Better malls, still too much debt
- Macerich owns interests in 38 shopping centers with about 39 million square feet of space.
- Tenant sales improved, with comparable sales up 3.8% for small-shop tenants in the trailing year through Q1 2026.
- Occupancy was 93.4% at March 31, 2026, up from last year but down from 94.0% at year-end 2025.
- Adjusted FFO grew 2.9% in Q1 2026, much slower than the 8.7% growth reported for full-year 2025.
- Debt is the main problem: total outstanding loan indebtedness was $6.45 billion at March 31, 2026.
Good stores, tight balance sheet
The bull case starts with the malls themselves. Macerich still owns well-located retail centers in dense markets. Comparable tenant sales for spaces under 10,000 square feet rose 3.8% in the trailing twelve months through Q1 2026, and occupancy was 80 basis points higher than a year earlier. That says shoppers and tenants have not walked away from the core portfolio.
Management is also reshaping the company. The Path Forward Plan aims to cut leverage, invest in key assets, sell weaker assets, and buy or consolidate better ones. In 2025 Macerich acquired Crabtree Mall, and after Q1 2026 it acquired Annapolis Mall for $260.0 million plus a nearby vacant Sears parcel for $12.0 million. If those moves lift the quality of the portfolio and occupancy moves back above 94%, the stock could get credit for better assets.
The bear case is still the balance sheet. Total outstanding loan indebtedness was $6.45 billion at March 31, 2026, only modestly lower than the $6.65 billion reported at the end of 2024. Adjusted FFO grew only 2.9% in Q1 2026, after growing 8.7% in full-year 2025. That slowdown raises a real question: are earnings still recovering, or has the recovery stalled?
The newest data makes Finn cautious. The 93.4% occupancy rate was better than a year ago, but it fell 60 basis points from year-end 2025. Macerich needs to prove that drop was temporary, while also resolving the defaulted Santa Monica Place and Twenty Ninth Street loans without extra damage.
Rent from retail space
Macerich is a real estate investment trust, or REIT. A REIT owns income-producing real estate and must pay out much of its taxable income as dividends. Macerich makes most of its money by leasing space in regional malls and shopping centers.
Tenants pay base rent. Some also pay percentage rent tied to sales. Tenants also reimburse Macerich for items such as operating costs, property taxes, and utilities. This model works when stores sell enough goods to keep paying rent and when open space can be leased at fair prices.
The weak point is capital. Malls need money for tenant improvements, redevelopment, and refinancing. Macerich expects to spend $75.0 million to $100.0 million over the next twelve months on tenant allowances and deferred leasing charges, plus $275.0 million to $325.0 million on development, redevelopment, expansion, and renovations. That is a heavy load for a company already carrying high debt.
The moat is location. Strong malls in California, New York, Arizona, and other dense markets can act like town centers, not just shopping boxes. But if consumers pull back, tenants fail, or lenders demand harsher terms, that moat can narrow fast.
What Macerich owns
Regional retail centers
This is the core business. As of March 31, 2026, Macerich owned or had interests in 37 regional retail centers.
Community and power center
The portfolio includes one community or power shopping center. This is a small part of the total property base.
Go-Forward Portfolio Centers
Management has named a focused group of centers it wants to keep and build around. These assets are meant to drive the next stage of the Path Forward Plan.
Redevelopment projects
Projects at Scottsdale Fashion Square, Green Acres Mall, and FlatIron Crossing aim to turn old space into better retail, food, residential, and mixed-use space. These can create value, but they also require cash.
Non-core assets and land parcels
Macerich has sold malls, land parcels, and outparcels to simplify the portfolio and raise cash. The open question is whether sales can reduce leverage enough, not just shrink the company.
Joint venture centers
Some centers are partly owned with partners and reported through unconsolidated joint ventures. These give Macerich exposure to important assets, but they can make debt and cash flow harder to read.
Mostly leasing revenue
The Q1 2026 mix uses MD&A revenue lines. Macerich reports leasing revenue as the main line, with Management Companies revenue much smaller, so this is an operating revenue view rather than a formal multi-segment split.
What could go wrong
Debt stays too high
High impact · High oddsTotal outstanding loan indebtedness was $6.45 billion at March 31, 2026. That debt uses cash that could otherwise go to redevelopment, dividends, or buying better assets. The Path Forward Plan needs visible deleveraging, not only asset sales and refinancing.
Occupancy rolls over
High impact · Medium oddsOccupancy was 93.4% at March 31, 2026. That was up from 92.6% a year earlier, but down from 94.0% at December 31, 2025. A second sequential decline would make the recovery look fragile.
Tenant bankruptcies hit rent
Medium impact · Medium oddsMacerich has already dealt with bankruptcies from tenants such as Forever 21, Claire's, and Saks Global LLC. In Q1 2026, year-to-date bankruptcies involved 14 leases, about 182,000 square feet, and about $3.1 million of annual leasing revenue at the company's share. More failures could leave empty boxes and lower rent.
Defaulted assets create surprise costs
High impact · Medium oddsMacerich defaulted on the $300.0 million non-recourse loan on Santa Monica Place in 2024 and a joint venture defaulted on the Twenty Ninth Street loan in February 2026. Handing back keys can protect corporate cash when debt is non-recourse, but it still signals asset-level stress. The final legal and financial result matters.
Redevelopment costs outrun returns
Medium impact · Medium oddsLarge projects can improve old malls, but they need major cash upfront. Macerich expects $275.0 million to $325.0 million of development, redevelopment, expansion, and renovation spending over the next twelve months. If tenants open late or rents disappoint, returns could lag while debt remains high.
In one breath
What does Macerich do?
Macerich owns, manages, and leases shopping centers in the United States. Most of its income comes from rent and tenant reimbursements at regional retail centers.
Why is Macerich risky?
The biggest risk is debt. Macerich had $6.45 billion of total outstanding loan indebtedness at March 31, 2026, and it still needs capital for leasing, refinancing, and redevelopment.
Is Macerich's mall portfolio improving?
There are signs of improvement. Comparable tenant sales rose 3.8% in the trailing year through Q1 2026, but occupancy fell from 94.0% at year-end 2025 to 93.4% at March 31, 2026.
What should investors watch next?
Watch occupancy, adjusted FFO growth, total debt, and the final outcomes for Santa Monica Place and Twenty Ninth Street. Those items will show whether the Path Forward Plan is really working.