The Macerich Company (MAC): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at The Macerich Company, which manages an $8.42 billion asset base, and right now, the retail real estate world is a pressure cooker as we head into late 2025. Honestly, even with a solid 93.4% portfolio occupancy in Q3 2025, the sector pressures are real, reflected in that $(87.4) million net loss for the quarter. To make smart decisions, you need to know where the leverage lies-is it with powerful anchor tenants, or is the threat from e-commerce substitutes going to win out? We've mapped out Michael Porter's five forces for The Macerich Company to give you a precise, analyst-grade view of the near-term risks and the hidden strengths in their prime locations, so keep reading to see the full breakdown.

The Macerich Company (MAC) - Porter's Five Forces: Bargaining power of suppliers

When looking at The Macerich Company's supplier landscape as of late 2025, you see a mixed bag of power dynamics across different supplier groups. For the physical assets-the 39 million square feet of real estate across 38 retail centers-the power of construction and maintenance vendors is generally kept in check. This is because The Macerich Company deals with numerous vendors for routine upkeep and project-based construction, which naturally fragments supplier power and keeps pricing competitive. Still, inflation definitely put pressure on these costs throughout 2024 and into 2025, as management noted.

However, the situation flips when you consider essential services like utilities. Utility providers often operate as regional monopolies or oligopolies, meaning The Macerich Company has very little choice in who supplies electricity, water, and gas to its centers. This lack of competition grants utility providers significant leverage to dictate terms and pass through cost increases, which is a constant operational risk.

The power of capital suppliers, or lenders, is best assessed by looking at the debt load. As of September 30, 2025, The Macerich Company reported $5.08 billion in mortgage notes payable. This substantial secured debt indicates a significant reliance on the debt markets, giving lenders moderate to high power, especially when refinancing is required or when loan terms are being negotiated, as seen with the expected technical default discussions on the South Plains property loan maturing in 2025. The total liabilities stood at $5.84 billion against total assets of $8.42 billion on that date.

Finally, the materials used in development and maintenance-things like steel, concrete, or standard fixtures-tend to be highly commoditized. Standardized building materials limit supplier product differentiation, meaning The Macerich Company can easily switch between suppliers for basic inputs without sacrificing quality or performance. This keeps the bargaining power of those specific material vendors relatively low.

Here's a quick look at the key financial context influencing supplier negotiations:

The influence of different supplier types on The Macerich Company's operations breaks down like this:

• Construction vendors: Leverage reduced by numerous options.
• Maintenance vendors: Power is generally low due to scale.
• Utility providers: High leverage due to regional monopolies.
• Capital suppliers: Moderate power due to $5.08 billion debt.
• Material suppliers: Low power due to standardized products.

If onboarding for major maintenance projects takes longer than expected, capital expenditure timing gets messy, which is a risk you need to watch closely.

The Macerich Company (MAC) - Porter's Five Forces: Bargaining power of customers

You're looking at The Macerich Company's customer power, and honestly, it's a push-pull situation. On one side, you have major tenants who historically hold sway, but on the other, The Macerich Company's high occupancy and strong leasing momentum give them a real upper hand as of late 2025.

Large anchor tenants, like department stores, have always commanded lower rents and more favorable lease terms because their presence drives traffic to the entire center. While The Macerich Company CEO Jack Hsieh mentioned making 'tremendous progress on our anchor leasing initiatives,' with 30 anchors targeted to open between 2025 and 2028, of which 25 are already committed to uses like sporting goods, fashion, and grocery, this signals a strong pipeline but doesn't negate the negotiation leverage these large spaces inherently carry. For context on the replacement of a major departure, The Macerich Company noted commitments on 74% of the square footage vacated by Forever 21, with the new tenants paying 'significantly more rent.'

Retailers, as customers, always have the alternative of shifting sales to their own e-commerce platforms, which puts a ceiling on how much rental rate pressure The Macerich Company can apply. Still, the demand for prime physical space is clearly present. Retailers are actively seeking prime locations, with notable new signings including Zara and Uniqlo at Tysons Corner Center, Alo Yoga, Abercrombie & Fitch, Aritzia, Rag & Bone, and Loro Piana across various prime properties. This trend underscores the 'flight to quality' driven by strong brands.

The Macerich Company's current operational metrics definitely strengthen its hand in leasing negotiations. High portfolio occupancy shows that demand for their specific, high-quality assets outstrips immediate supply. You see this clearly in the leasing spreads.

Here's the quick math on leasing performance as of September 30, 2025:

Regarding the inclination of existing tenants to stay, which is a direct measure of buyer switching costs, The Macerich Company is ahead of schedule in securing renewals for the near term. While the exact 2025 renewal rate wasn't specified, the progress on 2025 expirations is very strong, suggesting low switching inclination for core tenants.

• Commitments and Letters of Intent (LOIs) cover approximately 80% of 2025 expiring square footage.
• An additional 16% of 2025 expiring square footage is in the LOI stage.
• This means The Macerich Company has effectively addressed 96% of its 2025 lease expirations through commitments or active negotiation.
• The renewal retention rate for 2024 expirations was in the low 90% range.

To be fair, the 93.4% overall occupancy is down slightly year-over-year from 93.7% as of September 30, 2024, which shows some pressure, but the sequential improvement to 94.3% in the Go-Forward Portfolio and the positive 5.9% leasing spread indicate that when The Macerich Company does secure a new or renewed tenant, they are capturing higher rates. This pricing power suggests that for the right tenant in the right location, customer bargaining power is currently constrained by the high demand for The Macerich Company's premium assets.

The Macerich Company (MAC) - Porter's Five Forces: Competitive rivalry

The competitive rivalry facing The Macerich Company is high, stemming from direct competition within the Class A retail REIT space. You are competing head-to-head with established giants like Simon Property Group for market share, tenant quality, and investor perception. This rivalry isn't just about rent per square foot; it's a battle for dominance in creating premier, experience-driven retail destinations in the most attractive U.S. markets.

The pressure is evident in the recent financial outcomes. For the third quarter of 2025, The Macerich Company reported a net loss of $\mathbf{(\$87.4) \text{ million}}$, which, while an improvement from the $\mathbf{(\$108.2) \text{ million}}$ loss in the same period last year, still reflects the ongoing operational headwinds and sector pressures you are navigating. Still, the company is fighting back with strong leasing metrics.

Competition for desirable new tenants and the capital needed for redevelopment is fierce. Macerich's success in securing new business is a direct measure of its competitive standing. For instance, in Q3 2025, the company signed leases encompassing $\mathbf{1.5 \text{ million square feet}}$, an $\mathbf{81\%}$ to $\mathbf{87\%}$ increase year-over-year, showing momentum in capturing tenant demand. Furthermore, the $\mathbf{16\text{th}}$ consecutive quarter of positive base rent leasing spreads, coming in at $\mathbf{5.9\%}$ above expiring base rent for the trailing twelve months ended September 30, 2025, demonstrates pricing power against rivals.

The core of this rivalry centers on asset quality and strategic location. The Macerich Company's portfolio is concentrated in high-barrier-to-entry areas like California, the Pacific Northwest, Phoenix/Scottsdale, and the Metro New York to Washington, D.C. corridor, which are the same prime targets for competitors like Simon Property Group. You have to continuously invest to keep these properties ahead of the curve, which requires access to redevelopment capital. The company's proactive asset management, including Q3 2025 sales of Lakewood Center for $\mathbf{\$332 \text{ million}}$ and Atlas Park for $\mathbf{\$72 \text{ million}}$, helps manage capital structure while focusing on core assets.

Here's a look at how The Macerich Company's operational performance in Q3 2025 stacks up against key competitors on certain metrics:

The rivalry is also fought on the grounds of operational efficiency and portfolio health, which directly impacts your ability to fund future growth and maintain shareholder returns. You need to watch how your peers are managing their balance sheets and NOI growth:

• Portfolio tenant sales per square foot (spaces < 10k sq ft, TTM ended 9/30/2025): $\mathbf{\$867}$.
• Go-Forward Portfolio Centers Net Operating Income (NOI) increase (Y/Y Q3 2025): $\mathbf{1.7\%}$.
• Interest Expenses growth (Y/Y Q3 2025): $\mathbf{27.3\%}$ to $\mathbf{\$72.7 \text{ million}}$.
• Quarterly Dividend Amount: $\mathbf{\$0.17}$ per share.
• Stock Price (as of November 25, 2025): $\mathbf{\$16.52}$.

To compete effectively, The Macerich Company must continue to demonstrate superior asset management, as evidenced by its $\mathbf{39 \text{ million square feet}}$ portfolio across $\mathbf{38 \text{ retail centers}}$. The pressure is on to convert that high-quality physical footprint into consistent, positive net income, especially when competitors like Regency Centers reported FFO per share of $\mathbf{\$1.15}$ in the same period.

The Macerich Company (MAC) - Porter's Five Forces: Threat of substitutes

You're looking at the digital shift, and honestly, the numbers show why e-commerce is the primary substitute threat for The Macerich Company's physical assets. As of the second quarter of 2025, U.S. ecommerce accounted for 16.3% of total sales on a seasonally adjusted basis, according to the Commerce Department. That's up from an unadjusted 15.5% in the same period. The Macerich Company's portfolio occupancy as of September 30, 2025, stood at 93.4%, which is a slight dip from 93.7% a year prior, showing the constant pressure from these alternatives. Still, The Macerich Company is seeing strong tenant performance in its best spaces; tenant sales per square foot for spaces less than 10,000 square feet for the trailing twelve months ended September 30, 2025, reached $867, up from $834 year over year. It's a tale of two markets, really.

Here's a quick look at how the digital sales growth compares to The Macerich Company's leasing activity in Q3 2025:

Lifestyle centers and mixed-use developments are The Macerich Company's direct answer to the consumer desire for experiences over just transactions. You see this strategy baked into their development pipeline. For instance, plans are moving forward to re-envision the 25-acre outdoor village at FlatIron Crossing into a new, mixed-use entertainment district integrating multi-family, office, and hotel components. Also, at Green Acres, a transformation is underway that will bring 300,000 square feet of new entertainment, dining, and retail brands to the property. This focus on creating community cornerstones is a direct countermeasure to the convenience of staying home.

The defintely growing trend of adaptive reuse of older malls into non-retail, mixed-use property nationally supports The Macerich Company's strategy, even if their focus is on high-quality centers. Nationally, developers converted nearly 25K apartments from existing buildings in 2024, a 50% jump from 2023. Office conversions made up nearly 24% of those completed units in 2024. This broader market shift validates the capital allocation toward non-traditional uses within prime retail footprints, which The Macerich Company is doing selectively.

Consumers substituting trips with home delivery or BOPIS (buy-online-pick-up-in-store) is captured in the overall e-commerce growth, but The Macerich Company's leasing velocity shows that physical retail still captures significant demand. They signed leases encompassing 1.5 million square feet in Q3 2025 alone, an 81% increase in leased square footage signed year over year on a comparable center basis. That's real, tangible commitment from retailers.

• Leases signed in Q3 2025: 1.5 million square feet.
• Leasing speedometer progress: Currently at 70% toward the year-end 2025 goal.
• Sign Not Open (SNO) pipeline: Expanded to approximately $99 million.
• Positive base rent re-leasing spreads: 16th consecutive quarter.
• Liquidity position (as of Nov. 4, 2025): Around $1 billion.

The Macerich Company (MAC) - Porter's Five Forces: Threat of new entrants

You're looking at the barriers preventing a new, well-funded competitor from building a prime, Class A mall from scratch today. Honestly, the hurdles are immense, especially when you consider the capital required just to break ground on a modern facility.

Extremely high capital costs for acquiring and developing prime, large-scale retail sites.

New entrants face construction cost benchmarks that can range from $150 to $250 per square foot for modern retail centers. For a premium lifestyle center, which is what a new competitor would likely attempt to build to compete with The Macerich Company (MAC)'s assets, costs jump to between $420 to $580 per square foot. Considering The Macerich Company (MAC) owns 42.2 million square feet of gross leasable area, the scale of capital needed is staggering. Furthermore, material costs, like steel rebar, hovered around $912 per ton as of February 2025, and construction costs overall were predicted to rise between 5% and 7% in 2025. Redevelopment is the current play, as new ground-up development is often deemed too risky or expensive, with some estimates suggesting new construction costs could exceed $400 per square foot.

Significant regulatory hurdles and lengthy zoning approval processes.

Securing the necessary entitlements for a large-scale project is a multi-month, often multi-year, drain on capital and time. In some Florida jurisdictions, if a development permit requires a public hearing, the final decision deadline extends to 180 days after the application is deemed complete. In major markets like Chicago, large projects still rely on the Planned Development (PD) process for customized zoning. While Los Angeles is streamlining its code, reducing administrative steps from over 120 to approximately 60 in some projects as of mid-2025, the complexity remains market-dependent.

Existing Class A mall locations are essentially irreplaceable in dense, high-income markets.

The Macerich Company (MAC) has strategically concentrated its portfolio in irreplaceable trade areas, including California, the Pacific Northwest, Phoenix/Scottsdale, and the Metro New York to Washington, D.C. corridor. You simply cannot replicate the existing footprint of The Macerich Company (MAC)'s 29 consolidated regional malls and 10 unconsolidated regional malls. This scarcity value is reflected in the high performance of their existing assets; for instance, their go-forward portfolio sales were $905 per square foot at the end of Q3 2025, compared to the overall portfolio average of $849 per square foot over the prior twelve months ending June 2025.

New entrants face difficulty securing anchor tenants without an established portfolio.

The traditional anchor model is changing, but securing a high-traffic draw remains critical, and established landlords have the leverage. New entrants must compete against The Macerich Company (MAC)'s existing leasing momentum; they signed 5.4 million square feet of new and renewal leases year-to-date in 2025, an 86% increase compared to the same period in 2024. A new developer would struggle to offer the same stability, especially when The Macerich Company (MAC)'s leased occupancy stood at 93.4% as of September 30, 2025.

Here's a quick look at the financial scale of the existing portfolio versus the cost to build new, which illustrates the barrier:

The difficulty in entry is compounded by the shift in tenant strategy, meaning a new entrant must not only secure land but also curate a completely new, high-traffic tenant mix, which The Macerich Company (MAC) is actively managing through its existing pipeline:

• The Macerich Company (MAC) Q3 2025 Signed Not Open (SNO) pipeline target was set at $100 million by year-end.
• The Macerich Company (MAC) reported a 7.8% increase in Funds From Operations (FFO) attributable to common stockholders for Q3 2025.
• New store leases signed by The Macerich Company (MAC) in Q1 2025 were expected to produce gross revenue of approximately $80 million at their share over 2024's prior use revenue.
• The Macerich Company (MAC) is targeting $2 billion in mall dispositions, with $1.2 billion closed to date.