Macerich Company (The)

Ladies and gentlemen, thank you for standing by. Welcome to the third quarter 2025 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 this session, you would need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. We do ask to please limit to one question and one follow-up. And to withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Alexandra Johnstone, Vice President of Finance and Investor Relations. Please go ahead.

Thank you for joining us on our third quarter 2025 earnings call. During this call, we will make 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 earnings results, supplemental, and our SEC filings. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in a supplemental filed on Form 8K with the SEC, which is posted in the investor section of the website at research.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, Senior Vice President of Portfolio Management. With that, I would like to turn the call over to Jack.

Thank you, Alexandra. We had another great quarter at Mace Rich as we've remained ahead of schedule on our path forward plan and well positioned to deliver on our 2028 targets. I want to thank everyone at Mace Rich for their continued contributions to our success. Today, I'll spend some time on the operational performance improvement pillar of our path forward plan. Then I'll have Doug and Dan speak to the state of our portfolio and leasing outlook, as well as the progress on the balance sheet. For the last few quarters, I've been talking about the momentum we've built up in our leasing efforts. This momentum has driven our confidence in hitting our 2028 targets and pursuing an incremental opportunity, such as the acquisition of Crabtree in June. I'll update you on that leasing while also providing some additional specifics that further demonstrate how well we're executing against the plan. During the third quarter, we signed 1.5 million square feet of new and renewal leases. which is an 87% increase from Q3 2024. This brings year-to-date signed leases in 2025 to 5.4 million square feet in the total portfolio, an 86% increase compared to the same period in 2024. That is well ahead of schedule on leasing volume, and we're executing on target for a market net effective rent assumptions used in our five-year plan. As we've stated on prior calls related to our leasing speedometer, which tracks revenue completion percentage for all new leasing activity in the five-year plan, our initial goal for new lease deals was 70% by year-end 2025. We're currently at 70% today. Our large pipeline of LOIs puts us on track for the 85% completion target by mid-2026. Turning to the snow pipeline, it has grown from 87 million in August to 99 million as of today, which again has put us on pace to meet or exceed our target of 100 million by year end. With the inclusion of Crabtree, we expect a total of 140 million of incremental snow. Of the remaining 40 million in snow left to achieve, roughly 90% is in our A, B, and C rated spaces. Another way to look at it is that 68% is in our fortress or fortress potential properties. In our path forward plan, The strategy around new deals is to improve permanent occupancy, which will enhance our thriving retail centers. We believe these new leases will improve merchandising mix, which improves traffic, generates higher sales and better productivity. This positions our portfolio to drive increased rents in 2028 and beyond once we have all the work done. In a moment, Doug will highlight several of the examples of our recent deals with retailers who are already having a tremendous positive impact on our centers. New deals approved by our Executive Leasing Committee, which reviews and approves deals on a biweekly basis, is up 61% from the same time last year and is more than all of the new deals approved in 2024. affirming the health of the overall retailer-landlord environment for best-in-class centers. We are also making tremendous progress on our anchor leasing initiatives. We have 30 anchors targeted to open between 2025 and 2028, of which 25 are committed to sporting goods, fashion, entertainment, grocery, and other retail uses. Releasing these vacant anchors is an important part of a path forward plan as they help with the permanent leasing in their respective wings, improving the merchandising mix, and most importantly, driving customer traffic into all time. As I've said in the past, I'm really excited about what we're doing with House of Sport in particular. We have nine committed locations with them. Dick's House of Sport had their grand opening at Freehold in the former Lord & Taylor box this past Friday. This, along with the recent opening of the Freehold Athletic Club and Dave & Buster's in the prior Sears wing joining Primark, has revitalized this center. Dick's has made the rollout of House of Sport a critical component of their growth plans. and have publicly stated they are creating the future of retail with this concept. They are quoting incremental traffic to a mall in the mid-teens percentage one year after a house of sport opens. And that's consistent with what we've analyzed. As I said last quarter, leasing momentum I've described today gave us the confidence to opportunistically pursue Crabtree Mall, which we believe will be a very compelling investment based on the early progress on leasing. One of the more important considerations in that acquisition was the opportunity to deploy our operating, leasing, and marketing platforms to invigorate leasing momentum and drive permanent occupancy to capture the embedded NOI growth potential. I believe our team has more than delivered on that front so far at Crabtree and we'll have more to share in the coming months. As we look ahead, we'll continue to evaluate potential new investment opportunities. That said, we'll remain patient and disciplined in terms of additional external growth. We are very focused on leasing, driving operational improvement throughout the portfolio, and hitting our deleveraging targets. Doug, why don't you take it from here?