Macerich Company (The)

Ladies and gentlemen, thank you for standing by. Welcome to the first quarter 2024 Mace Rich earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you would need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to your speaker today, Samantha Greening, Director of Investor Relations. Please go ahead.

Thank you for joining us on our first quarter 2024 earnings call. During the course of this call, we'll be making certain statements that may be deemed forward-looking within the meaning of 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. 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 the SEC, which are posted on the investor section of the company's website at nayserich.com. Joining us today, are Jack Shea, President and 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 turn the call over to Jack.

Thank you, Samantha. Good morning and thank you all for joining my first quarterly earnings call for the Maesrich Company. I am grateful for the Board of Maesrich selecting me at this time to chart a new direction and lead the company especially in light of our recent 30-year listing celebration on the New York Stock Exchange. I am very optimistic and confident about our company's future. Since March 1st, I've had the privilege of meeting over 80% of our company's associates in each of our six office locations and in my property tours of 22 of our largest assets. I can tell you that there is tremendous passion and desire for change and new leadership from our associates. Our well-tenured team members across many business lines are excellent. Many of our assets are fortress-like in terms of their market position, annual customer visits, tenancy, and overall sales production. And while we have proven operational processes there is even more room for improvement. I also met with several tenants and joint venture partners of Maastricht who are excited about moving forward with us. In our most recently quarterly Board of Directors meeting last week, I outlined my strategic plan for the company, Our Path Forward, which focuses on the following key objectives that we expect to take three to four years to complete. Number one, simplifying the business. We expect to sell assets and consolidate certain JV interests over time. Asset sales would be focused on whether a center is core to our strategy, including sales per square foot and other factors, such as debt in place, trade area positioning, anchor positioning, city dynamics, et cetera. With regards to JVs, we will be very selective on deploying capital to consolidate JVs. Number two, improve operational performance by increasing NOI through backfilling certain vacant anchor locations, NOI improvement in our large eastern seaboard assets, NOI from our current executed lease pipeline that will produce $70 million in incremental rental revenues from new deals in 2024, 2025, and 2026, and improving permanent occupancy throughout the portfolio. We will be very selective with regard to new development and redevelopment spend. Near-term projects include the expansion at Green Acres and Flatiron Crossing. And number three, reduce leverage to the low to mid six times is a major priority for Mace Rich. In addition to focusing on our core business, which generates annual free cash flow after dividends of $150 million and executing on our asset sale plans, we also plan to return four to six properties back to lenders at loan maturity. This will take time, but we have a path to achieving this objective. One of the key intentions of our plan is to increase the competitiveness of our cost of capital. And if the market responds the way we expect, we may opportunistically issue equity over time to accelerate the deleveraging strategy. Based on our plan, $500 million of new equity reduces leverage by two-thirds of a turn. By executing on this plan, we will concentrate our portfolio in our best properties, which are thriving retail centers, and will have a substantially stronger balance sheet. This will position Maesrich to be offensive on acquisitions, reinvestment, and select development. In the last 60 days since I've joined the team, we have already started executing this plan. For example, we are underway on several asset transactions, which include property sales, consolidation of JV interests on certain assets, and potentially giving back properties to lenders. The timing of these transactions will impact our reported financial results, and include non-cash items that are difficult to forecast. So for the time being, we will be withdrawing our 2024 forecasted FFO per share guidance. We plan on reissuing guidance at the right time as we have more clarity on the timing and certainty of these transactions and initiatives that we are implementing as part of our strategic plan. Three weeks ago, I hosted a company-wide town hall Zoom meeting whereby I presented our company's new mission statement, corporate values, and property regrouping. Our mission at Mace Rich is to own and operate thriving retail centers that bring our communities together and create long-term value for our shareholders, customers, and partners. Our six corporate values are excellence, integrity, good relationships, empowerment, optimism, and fun. I, along with our senior leadership team, are constantly reinforcing all of us to challenge the status quo across the organization, do what you say, do your absolute best, be transparent, work together seamlessly, take ownership, be confident, and celebrate our success and progress as we strive to complete our strategic plan and mission statement. Again, I am very excited and confident about what our company will look like in the coming years. With that, I'll turn the call over to Scott to go through our first quarter results and financing activity.