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Macerich Posts $66M Loss For 2022 As Occupancy Creeps Up

Santa Monica Place

An improved fourth quarter wasn't enough to pull Macerich out of the red for 2022, with the Santa Monica, California-based shopping center owner posting a full-year net loss of $66M.

In Q4, Macerich's net income was $1.7M, a significant improvement over the $17.1M loss it took in the same quarter of 2021. But the tailwinds that started lifting retailers toward the end of last year came too late to boost the company's annual earnings, which were down even as occupancy in its properties grew.

"The quarter continued to reflect retailer demand that is at a level that we have not seen since before the Great Financial Crisis," Macerich CEO Thomas O'Hern said in an earnings call Tuesday. 

Across its portfolio, Macerich saw year-end occupancy up to 92.6% from 91.5% at the end of 2021. 

New tenants run the gamut from food and beverage and entertainment to coworking, O'Hern said, but he offered no specifics about what led to the annual loss.

A $300M CMBS loan backed by Santa Monica Place was sent to special servicing in September, according to DBRS Morningstar data. The loan was originally taken out in 2017 with Wells Fargo, then securitized into a single-asset CMBS. 

Macerich secured a three-year extension on the loan in December, it told investors. The loan now matures in December 2025, and it has a balance of $296.5M with an effective interest rate of 6.19%.

The company kicked off 2023 with a win, however.

In January, Macerich announced that it had a tenant for the 48K SF at its Santa Monica Place mall that had been vacated by ArcLight Cinemas: ARTE Museum, an interactive digital art exhibition that was pioneered in South Korea and is anticipated to bring in over a million visitors a year. 

The project is part of a larger redevelopment planned for the shopping center that is expected to cost between $35M and $40M, Macerich told investors.

The new tenant at Santa Monica Place means that the only empty space left at the shopping center is a former Bloomingdale’s. Macerich said fitness and coworking spaces are planned as part of the redevelopment, but it wasn't clear which operators would take space or how much in the vacated department store. 

Related Topics: Macerich, Thomas O'Hern