The Macerich Co. (MAC), a real estate investment trust (REIT) focused on leasing regional and community shopping centers throughout the U.S., reported fourth quarter 2009 FFO (funds from operations) of $92.7 million or $0.90 per share, compared to $170.1 million or $1.92 per share in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
For full year 2009, Macerich reported FFO of $344.1 million or $3.70 per share, compared to $461.5 million or $5.22 per share in the previous year. Total revenues during fourth quarter 2009 were $201.3 million, compared to $243.2 million in the year-ago quarter. For full year 2009, revenues were $818.6 million, compared to $905.8 million in 2008.
Overall portfolio occupancy at year-end 2009 was 91.1% versus 92.3% in the year-ago period. Tenant sales decreased to $407 per square foot for the twelve-month period ended Dec 31, 2009, compared to $441 at year-end 2008. The decrease in tenant sales was primarily due to the continued economic downturn resulting in a cut in consumer discretionary spending.
Macerich continues its active development and redevelopment programs. The company recently announced deals with prime retailers for Santa Monica Place, a 570,000 square feet shopping mall in Santa Monica, CA. Santa Monica Place is scheduled to open in Aug 2010. During fourth quarter 2009, Macerich opened the new Northgate Mall, a 722,948 square feet property in Marin County, CA.
During the quarter, Macerich sold eight non-core properties totaling $73 million in net proceeds. For full year 2009, the company sold 25 non-core assets for net proceeds of $151 million. Also during the quarter, Macerich issued 13.8 million shares raising net proceeds of $383 million. For full year 2009, the company reduced its overall debt by $1.36 billion by utilizing proceeds from asset sale and equity issuance.
Macerich is one of the largest operators of regional and community shopping centers in the U.S., with assets in high barrier-to-entry markets that have fared relatively well despite a challenging market. The company also has a strong balance sheet with adequate liquidity and minimal debt maturities. Consequently, Macerich is better placed than most of its peers to withstand the recession.
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