The Macerich Company (NYSE:MAC) Q4 2022 Earnings Call Transcript

Scott Kingsmore: Yes, sure. Every case is specific. If you look at Santa Monica Place, it’s an asset where there’s still a fair amount of leasing to be accomplished. We talked about the Arte Museum with a couple of other names, hopefully, to be announced in the near future. If you were to look, Craig Realty, at taking that asset to market, the outcome would have been dramatically different. So an extension was very efficient for us. It resulted in no repayment of the loan proceeds. Again, that’s 1 isolated example. But generally, the extensions have been very efficient from both a liquidity standpoint as well as a rate standpoint. Frankly, if you step back and look at what’s happened historically, if you look at the Fed funds chart, when the Fed has increased rates, there’s typically been a fairly significant falloff of those rates shortly thereafter.

So if you think about extensions for 3 to 4 years, not only is it efficient in the moment, it’s very efficient from a rate standpoint because you’re not locking yourself into higher rates for a longer period.

Tom O’Hern: So it’s combining not just what we expect in terms of rate, but also taking a look at the inverted yield curve and trying to find the right duration. And if you combine those, you end up with a 3- to 5-year term seems to work best for us, and that’s the strategy we’ve pursued.

Scott Kingsmore: And then if you look forward, we do have some financings that we do think we’ll be able to get accomplished. A couple of the highlights for the balance of the year. We’ll be financing Tysons Corner towards the end of the year, obviously, a marquee asset for us. And we think that should very well likely be an incremental liquidity event for the company. And we attempted to finance Danbury Fair last year. The markets closed up on a couple of different occasions. I think it’s very realistic to assume over the next several months that we could get that asset financed. It’s got an awful lot going for it, trending in the right direction from an occupancy and absorption standpoint. So I think that’s a financing we’ll be able to get accomplished here within probably the next couple of quarters.

Operator: And we have reached the end of the question-and-answer session. I’ll now turn the call back over to Tom O’Hern for closing remarks.

Tom O’Hern : Thank you for joining us today. Again, we’re pleased to report a strong conclusion of 2022, and we look forward to reporting to you over the coming year as 2023 unfolds.

Operator: And this concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.