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Macerich (MAC) Sells La Encantada in Tucson, Reaps $100M

The Macerich Company MAC recently sold La Encantada, a retail asset in Tucson, AZ, for $165.3 million. The disposition of this open-air, 246,000-square-foot specialty center has helped the company generate around $100 million of incremental liquidity.

The transaction follows the March 2021 sale of 95% of the Paradise Valley Mall, a non-core asset in Phoenix, which helped the company yield roughly $95 million for the company. Such targeted disposition efforts are aimed at recycling capital into the major densification and diversification activities at the company’s top properties.

In fact, through the first nine months of the current year, the selling of its non-core assets has helped the company generate more than $200 million of liquidity. Moreover, Macerich is executing on a robust land and pad sale program, from which the company expects to generate an additional $100 million during 2021-2023.

Macerich’s move to realize the market value of this non-core asset comes as the retail landscape continues to evolve across the country. In fact, for the last few years, retail real estate landlords have been battling dwindling footfall, store closures and bankruptcy woes, and pandemic has further aggravated the situation, with the social-distancing wave accelerating the adoption of online purchases.

Nevertheless, the relaxations in restrictions continue to improve the operating conditions. Furthermore, widespread vaccinations and uplift in consumer confidence are buoying retailers’ businesses, in turn, backing the cash flows of the retail landlords. In addition, there is an increased momentum toward high-quality retail properties, and retail landlords who are able to beat the pandemic blues are capitalizing on such growth scopes.

Macerich too has been benefiting from the relaxations of the pandemic-related restrictions, and witnessing leasing demand from several categories and varieties of tenants. Therefore, the latest efforts aimed at supporting the densification and diversification activities at the top properties augur well for growth.

Shares of this Zacks Rank #3 (Hold) company have gained 30.5% over the past six months compared with the industry’s rally of 12.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Stocks to Consider

The Zacks Consensus Estimate for Simon Property Group’s SPG current-year FFO per share estimate has moved up 2.2% to $10.82 in the past month. The company carries a Zacks Rank of 2, currently.

Regency Centers Corporation REG holds a Zacks Rank of 2, at present. The Zacks Consensus Estimate for its 2021 FFO per share has been revised 4.2% upward to $3.70 in a month’s time.

The Zacks Consensus Estimate for SITE Centers Corp.’s SITC ongoing-year FFO per share has moved 2.8% north to $1.10 over the past month. The company carries a Zacks Rank of 2, currently.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Simon Property Group, Inc. (SPG): Free Stock Analysis Report
Macerich Company The (MAC): Free Stock Analysis Report
Regency Centers Corporation (REG): Free Stock Analysis Report
SITE CENTERS CORP. (SITC): Free Stock Analysis Report
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