Macerich Company (The)

presentation there will be a question and answer session to ask a question during the session you will need to press star 1 1 on your telephone you will then hear an automated message advising your hand is raised to withdraw your question please press star 1 1 again please be advised that today's conference is being recorded I would like now to turn the conference over to Samantha Greening Assistant Vice President, Director of Investor Relations, please go ahead.

Thank you for joining us on our first quarter 2025 earnings call. During this call, we will be making certain statements that may be deemed forward-looking within the meaning of the safe harbor of the Private Security Litigation Reform Act of 1995, including statements regarding projections, plans, and 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 SEC, which was posted in the investor section of the company's website at matesreach.com. Joining us today are Jack Shea, President and Chief Executive Officer, Dan Swanstrom, Senior Executive Vice President and Chief Financial Officer, and Doug Healy, Senior Executive Vice President of Leasing. And with us in the room is Brad Miller, SVP of Portfolio Management. And with that, I turn the call over to Jack.

Thank you, Samantha, and good afternoon. We're pleased to discuss today the significant progress we continue to make in executing on our Path Forward plan. I want to make sure everyone comes away with three main themes from this call. First, Maestridge is a much better informed, aligned, and operationally focused company than ever before. Second, we are ahead of schedule on our leasing progress targets. This gives us a greater line of sight and confidence into the key operational, financial, and deleveraging metrics embedded in our path forward plan. And third, this leasing progress demonstrates how close we are to our major inflection point in mid-2026, the point that indicates we would be substantially complete with the plan. When I sent out the Path Forward plan in July of 2024, the goal was to create a new Mace Ridge. That required transforming the company by simplifying the business, improving operational performance, and reducing leverage. We put a mission statement in place to own and operate thriving retail centers that bring our communities together and create long-term value for our shareholders, partners, and customers. We instilled new corporate values of excellence, empowerment, integrity, optimism, relationships, and fun Based on the results I've seen to date, I can attest to how well this mission and the corporate values have been embraced throughout the company. I also put in place a new structure that I talked about last quarter to streamline all our permanent, specialty, and department store leasing teams under one leadership and reporting structure, make our asset management team a standalone group, and place our property operations, marketing, and development under a new leadership structure. To ensure that these teams could collaborate seamlessly with real-time tenant data and leverage the five-year Argus models that the asset and portfolio management teams created for each property, we implemented a leasing dashboard that we refer to internally as the leasing speedometer. This tool and other technology enhancements we've implemented drive every leasing and capital allocation decision at our properties. Everyone at Mace Rich is fully aligned on what we're doing. Over the past six to nine months, we have de-risked the path forward plan by consolidating joint ventures, issuing equity, completing our refinancings, and executing on dispositions. Today, I'll talk about the data we have now that gives me the confidence that we're on track to deliver our 2028 leverage and earnings metrics. This data shows that we're also on track with the major milestones and catalysts that can be expected to help us reach our mid-2026 inflection point. Let's speak to leasing first. Leasing is the piece of the plan that best tracks the progress on hitting our 2028 targets. It is what I am most focused on today at Maesrich. I believe that it is the most accurate predictor of Maesrich's future success. I'm pleased to say that we are ahead of schedule on all our leasing efforts. I noted last quarter that we are targeting an average of 4 million square feet of leasing in 2025 and 2026. During the first quarter, we signed 2.6 million square feet of leases, including 2.3 million square feet of renewals. As Doug will describe in a moment, that's when I doubled the leases signed in the first quarter a year ago. Between commitments and LOIs, we are nearly done with our 2025 lease expirations. We are now well into 2026 lease expirations. We are also laser focused on a higher percentage of new lease deals versus renewals in our annual mix of business, as new deals will be the primary driver of higher spreads and incremental revenue to hit our NOI goal. We are tracking our progress on this front with two metrics. The new deal completion percentage that we track internally on our leasing speedometer and our snow pipeline. As laid out in our last quarter earnings call, our initial goal on new deals was 50% progress by mid 2025 and 70% by year end 2025. Hitting the 70% goal by year-end would put us on track for the mid-80% range by mid-2026. Reaching that goal also puts us on track for our ultimate opportunity to achieve the $130 million in cumulative snow potential that I outlined last quarter. Reaching that mid-2026 leasing goal would effectively complete the new leasing goal outlined in our original plan. As I noted earlier, we are ahead of this plan. As of last quarter, our leasing speedometer was at 39%. I'm pleased to report that we are currently at 60% for new deal completion and have a large pipeline of LOIs, which gives us tremendous confidence in hitting the 70% mark by year end. Last quarter, our snow pipeline was 66 million. That has now grown on a cumulative basis to $80 million as of today, which puts us on track to achieve a total and cumulative snow pipeline of 100 million by year end. Doug will provide additional details on our snow pipeline shortly. While we're on the topic of leasing, I want to address the inevitable question on tariffs and any impact we're seeing. I'll echo what many CEOs have already said this quarter, that we've seen minimal impact to date across the portfolio. We've had three strong executive leasing committees since early April and have touched base with all retailers with leases out and virtually all are moving forward. In addition, we're in contact with existing tenants, and so far, there is no material effect on their business or inventories. We'll obviously continue to monitor these discussions and developments in real time. For our target of $2 billion of asset sales and loan givebacks, We continue to execute on targeted dispositions which strengthen the balance sheet, and I'm pleased with the substantial progress made by the team. Dan will provide an update on these activities shortly. We're approaching the balance of 2025 with a significant amount of confidence in the outcome and timing of our plan, as well as the clear conviction that we have de-risked the elements of the Path Forward Plan. This conviction is based on the fact that we have simplified the business by consolidating JVs, which also enabled us to execute the refinancing on Washington Square. Dispositions have reached a total of $1.1 billion. We completed the equity raise ahead of plan, raising $500 million. Refinancings are ahead of plan for $1 billion in total. We've locked in lease escalations that are a massive part of the expected lift. And lastly, efforts to secure new leases are well ahead of plan. All we have remaining to achieve the plan is $50 million of snow and completion of the remaining mall dispositions and givebacks, as well as the out-parcel sales. I'm confident our leasing and asset management teams can deliver on these two remaining pieces. In conclusion, we have exceptional talent here at Mace Ridge, and I'm pleased to see how well the team is collaborating using the tools and technology we've implemented. We are ahead of plan and have proven that we have the right process, strategies, and team in place with great retail centers that can drive rental rates with strong permanent occupancy. With that, I'll turn the call over to Doug.