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The Macerich Company (NYSE:MAC) (the "Company" or "Macerich"), a leading owner, operator and developer of major retail properties in top markets, today announced the acquisition of Crabtree Mall, a market-dominant, Class A retail center totaling approximately 1.3 million square feet in Raleigh, NC for $290 million.
"Crabtree checks all the boxes for pursuing opportunistic external growth with its strong traffic and sales, its market-dominant position in a high-growth market, the ability to drive improvements in permanent leasing and NOI as well as the accretion to our 2028 target FFO ranges under the Path Forward Plan," said Jack Hsieh, President and Chief Executive Officer, Macerich. "We have successfully de-risked the execution of the Path Forward Plan with 62% of our new lease deals achieved to date, placing us well ahead of schedule to reach 70% of the Path Forward leasing target by year-end 2025. We are on track with the operational performance improvement and asset sale components of the plan as well, positioning us to create additional value with the acquisition of this irreplaceable retail property."
Macerich expects an initial yield on the Crabtree acquisition of approximately 11% based on the property's estimated 2025 net operating income ("NOI") and an estimated yield of approximately 12.5% inclusive of current leases signed but not opened with rent expected to commence in 2027. Over the course of 2025 through 2028, the Company plans to implement a strategic investment plan at the property totaling approximately $60 million of new redevelopment and leasing capital to maximize the center's performance.
Macerich has funded the acquisition with cash on hand and $100 million of borrowings on its revolving line of credit. The Company expects to repay borrowings on the revolving line of credit within 30 days with the proceeds from an expected $160 million two-year term loan with two, one-year extension options that is expected to bear interest at SOFR plus 250 basis points. The expected financing of the acquisition is expected to keep the Company within its previously stated de-leveraging targets under the Path Forward Plan.
Posted In: MAC
