Macerich Company (The)

Greetings. Welcome to the Make the Rich Company fourth quarter 2022 earnings call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. Questioners, we ask that you please limit your time to one question and one follow-up question. If anyone should require operators to assist during the conference, please press star zero on your telephone keypad. I will now turn the conference over to your host, Samantha Greening. You may begin. Thank you.

Thank you for joining us on our fourth quarter 2022 earnings call. During the course of this call, we'll be making certain statements that may be deemed forward-looking within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995, including statements regarding projections, plans, or future expectations. Actual results may differ materially due to a variety of risks and uncertainties set forth in today's press release and our SEC filings, including the adverse impact of the novel coronavirus on the U.S. regional and global economies, and the financial condition and results of operations of the company and its tenants. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the earnings release and supplemental filed on Form 8K with SEC, which are posted on the investor section of the company's website at masearch.com. Joining us today are Tom O'Hearn, Chief Executive Officer, Scott Kingsmore, Senior Executive Vice President and Chief Financial Officer, and Doug Healy, Senior Executive Vice President of Leasing. And with that, I'd like to turn the call over to Tom.

Thank you, Samantha. We are pleased to report another strong quarter with the majority of our operating metrics continuing to trend very positively. After a solid first three quarters of 22, we had a very strong fourth quarter. We saw robust retailer demand, and although tenant sales were flat in the fourth quarter versus a very strong fourth quarter of 21, We were up 3% for the year. Our average sales per square foot for tenants under 10,000 square feet was $869, a 7% increase over 2021. We continue to see traffic at about 95% of pre-COVID levels, but tenant sales are exceeding pre-pandemic levels with year-to-date sales up 13% compared to the same period in 2019. The quarter continued to reflect retailer demand that is at a level that we have not seen since before the great financial crisis. Some of the other fourth quarter highlights include occupancy, which ended the year at 92.6. That was 110 basis point improvement from the fourth quarter of 21, and a 50 basis point sequential quarter improvement over the third quarter of 22. We continue to see strong leasing volumes, which for the year were in excess of 21 levels, For the quarter, we executed 261 leases for 900,000 square feet. Doug will be providing more detail on that in a few moments. We saw same-center NOI growth of 2% in the fourth quarter compared to the fourth quarter of 21, which was a very strong quarter and a tough comp. FFO per share for the quarter came in at 53 cents. For the year, FFO was $1.96, which was about 3 cents ahead of consensus. On January 27th, we declared a dividend of 17 cents per share, payable March 3rd to record holders as of February 17th, 23. Since our last earnings call, we've had a significant amount of financing activity, which Scott will elaborate on shortly. The debt markets for our eight quality town centers is improving, and we're getting our deals done. We continue to focus on redevelopment and repositioning our top quality centers. Much of this work is mixed use, diversification, and densification. Some examples of that include at Kierland Commons, we're moving forward with a 110 unit luxury apartment project, which leverages a developable surface parking lot at this highly attractive open air center. At Flatiron Crossing, Broomfield, Colorado, in partnership with a national residential developer, we are planning a 330-unit luxury multifamily project centered around 2.5 acres of public amenities. At Biltmore Fashion, we're advancing plans for a 10-story, 250,000-square-foot Class A office tower, including best-of-class retail and food and beverage. Plans are also evolving for a 250-unit luxury apartment complex at Biltmore. At Scottsdale Fashion Square, we're moving forward with plans for multifamily, residential, and up to 500,000 square feet of Class A office. This is in addition to the re-merchandising of the Nordstrom Wing with luxury brands and dining, which is well underway. At our flagship, Tyson's Corner Center, We're building upon the highly successful phase one mixed use development that brought Tyson's Tower, VIDA, and the Hyatt Regency to the center. We are using a portion of our 2.4 million square feet of available entitlements to plan for another mixed use project. Also recently we announced the addition of Arte Museum at Santa Monica Place. Arte is an immersive digital art destination which is expected to occupy 48,000 square feet of space on the third level of the property in the former Arclight Theater space. Arte expects to attract 1 million visitors per year. It's a great entertainment addition and a major traffic generator that will bring tremendous energy to the third level of Santa Monica Place. As Doug will elaborate on shortly, we continue to be pleased with the strength of the leasing environment. As expected, given the depth and breadth of the leasing demand, we've had a very robust leasing result in 2022. The leasing interest continues to come from a wide range of categories. That includes health and fitness, such as Lifetime at Broadway and Scottsdale Fashion Square, food and beverage usage, including pinstripes in round one, entertainment, such as Arte Museum, and sports, such as Shields and Dick's Sporting Goods. coworking, hotels, such as Caesars Republic at Scottsdale, and multifamily projects at Kierland, Flatiron, and Tysons, interest continues at levels we've never seen before. Bankruptcies continue to be at a record low, and we continue to expect gains in occupancy and net operating income as we progress through 2023. And now I'll turn it over to Scott to discuss in more detail the financial results for the quarter, significant financing activity, and guidance for 23.