The Macerich Company (MAC), a fully-integrated real estate investment trust (REIT), reported second quarter 2010 FFO (funds from operations) of $77.5 million or 57 cents per share, compared with $59.9 million or 67 cents in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. The reported FFO for the second quarter of 2010 missed the Zacks Consensus Estimate by 4 cents.
Total revenues during the quarter were $181.9 million, compared with $205.9 million in the year-ago period. Total revenue for the reported quarter well exceeded the Zacks Consensus Estimate of $171 million.
Overall portfolio occupancy at quarter-end was 91.8% versus 90.5% in the year-ago period. Mall tenant sales increased 3.3% during the quarter to $420 per square foot for the twelve-month period ended June 30, 2010, primarily due to the gradual revival of the overall economy. Same-store net operating income also increased 2.0% year over year.
Macerich continued its active development and redevelopment programs. During the quarter, the company completed the expansion and relocation of a 138,000-square foot Nordstrom center and a 35,000-square foot shopping center in California.
Subsequent to the quarter-end, Macerich opened a 524,000-square foot open-air shopping mall in Santa Monica, California. The property is 92% leased and is anchored by prime retailers, such as Nordstrom Inc. (JWN) and Tiffany & Co (TIF).
During the quarter, Macerich issued 31 million shares raising net proceeds of over $1.2 billion. The company also refinanced property loans worth $364 million during the quarter. Consequently, Macerich has $118 million of mortgage debt maturing in the remainder of 2010. At quarter-end, Macerich had cash and cash equivalents of $596.7 million and total debt of $4.9 billion.
Currently, we maintain our Neutral rating on Macerich with a Zacks #3 Rank, which translates into a short-term ‘Hold’ recommendation and indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1-3 months.
NORDSTROM INC (JWN): Free Stock Analysis Report
MACERICH CO (MAC): Free Stock Analysis Report
TIFFANY & CO (TIF): Free Stock Analysis Report
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