The Macerich Company (NYSE:MAC) Q1 2023 Results Conference Call May 4, 2023 3:00 PM ET

Company Participants

Samantha Greening - Director of Investor Relations

Tom O'Hern - Chief Executive Officer

Scott Kingsmore - Senior Executive Vice President and Chief Financial Officer

Doug Healey - Senior Executive Vice President of Leasing

Conference Call Participants

Derek Johnston - Deutsche Bank

Greg McGinniss - Scotiabank

Samir Khanal - Evercore ISI

Floris Van Dijkum - Compass Point

Linda Tsai - Jefferies

Alex Goldfarb - Piper Sandler

Ki Bin Kim - Truist

Michael Mueller - JPMorgan

Ravi Vaidya - Mizuho

Caitlin Burrows - Goldman Sachs

Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Macerich First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question-and-answer session [Operator Instructions]. Please note that today’s conference maybe recorded.

I will now hand the conference over to your speaker host, Samantha Greening, Director of Investor Relations. Please go ahead.

Samantha Greening

Thank you for joining us on our first quarter 2023 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 filings, including the adverse impact of the novel coronavirus on the US, regional and global economies and the financial condition and results of operations of the Company and its tenants. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the earnings release and supplemental filed on Form 8-K with the SEC, which are posted on the Investors section of the company's Web site at macerich.com. Joining us today are Tom O'Hern, Chief Executive Officer; Scott Kingsmore, Senior Executive Vice President and Chief Financial Officer; and Doug Healey, Senior Executive Vice President of Leasing. And with that, I turn the call over to Tom.

Tom O'Hern

Thank you, Samantha. We are pleased to report another strong quarter with our operating results continuing to trend very positively. We again saw robust leasing demand with our first quarter volumes leased being better than the first quarter of last year. And just to remind you, leasing in 2022 was as good as it has been in a decade. Our portfolio average sales per foot for tenants under 10,000 square feet was $866 per foot, a 3% increase over a year ago. These strong results were achieved even in the very challenging macroeconomic climate we are facing today, including rising interest rates, the threat of a recession and the volatile banking and political environments. Some of the other first quarter results included occupancy at 92.2% that's a 90 basis point improvement from March of '22 and although a 40 basis points sequential quarter decline over year end, that is very normal. Over the past 15 years with only one or two exceptions occupancy has ticked down slightly from year end to the following March 31st. The range of decline is typically 40 to 100 basis points. We continue to see strong leasing volumes, which are in excess of last year's levels. For the quarter, we executed 256 leases for nearly a million square feet. Doug will provide more details in a few moments. Leasing spreads for the trailing 12 months ended March 31st were up 6.6%. Average rent per square foot at quarter end was nearly $64 and $63.98, that's a 2.1% increase over March of '22. We saw a very solid same center NOI growth of 4.8% in the first quarter and that compared to the first quarter of '22, which was a very strong quarter.