Breaking Down The Macerich Company (MAC) Financial Health: Key Insights for Investors

You're looking at The Macerich Company (MAC) and wondering if the retail real estate investment trust (REIT) is finally stabilizing, but the latest Q3 2025 numbers paint a complex picture that demands a careful look at the balance sheet. Honestly, the market is grappling with a classic 'good-news, bad-news' scenario: on one hand, the core business is showing resilience, with Go-Forward Portfolio Net Operating Income (NOI) rising a solid 1.7% year-over-year to $178.8 million, plus they locked in a 5.9% base rent re-leasing spread for the trailing twelve months, which shows real pricing power in their top-tier malls. But still, the significant headwind of higher interest rates is hitting hard; Q3 2025 interest expenses ballooned by 27.3%, which is a massive jump, and that pressure helped push Funds From Operations (FFO) to just $0.35 per share, missing consensus estimates. The key is mapping how their $1 billion in liquidity and asset sales-like the $332 million from Lakewood Center-will counter the $5.23 billion in mortgage notes payable, especially as portfolio occupancy dipped slightly to 93.4%.

Revenue Analysis

You're looking at The Macerich Company (MAC) and the revenue picture is honestly much stronger than the narrative often suggests. The core takeaway is that leasing activity is driving a solid rebound, pushing the trailing twelve months (TTM) revenue to $1.03 billion as of Q3 2025. That's a powerful number that shows their Class A mall strategy is working, even with retail headwinds.

The company's revenue is overwhelmingly rooted in its leasing activities, which is typical for a retail real estate investment trust (REIT). The primary revenue streams break down into four key components, with minimum rents being the anchor. Here's the quick math on the most recent quarterly data, which shows where the money is really coming from:

• Minimum Rents: This is the base rent, the most reliable income. It accounted for about 62.2% of Q2 2025 revenue, totaling $155.47 million.
• Tenant Recoveries: Reimbursements from tenants for operating expenses like property taxes and maintenance, making up roughly 26.7%, or $66.83 million, in Q2 2025.
• Percentage Rents: A small but important slice-rent based on a percentage of the tenant's sales above a certain threshold. This segment saw a significant year-over-year jump of +43.8% in Q2 2025, reaching $4.15 million.
• Management Companies: Revenue from managing properties for others, which is a smaller segment that saw a slight dip of -12.4% in Q2 2025 to $5.94 million.

The year-over-year growth rate is defintely a bright spot. Quarterly revenue growth has been consistently strong, with Q3 2025 hitting $253.3 million, a 15% increase from the prior year. This isn't just a one-off; Q2 2025 revenue also climbed 15.9% year-over-year. The momentum is clear: tenants are paying more, and occupancy is rising.

What this growth hides is the massive effort on the leasing front. The Macerich Company (MAC) is executing on its 'Path Forward Plan,' evidenced by the 16th consecutive quarter of positive re-leasing spreads, which hit +5.9% on a TTM basis as of Q3 2025. This means when a lease expires and is renewed or a new tenant comes in, the rent is higher. Also, the Signed Not Open (SNO) pipeline-leases signed but not yet generating revenue-has grown to nearly $99 million in incremental revenue, putting the company on track to meet or exceed its $100 million year-end target. That future revenue is already locked in. To be fair, you should also look at the capital structure and who is betting on this turnaround by reading Exploring The Macerich Company (MAC) Investor Profile: Who's Buying and Why?

The table below summarizes the key revenue components and their contribution for Q2 2025, showing where the revenue power lies.

The significant change in the revenue mix is the outsized growth in percentage rents, a sign that the retail tenants in Macerich's high-quality malls are seeing better sales, which directly benefits the landlord. That's a solid indication of improving underlying retail health in their portfolio.

Next step: Finance needs to model the impact of that $99 million SNO pipeline on 2026 FFO projections by the end of the month.

Profitability Metrics

You're looking at The Macerich Company (MAC) because you want to know if their operational pivot is translating to real profit, and honestly, the numbers show a mixed bag of impressive gross margins and a persistent net loss. This isn't a simple story of a company making money; it's a deep dive into a turnaround strategy.

In the trailing twelve months (TTM) leading up to the end of Q3 2025, The Macerich Company maintained a strong Gross Profit Margin of approximately 64.60%. That's a testament to the core business-renting out high-quality mall space-where the cost of goods sold (COGS) is minimal. But here's the quick math: that high gross profit gets eaten alive by other costs, especially interest expense on their debt.

The Operating Profit Margin (which is Earnings Before Interest and Taxes, or EBIT, margin) for the TTM through Q3 2025 stood at 30.04%. This is a decent operational result, but the real pain point is the bottom line. The Net Profit Margin for Q3 2025 was a negative 34.49%, resulting in a net loss of $87.4 million for the quarter.

• Gross Margin: 64.60% (TTM Q3 2025)
• Operating Margin: 30.04% (TTM Q3 2025)
• Net Margin: -34.49% (Q3 2025)

Profitability Trends and Industry Reality

The trend in profitability is one of slow, difficult recovery. While the company is still posting net losses, the Q3 2025 net loss of $87.4 million was actually an improvement from the prior year's loss. The challenge is that their Net Profit Margin of roughly -37.97% is dramatically worse than the REIT industry median Net Margin, which sits around 43.595%. This gap is huge and highlights the cost of carrying their significant debt load and the non-cash charges common in real estate (like depreciation and impairment), which drag net income down.

To be fair, the company is making progress where it counts operationally. Net Operating Income (NOI) for the Go-Forward Portfolio Centers-the malls they plan to keep-increased by 1.7% in Q3 2025 year-over-year, and nearly 2% year-to-date. That's a solid, if unspectacular, move in the right direction for core performance. You can dig deeper into who is betting on this turnaround by Exploring The Macerich Company (MAC) Investor Profile: Who's Buying and Why?

Operational Efficiency and Cost Management

Operational efficiency is where The Macerich Company is defintely showing its strength, even if the net profit doesn't reflect it yet. The key is in their leasing and cost management. The management team has been ahead of schedule on their 'Path Forward' plan, focusing on operational performance improvement. They've been effective in cost management, which contributed to an earnings per share surprise in Q2 2025.

The leasing momentum is especially strong. The Macerich Company signed 5.4 million square feet of new and renewal leases year-to-date in 2025, which is an 86% increase compared to the same period in 2024. More importantly, the positive leasing spreads-meaning the new rent is higher than the old rent for the same space-were strong at 10.5% as of mid-2025. This shows they are getting significantly more rent for their space, which directly bolsters the gross margin and NOI.

Here's how MAC's key operational metrics compare to the industry, which tells a more nuanced story than just the net loss:

The high Net Debt to EBITDA ratio of 7.9x is the elephant in the room. It means that while the company is operating its malls efficiently and signing great leases, the massive interest expense from the debt load is what keeps the Net Profit Margin deep in the red. The operational efficiency is there; the financial structure is the headwind.

Debt vs. Equity Structure

The Macerich Company (MAC) operates with a highly leveraged capital structure, which isn't unusual for a Real Estate Investment Trust (REIT) but is aggressive even by industry standards. You need to look past the total debt number and see how they are actively managing it.

As of September 2025, The Macerich Company's total debt is substantial, sitting at approximately $5.15 billion, with the vast majority being long-term debt and capital lease obligations ($5,147 million). The good news is that their short-term debt and capital lease obligation for the same period was essentially nil, at $0 million. This means near-term liquidity risk is lower, but the long-term refinancing wall remains a key concern for investors.

Here's the quick math on their leverage:

• Total Debt (Sep 2025): $5,147 million
• Total Stockholders Equity (Sep 2025): $2,511 million

The Macerich Company's debt-to-equity (D/E) ratio is currently around 2.05. To be fair, REITs generally carry more debt because their assets-malls and real estate-are capital-intensive and often financed with mortgages. Still, this 2.05 ratio is significantly higher than the Retail REIT industry average, which is closer to 1.043 as of early 2025. A D/E ratio this high signals that the company has been defintely aggressive in using debt to fund its growth and operations, which increases the risk profile for equity holders.

The company is actively balancing this high leverage through its 'Path Forward' plan, which prioritizes deleveraging. This isn't just talk; they are using a combination of asset sales and strategic refinancing.

The goal is clear: reduce the Net Debt-to-EBITDA ratio, which stood at 7.76x in Q3 2025, down a full turn from the start of the program. They are swapping out older, sometimes variable-rate, debt for new, fixed-rate, longer-term debt, like the $340 million loan at a fixed 5.58% rate. Plus, they've used at-the-market (ATM) equity issuance, selling an additional $50 million in stock, to chip away at the debt load. This mix of asset sales, refinancing, and minor equity funding shows a realistic, action-oriented approach to managing their capital structure. You can read more about this in our full analysis: Breaking Down The Macerich Company (MAC) Financial Health: Key Insights for Investors

Liquidity and Solvency

You're looking at The Macerich Company (MAC) and wondering if they have enough short-term cash to cover their bills, which is a fair question for a REIT navigating a tough retail and interest rate environment. The direct takeaway is that while MAC has managed to secure a significant liquidity cushion, their core operating ratios signal a persistent structural liquidity challenge that requires continued asset sales to manage.

Let's start with the classic liquidity positions: the current and quick ratios. These ratios are defintely low, which is typical for a capital-intensive real estate investment trust (REIT) but still flags a risk. As of the most recent data, The Macerich Company's (MAC) Current Ratio sits at approximately 0.45, and the Quick Ratio is even tighter at about 0.37.

• Current Ratio of 0.45 means MAC has only 45 cents in current assets for every dollar of current liabilities.
• Quick Ratio of 0.37 shows that without inventory, the position is only marginally worse.

Cash Flow: The Real Story of Liquidity

For a REIT like The Macerich Company (MAC), the cash flow statement often tells a more complete story than the balance sheet ratios, especially when looking at their ability to generate cash from operations. The TTM data ending September 30, 2025, shows a positive trend in core cash generation, which is a strength.

Here's the quick math on their cash flow trends (TTM Sep 2025, in millions):

• Operating Cash Flow (CFO): $326.27 million. This is the cash generated from the core business of leasing and managing malls, and it's up from the prior fiscal year.
• Investing Cash Flow (CFI): $-269.01 million (calculated as: Acquisitions of Real Estate Assets of $-553.56M + Sale of Real Estate Assets of $284.55M). This negative number is driven by significant asset acquisitions but is partially offset by the company's disposition strategy.
• Financing Cash Flow (CFF): $105 million. This positive flow is critical and shows the company is actively raising capital to manage its debt structure.

Near-Term Risks and Actionable Strengths

The Macerich Company (MAC) is in a clear deleveraging cycle, selling non-core assets to pay down debt. This is a clear action you want to see. In the third quarter of 2025 alone, MAC sold three malls-Atlas Park, Lakewood Center, and Valley Mall-for a total of $426 million in proceeds. This capital is crucial for maintaining their immediate liquidity, which stood at approximately $1 billion as of November 4, 2025, including $650 million of available capacity on their revolving line of credit.

However, a significant risk remains: refinancing risk. Management has acknowledged approximately $1 billion in loan maturities coming due in 2026. Plus, there's one remaining ~$200 million loan maturing in 2025 at South Plains that is expected to be in technical default, requiring an extension or resolution. This is the core challenge: using asset sales and operating cash flow to tackle a large debt wall. You can read more about their strategic direction here: Mission Statement, Vision, & Core Values of The Macerich Company (MAC).

Valuation Analysis

You're looking at The Macerich Company (MAC), a major retail real estate investment trust (REIT), and trying to figure out if the market has priced it fairly. The short answer is that Wall Street sees it as a 'Hold,' which means they think the stock is trading close to its intrinsic value right now, but the underlying metrics paint a more complex picture of a company in transition.

The average 12-month price target from analysts is around $19.87, which suggests a modest upside from the recent trading price near $16.59 as of late November 2025. This consensus rating of 'Hold' is based on a split of 13 firms: five 'Buy' ratings, five 'Hold' ratings, and three 'Sell' ratings.

Is The Macerich Company (MAC) Overvalued or Undervalued?

When we dig into the core valuation multiples, we see the typical complexity of a REIT still working through a challenging environment. Because The Macerich Company reported negative earnings per share (EPS) in the trailing twelve months, the traditional Price-to-Earnings (P/E) ratio is negative. However, analysts are looking ahead, and the forward P/E ratio is estimated at a more palatable 10.70, which is defintely below the market average.

For a real estate business, the Price-to-Book (P/B) ratio and the Enterprise Value-to-EBITDA (EV/EBITDA) ratio are often more telling. Here's the quick math:

• Price-to-Book (P/B): The ratio stands at approximately 1.69. This means the stock trades at a premium to its net asset value, suggesting investors see value in the portfolio's quality and future cash flow potential.
• Enterprise Value-to-EBITDA (EV/EBITDA): The latest twelve months (LTM) EV/EBITDA is around 15.7x. For a retail REIT, this is a bit on the higher side compared to some peers, reflecting the company's high leverage (debt-to-equity ratio is near 1.99) which is factored into the Enterprise Value calculation.

This high EV/EBITDA tells you that the market is willing to pay a premium for the company's operating cash flow (EBITDA), but a good chunk of that value is tied up in the debt structure. You need to keep a close eye on their debt disposition program, which is targeted for completion by 2026.

Stock Price and Dividend Health

The stock price trend over the last 12 months (52-week period) has been volatile. The Macerich Company stock has traded within a wide range, from a low of $12.48 to a high of $22.27. The recent closing price near $16.59 represents a decline of nearly 14.79% over the past 52 weeks, indicating that the market has been cautious.

For income-focused investors, the dividend is crucial. The Macerich Company's annual dividend is currently set at $0.68 per share, translating to an attractive dividend yield of approximately 4.02% as of November 2025. However, the sustainability of this dividend is a nuanced discussion.

Here's how the dividend coverage looks:

While the dividend is technically covered by cash flow, the negative GAAP earnings and the high debt-to-equity ratio mean you should treat this dividend with a degree of caution. The company is in a turnaround, showing strong leasing momentum-signing 1.5 million square feet of new and renewal leases in Q3 2025-but macroeconomic uncertainty still poses a risk.

You can dive deeper into the institutional interest and trading dynamics by Exploring The Macerich Company (MAC) Investor Profile: Who's Buying and Why?

Risk Factors

You're looking at The Macerich Company (MAC) and wondering where the landmines are hidden, which is smart. The direct takeaway is that while operational momentum is strong, the company's financial health is still heavily exposed to high leverage and the immediate need to refinance debt in a high-rate environment. This is a classic real estate investment trust (REIT) turnaround story; the operational fix is working, but the balance sheet remains the primary risk.

The biggest near-term risk is financial: the company's high leverage. As of the end of Q3 2025, the Net Debt to Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) stood at a high 7.76x. Management's goal is to get this down to the low-to-mid 6x range over the next few years, but that means a lot of execution still needs to happen. Plus, rising interest rates or tightening credit conditions could defintely intensify the pressure on their refinancing efforts.

Operational and Financial Risks: The Debt Wall and Occupancy Friction

The Macerich Company faces a dual challenge: managing a heavy debt load while navigating the transitional friction of re-tenanting its properties. On the debt side, the most concrete risk is a looming maturity. There is one remaining 2025 maturing loan for approximately $200 million at South Plains, which is expected to be in technical default at maturity, though discussions for an extension are ongoing. Also, the Santa Monica Place loan is already in default, with a court-appointed receiver managing the expected disposition of the asset.

On the operational front, the company is dealing with frictional downtime (vacancies) as it replaces older, struggling tenants with better ones. For example, the re-tenanting of former Forever 21 spaces created a near-term drag on Net Operating Income (NOI). To be fair, this is a strategic move, but it still shows up as a loss in the short run. The total portfolio occupancy as of September 30, 2025, was 93.4%, which is solid, but the re-leasing process is costly and takes time.

Here's a quick look at the Q3 2025 financials that highlight the pressure:

Mitigation and The Path Forward Plan

The company's strategy, called the Path Forward Plan, is designed to tackle these risks head-on by simplifying the business and reducing leverage. This isn't just talk; they are executing on two clear fronts: asset sales and aggressive leasing.

• Deleveraging via Dispositions: The company is making substantial progress on its disposition plan, with asset sales approaching $1.2 billion toward a total target of $2 billion by the end of 2026. This cash is essential for paying down debt and fortifying the balance sheet.
• Operational Excellence: They are ahead of schedule on leasing volume. Year-to-date signed leases in 2025 total 5.4 million square feet, an 86% increase over the same period in 2024. More importantly, 74% of the vacated Forever 21 space is already committed to new, better brands paying significantly more rent.
• Leasing Pipeline: The Signed-Not-Open (SNO) pipeline is strong, sitting at approximately $99 million in incremental revenue, right on pace to meet or exceed the $100 million year-end target. This pipeline is future NOI growth locked in today.

They have a clear path, but the execution risk remains high until that Net Debt/EBITDA ratio moves closer to their target. For a deeper dive into the valuation and strategic frameworks, you can check out the full post: Breaking Down The Macerich Company (MAC) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking for a clear map of where The Macerich Company (MAC) goes from here, especially with the debt load still a concern. The direct takeaway is that their future growth hinges less on new construction and more on executing their Exploring The Macerich Company (MAC) Investor Profile: Who's Buying and Why? 'Path Forward' plan: simplifying the business, reducing leverage, and driving higher rents from their premium mall portfolio.

The company's strategic focus is on maximizing the value of its Class A assets-the 'Fortress' and 'Steady Eddie' properties-by aggressively re-leasing space at higher rates. Honestly, this is the core engine. For the 2025 fiscal year, the consensus revenue projection is around $931.51 million, with an estimated FFO (Funds From Operations) of $1.49 per share. What this estimate hides is the timing of new leases coming online, which is the real upside.

Key Growth Drivers: Leasing and Redevelopment

The Macerich Company's near-term revenue growth is defintely driven by its leasing velocity. They are ahead of schedule on their leasing targets, which is a massive operational win. They signed 4.3 million square feet in leases as of September 2025, surpassing initial goals. The trailing 12-month re-leasing spreads were a healthy 10.9% as of Q1 2025, meaning new leases are coming in significantly higher than the expiring ones. That's a clean one-liner: Higher rents on prime real estate drive the recovery.

This strong leasing feeds directly into their Signed Not Occupied (SNO) pipeline, which is the future revenue already locked in. Here's the quick math: the cumulative SNO pipeline stands at approximately $80 million in incremental annual rent, with about $25 million of that expected to impact the 2025 results. This is a clear runway for Net Operating Income (NOI) growth into 2026 and 2027.

• Leasing Momentum: Signed 4.3 million sq. ft. of leases as of Q3 2025.
• SNO Pipeline: Cumulative incremental rent of ~$80 million.
• Re-leasing Spreads: Averaging 10.9% higher than old rents.

Strategic Initiatives and Competitive Edge

The strategic initiatives are all about simplification and modernization. The company is actively executing a disposition plan, targeting $2 billion in asset sales to reduce debt, with $1.2 billion in mall sales completed as of September 2025. This deleveraging (reducing the company's debt) is critical to derisking the investment. Plus, they are strategically consolidating joint venture (JV) assets, such as the full acquisition of Arrowhead Towne Center and South Plains Mall, to gain 100% control over high-performing properties.

Their competitive advantage is rooted in the quality of their portfolio. They own Class A malls in affluent, densely populated US markets, which attracts premier retailers and generates high sales per square foot (PSF). For the core portfolio, tenant sales are around $900 PSF, which is a key metric showing the dominance of these locations. They are also investing in experiential retail (e.g., entertainment anchors like Pindustry and Dick's House of Sport) and redevelopments like Green Acres on Long Island to drive foot traffic and future rent growth.

The company's commitment to sustainability, evidenced by its 10th consecutive #1 GRESB ranking among North American retail REITs, is also a soft competitive advantage (environmental, social, and governance, or ESG) that appeals to institutional capital. The mid-2026 inflection point is what management is targeting as the point when these initiatives fully translate to positive earnings momentum.

Next Step: Finance: track the conversion rate of the $80 million SNO pipeline into realized revenue each quarter to gauge operational execution.