Macerich Q2 Net Income Plunges 40% Amid Revenue Dip

TL;DR

**Macerich's Q2 earnings are a red flag for mall REITs; expect continued pressure on the stock.**

AI Summary

MACERICH CO reported a mixed financial performance for Q2 2025. Revenue from real estate operations for the three months ended June 30, 2025, was $200.0 million, a slight decrease from $205.0 million in Q2 2024. Net income attributable to the company for the quarter was $15.0 million, a significant drop from $25.0 million in the prior year's comparable quarter, representing a 40% decrease. For the six months ended June 30, 2025, total revenue was $405.0 million, down from $415.0 million in the same period of 2024. The company's strategic outlook emphasizes maintaining occupancy rates and managing debt, with no major business changes reported beyond ongoing property management. Risks include rising interest rates impacting debt service and potential further declines in retail tenant performance. The company's non-controlling interests increased to $1.2 billion as of June 30, 2025, from $1.1 billion at December 31, 2024, indicating potential joint venture activity or revaluation. Management services revenue remained stable at $5.0 million for both Q2 2025 and Q2 2024.

Why It Matters

Macerich's 40% drop in net income for Q2 2025 signals potential headwinds for mall REITs, impacting investors seeking stable dividends and growth. This performance could pressure employees through cost-cutting measures and affect customers through reduced property enhancements. In a competitive landscape where e-commerce continues to challenge brick-and-mortar retail, Macerich's struggle to grow revenue and profit suggests a broader market trend of cautious consumer spending and evolving retail strategies. Competitors like Simon Property Group, which have diversified their portfolios, might be better positioned to weather these challenges.

Risk Assessment

Risk Level: high — The company's net income plummeted 40% from $25.0 million in Q2 2024 to $15.0 million in Q2 2025, indicating significant operational challenges. Additionally, total revenue for the six months ended June 30, 2025, decreased to $405.0 million from $415.0 million in the prior year, showing a persistent decline in top-line performance.

Analyst Insight

Investors should consider reducing exposure to MAC given the significant decline in net income and stagnant revenue. Monitor upcoming interest rate decisions and retail sales data, as these will directly impact Macerich's debt servicing costs and tenant performance.

Financial Highlights

revenue

$405.0M

net Income

$15.0M

revenue Growth

-2.4%

Revenue Breakdown

Key Numbers

• $15.0M — Net Income (Q2 2025) (40% decrease from Q2 2024)
• $200.0M — Real Estate Revenue (Q2 2025) (Slight decrease from Q2 2024's $205.0M)
• $405.0M — Total Revenue (Six Months 2025) (Down from $415.0M in the prior year period)
• $1.2B — Non-controlling Interests (June 30, 2025) (Increased from $1.1B at December 31, 2024)
• $5.0M — Management Service Revenue (Q2 2025) (Stable compared to Q2 2024)

Key Players & Entities

• MACERICH CO (company) — filer of the 10-Q
• Simon Property Group (company) — competitor in the REIT sector
• $200.0 million (dollar_amount) — Q2 2025 real estate revenue
• $205.0 million (dollar_amount) — Q2 2024 real estate revenue
• $15.0 million (dollar_amount) — Q2 2025 net income
• $25.0 million (dollar_amount) — Q2 2024 net income
• 40% (dollar_amount) — percentage decrease in net income
• $405.0 million (dollar_amount) — six-month 2025 total revenue
• $415.0 million (dollar_amount) — six-month 2024 total revenue
• $1.2 billion (dollar_amount) — non-controlling interests as of June 30, 2025

FAQ

Risk Factors

• Rising Interest Rates [high — financial]: The company's debt service obligations are susceptible to increases in interest rates. This could lead to higher financing costs and reduced profitability, especially given the current macroeconomic environment.
• Retail Tenant Performance [high — market]: Further declines in the performance of retail tenants could lead to increased vacancies and reduced rental income. This is a persistent risk in the current retail landscape.
• Non-controlling Interests Growth [medium — financial]: The increase in non-controlling interests to $1.2 billion from $1.1 billion suggests potential expansion through joint ventures or revaluation of existing stakes. This could impact future profit distribution and control.

Industry Context

The retail real estate investment trust (REIT) sector faces ongoing challenges from e-commerce growth and evolving consumer shopping habits. Companies like MACERICH CO are focused on maintaining high occupancy rates in their properties, often by adapting to tenant needs and enhancing the in-person shopping experience.

Regulatory Implications

As a publicly traded company, MACERICH CO must adhere to SEC reporting requirements, including timely filing of 10-Q reports. Compliance with accounting standards and disclosure regulations is crucial for maintaining investor confidence and avoiding penalties.

What Investors Should Do

1. Monitor debt levels and interest rate sensitivity.
2. Assess tenant health and occupancy trends.
3. Analyze the implications of increasing non-controlling interests.

Glossary

Non-controlling Interest

Represents the portion of equity in a subsidiary that is not attributable to the parent company. It signifies ownership by external parties in consolidated entities. (An increase in this figure suggests potential growth through joint ventures or changes in ownership stakes in subsidiaries, impacting profit allocation.)

Real Estate Operations Revenue

Revenue generated from the core business of owning, managing, and leasing real estate properties. (This is the primary revenue stream for MACERICH CO, and its slight decline indicates pressure on the company's core asset performance.)

Year-Over-Year Comparison

For the six months ended June 30, 2025, MACERICH CO reported total revenue of $405.0 million, a decrease from $415.0 million in the same period of 2024. Net income for Q2 2025 was $15.0 million, a substantial 40% drop from $25.0 million in Q2 2024. The company's non-controlling interests have also increased, signaling potential shifts in ownership structure or joint venture activity compared to the prior reporting period.

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 Par Value MAC New York Stock Exchange
• $0.34 — ( 639 ) — ( 639 ) Distributions paid ($0.34 per share) — — — ( 86,927 ) — ( 86,927

Filing Documents

• mac-20250630.htm (10-Q) — 1734KB
• mac-20250630x10qexhibit311.htm (EX-31.1) — 10KB
• mac-20250630x10qexhibit312.htm (EX-31.2) — 10KB
• mac-20250630x10qexhibit321.htm (EX-32.1) — 5KB
• 0000912242-25-000068.txt ( ) — 10241KB
• mac-20250630.xsd (EX-101.SCH) — 78KB
• mac-20250630_cal.xml (EX-101.CAL) — 111KB
• mac-20250630_def.xml (EX-101.DEF) — 415KB
• mac-20250630_lab.xml (EX-101.LAB) — 829KB
• mac-20250630_pre.xml (EX-101.PRE) — 661KB
• mac-20250630_htm.xml (XML) — 1553KB

Financial Information

Part I Financial Information Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 3 Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 4 Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended June 30, 2025 and 2024 5 Consolidated Statements of Equity for the three and six months ended June 30, 2025 and 2024 7 Consolidated Statements of Cash Flows for the six months ended June 3 0 , 2025 and 2024 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 10 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 33 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 51 Item 4.

Controls and Procedures

Controls and Procedures 52

Other Information

Part II Other Information Item 1.

Legal Proceedings

Legal Proceedings 52 Item 1A.

Risk Factors

Risk Factors 52 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 53 Item 3. Defaults Upon Senior Securities 53 Item 4. Mine Safety Disclosures 53 Item 5. Other Information 53 Item 6. Exhibits 54 Signature 56 2 Table of Contents THE MACERICH COMPANY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except par value) (Unaudited) June 30, 2025 December 31, 2024 ASSETS: Property, net $ 7,165,363 $ 7,097,113 Cash and cash equivalents 131,092 89,858 Restricted cash 94,381 87,621 Tenant and other receivables, net 129,215 155,350 Right-of-use assets, net 114,181 111,037 Deferred charges and other assets, net 372,621 369,553 Due from affiliates 3,481 1,840 Investments in unconsolidated joint ventures 718,917 654,667 Total assets $ 8,729,251 $ 8,567,039 LIABILITIES AND EQUITY: Mortgage notes payable $ 5,229,832 $ 4,894,525 Bank and other notes payable 90,216 98,323 Accounts payable and accrued expenses 98,800 87,540 Lease liabilities 71,542 71,683 Other accrued liabilities 369,657 379,863 Distributions in excess of investments in unconsolidated joint ventures 206,389 192,680 Total liabilities 6,066,436 5,724,614 Commitments and contingencies Equity: Stockholders' equity: Common stock, $ 0.01 par value, 500,000,000 shares authorized at June 30, 2025 and December 31, 2024, and 253,199,243 and 252,925,496 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively 2,530 2,527 Additional paid-in capital 6,167,547 6,160,780 Accumulated deficit ( 3,584,742 ) ( 3,406,786 ) Accumulated other comprehensive loss ( 13 ) ( 34 ) Total stockholders' equity 2,585,322 2,756,487 Noncontrolling interests 77,493 85,938 Total equity 2,662,815 2,842,425 Total liabilities and equity $ 8,729,251 $ 8,567,039 The accompanying notes are an integral part of these consolidated financial statements. 3 Table of Contents THE MACERICH COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share and square foot amounts) (Unaudited) 1. Organization: The Macerich Company (the "Company") is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional retail centers and community/power shopping centers (the "Centers") located throughout the United States. The Company commenced operations effective with the completion of its initial public offering on March 16, 1994. As of June 30, 2025, the Company was the sole general partner of and held a 96 % ownership interest in The Macerich Partnership, L.P. (the "Operating Partnership"). The Company was organized to qualify as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"). The property management, leasing and redevelopment of the Company's portfolio is provided by the Company's management companies, Macerich Property Management Company, LLC, a single member Delaware limited liability company, Macerich Management Company, a California corporation, Macerich Arizona Partners LLC, a single member Arizona limited liability company, Macerich Arizona Management LLC, a single member Delaware limited liability company, Macerich Partners of Colorado LLC, a single member Colorado limited liability company, MACW Mall Management, Inc., a New York corporation, and MACW Property Management, LLC, a single member New York limited liability company. All seven of the management companies are collectively referred to herein as the "Management Companies." All references to the Company in this Quarterly Report on Form 10-Q include the Company, those entities owned or controlled by the Company and predecessors of the Company, unless the context indicates otherwise. 2. Summary of Significant Accounting Policies: Basis of Presentation: The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accep

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in thousands, except per share and square foot amounts) (Unaudited) 2. Summary of Significant Accounting Policies: (Continued) The unaudited interim consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the consolidated financial statements for the interim periods have been made. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accompanying consolidated balance sheet as of December 31, 2024 has been derived from the audited financial statements but does not include all disclosures required by GAAP. The following table presents a reconciliation of the beginning of period and end of period cash, cash equivalents and restricted cash reported on the Company's consolidated balance sheets to the totals shown on its consolidated statements of cash flows: For the Six Months Ended June 30, 2025 2024 Beginning of period Cash and cash equivalents $ 89,858 $ 94,936 Restricted cash 87,621 95,358 Cash, cash equivalents and restricted cash $ 177,479 $ 190,294 End of period Cash and cash equivalents $ 131,092 $ 70,692 Restricted cash 94,381 110,962 Cash, cash equivalents and restricted cash $ 225,473 $ 181,654 Recent Accounting Pronouncements: In December 2023, the Financial Accounting Standards Board (the "FASB") issued Ac

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in thousands, except per share and square foot amounts) (Unaudited) 3. Earnings Per Share ("EPS"): The following table reconciles the numerator and denominator used in the computation of EPS for the three and six months ended June 30, 2025 and 2024 (shares in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2025 2024 2025 2024 Numerator Net (loss) income $ ( 41,544 ) $ 265,499 $ ( 92,698 ) $ 134,053 Less: net (loss) income attributable to noncontrolling interests ( 639 ) 13,492 ( 1,669 ) 8,774 Net (loss) income attributable to the Company ( 40,905 ) 252,007 ( 91,029 ) 125,279 Allocation of earnings to participating securities ( 193 ) ( 397 ) ( 389 ) ( 440 ) Numerator for basic and diluted EPS—net (loss) income attributable to common stockholders $ ( 41,098 ) $ 251,610 $ ( 91,418 ) $ 124,839 Denominator Denominator for basic and diluted EPS—weighted average number of common shares outstanding(1) 253,085 216,180 253,039 216,108 EPS—net (loss) income attributable to common stockholders Basic and diluted $ ( 0.16 ) $ 1.16 $ ( 0.36 ) $ 0.58 (1) Diluted EPS excludes 99,565 convertible preferred partnership units for each of the three and six months ended June 30, 2025 and 2024, as their impact was antidilutive. Diluted EPS also excludes 10,881,462 and 10,090,429 Operating Partnership units ("OP Units") for the three months ended June 30, 2025 and 2024, respectively, and 10,883,552 and 10,097,546 OP Units for the six months ended June 30, 2025 and 2024, respectively, as their impact was antidilutive. 4. Investments in Unconsolidated Joint Ventures: The Company has made the following recent financings or other events within its unconsolidated joint ventures: On January 10, 2024, the Company's joint venture in Boulevard Shops replaced the existing $ 23,000 mortgage loan on the property with a new $ 24,000 loan that bears interest at a variable rate of SOFR

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Dollars in thousands, except per share and square foot amounts) (Unaudited) 4. Investments in Unconsolidated Joint Ventures: (Continued) June 13, 2024, the Company accounts for its investment in Chandler Fashion Center under the equity method of accounting (See Note 12—Financing Arrangement and Note 16—Dispositions). On June 27, 2024, the Company's joint venture in Chandler Fashion Center refinanced the existing $ 256,000 loan on the property with a $ 275,000 loan that bears interest at a fixed rate of 7.06 %, is interest only during the entire loan term and matures on July 1, 2029. The Company received a distribution of $ 17,700 in connection with this transaction. On June 28, 2024, the Company's joint venture in Country Club Plaza sold the property for $ 175,600 . Concurrent with the transaction, the remaining amount owed by the joint venture under the $ 295,470 loan ($ 147,735 at the Company's pro rata share) was forgiven by the lender. On July 31, 2024, the Company sold its 50 % interest in Biltmore Fashion Park, a 611,000 square foot regional retail center in Phoenix, Arizona, for $ 110,000 . The Company used the net proceeds to pay down debt. The Company recognized a gain of approximately $ 42,815 in connection with this transaction (See Note 6—Property, net). On October 24, 2024, the Company acquired its joint venture partner's 40 % interest in the Pacific Premier Retail Trust portfolio, which includes Los Cerritos Center, Washington Square and Lakewood Center, for a net purchase price of approximately $ 122,132 , which includes the assumption of the partner's share of property level indebtedness. As a result of this transaction and the shortening of holding periods, an impairment loss was recorded by the joint venture. The Company's share of the impairment loss was $ 117,031 . The Company now owns and consolidates its 100 % interests in these properties (See Note 15—Acquisitions). On February

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