Macerich Company (The)

Ladies and gentlemen, thank you for standing by. Welcome to the second 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 Samantha Greening, Director of Investor Relations. Please go ahead.

Thank you for joining us on our second quarter 2024 earnings call. During the course of this call, we will 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 filing. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the earnings release and supplementals filed on Form 8K with the SEC, which are posted on the investor section of the company's website at nayserch.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. With that, I'd like to turn the call over to Jack.

Thank you, Samantha. Since our last earnings call on April 30th, I am pleased to announce that we are making solid progress on our path forward. Of one, simplifying the business, two, operational performance improvement, and three, reducing leverage. Our property ranking criteria is finalized, and we are applying operational and capital allocation focus on our properties within the Fortress, Steady Eddie, and Eddie's categories. On asset sales, in the second quarter, we sold an out parcel deal for $7.1 million, and today we closed on the sale of our 50% interest in Biltmore Fashion Park to our partner, Red Development. which will reduce $110 million in debt at Mace Rich. We are also marketing in closed centers and preparing for a robust sale process of our single asset out parcels across our portfolio. On loan give backs, we completed the short sale process on Country Club Plaza and are in lender discussions at Santa Monica Place. Our path forward goal is to reduce $2 billion in debt. Country Club Plaza, Santa Monica Place, Biltmore Fashion Park, and the Owl Parcel will reduce debt by approximately $564 million. By year end 2024, we expect to have line of sight to $1.4 billion of total debt reduction. over 50% of our overall $2 billion objective. Operational performance at Mace Ridge continues to rapidly improve. There is an acute focus from our East Coast leasing, asset management, and property management teams on the six large eastern seaboard assets, which are an important NOI contributor to our leverage ratio reduction plan. We are also in negotiations on eight anchor locations in centers within our Fortress and SteadyEddie portfolios, which will enhance overall center performance, traffic, and leasing momentum in those centers. Adding Dick's new House of Sport concept into our portfolio continues to be an important initiative. Our company-wide leasing momentum on executed lease deals, deals in pipeline, and releasing spreads are all positive and will result in more overall NOI in 2025, 2026, and 2027. The overall occupancy, sales per square foot, releasing spreads, and same-store NOI for our portfolio excluding Eddie's properties are noteworthy. namely 94.9%, $911 per square foot, 9.7%, and 2.3% respectively. During the last five months, we've made significant progress in identifying meaningful ways to enhance our leasing process across the company, which will improve productivity through significant efficiency, visibility, and free up our leasing team to lease through the elimination of spreadsheets and redundant internal meetings and calls. We recently had our lease process improvement team present to our board of directors, and we will roll this out to the entire company on our company-wide town hall meeting later today. Our redevelopment efforts are very focused now on three projects at Scottsdale Fashion Square, Flatiron Crossing, and Green Acres Mall. In total, these projects will cost approximately $300 million at share, of which $44 million in cost has been incurred, and will provide an incremental $36 million in NOI to Mace Rich. On the human capital front, I am pleased to congratulate Coyote Ola and Alec Kelso former co-heads of Spirit's asset management team who joined Mace Rich's asset management team. And Diana Lang has rejoined our board of directors. I will now turn the call over to Doug for a leasing update.