3 (Hold), has a high concentration of premium malls in vibrant U.S. markets. These properties are located in densely populated areas, where affluent consumers with significant disposable incomes live and play, offering the company solid scope to generate decent cash flows. Macerich’s decent number of well-capitalized retailers in its tenant roster and well-laddered lease maturity schedule help it navigate well through challenging times.
Macerich has been making efforts to enhance its asset quality and customer relationships by increasing the adoption of the omni-channel model. This is going to play well for the company. Further, the shift toward re-use and mixed-use properties through recapturing and repositioning of anchor tenants remains a key emphasis, while bringing brands to new markets at its mall is likely to attract shoppers.
Macerich has been focusing on an aggressive capital-recycling program. This involves the divestiture of non-core and slower-growth assets and the usage of the proceeds to increase its presence in core markets and invest in higher-growth properties through acquisitions, developments and redevelopment initiatives and lower its leverage. In April 2025, the company closed on the sale of SouthPark for $11 million. In the first quarter of 2025, Macerich closed on the dispositions of the Wilton Mall for $25 million.
Strategic dispositions made over the years have helped reduce impending bankruptcy issues across the lower-quality disposed portfolio. For 2025, Macerich expects to incur approximately $250-$300 million for development, redevelopment, expansion and renovations.
What’s Hurting MAC?
Given the conveniences of online shopping, it is likely to remain a popular choice among customers. Consequently, this might adversely impact the market share for brick-and-mortar stores.
Macerich’s performance in the upcoming quarters is expected to be negatively impacted by the bankruptcy of Forever 21 (filed in the first quarter of 2025), Express (in 2024) and others. In 2024, the company witnessed 13 bankruptcy filings from its tenants, totaling 54 leases.
Macerich has a substantially leveraged balance sheet. As of March 31, 2025, its total pro-rata share of debt was approximately $6.80 billion and net debt to adjusted EBITDA was 7.95X. This leveraged balance sheet limits its ability to withstand any credit crisis and unexpected negative externalities in the future.
Over the past three months, the company's shares have declined 4.2% against the industry's 2.4% growth.
Image: Bigstock
Is it Wise to Retain Macerich Stock in Your Portfolio Now?
Key Takeaways
The Macerich Company (MAC - Free Report) is well-poised to gain from its portfolio of premium shopping centers in vibrant markets. Its focus on omnichannel retailing and developing mixed-use assets is likely to support its long-term growth, along with balance sheet-strengthening moves.
However, growing e-commerce adoption by consumers raises concerns for the company. Macerich also has a substantially leveraged balance sheet, and this remains a headwind.
What’s Aiding MAC?
Macerich, which carries a Zacks Rank #3 (Hold), has a high concentration of premium malls in vibrant U.S. markets. These properties are located in densely populated areas, where affluent consumers with significant disposable incomes live and play, offering the company solid scope to generate decent cash flows. Macerich’s decent number of well-capitalized retailers in its tenant roster and well-laddered lease maturity schedule help it navigate well through challenging times.
Macerich has been making efforts to enhance its asset quality and customer relationships by increasing the adoption of the omni-channel model. This is going to play well for the company. Further, the shift toward re-use and mixed-use properties through recapturing and repositioning of anchor tenants remains a key emphasis, while bringing brands to new markets at its mall is likely to attract shoppers.
Macerich has been focusing on an aggressive capital-recycling program. This involves the divestiture of non-core and slower-growth assets and the usage of the proceeds to increase its presence in core markets and invest in higher-growth properties through acquisitions, developments and redevelopment initiatives and lower its leverage. In April 2025, the company closed on the sale of SouthPark for $11 million. In the first quarter of 2025, Macerich closed on the dispositions of the Wilton Mall for $25 million.
Strategic dispositions made over the years have helped reduce impending bankruptcy issues across the lower-quality disposed portfolio. For 2025, Macerich expects to incur approximately $250-$300 million for development, redevelopment, expansion and renovations.
What’s Hurting MAC?
Given the conveniences of online shopping, it is likely to remain a popular choice among customers. Consequently, this might adversely impact the market share for brick-and-mortar stores.
Macerich’s performance in the upcoming quarters is expected to be negatively impacted by the bankruptcy of Forever 21 (filed in the first quarter of 2025), Express (in 2024) and others. In 2024, the company witnessed 13 bankruptcy filings from its tenants, totaling 54 leases.
Macerich has a substantially leveraged balance sheet. As of March 31, 2025, its total pro-rata share of debt was approximately $6.80 billion and net debt to adjusted EBITDA was 7.95X. This leveraged balance sheet limits its ability to withstand any credit crisis and unexpected negative externalities in the future.
Over the past three months, the company's shares have declined 4.2% against the industry's 2.4% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are EPR Properties (EPR - Free Report) and W.P. Carey (WPC - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for EPR’s 2025 FFO per share has moved three cents northward to $5.06 over the past month.
The consensus estimate for WPC’s 2025 FFO per share has been revised upward by 1.2% to $4.88 over the past two months.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.