Macerich Q2: Leasing momentum and FFO rise, GAAP loss from impairments amid high debt

The Macerich Company (NYSE: MAC) - Q2 2025 quick read

What's happening inside: Macerich is executing its "Path Forward" - continuing asset sales, selective acquisitions and refinancing - while showing stronger leasing activity but reporting a GAAP loss driven by impairments, higher depreciation and elevated interest costs.

Key facts & statistics (straightforward)
* Total revenues Q2 2025: $249,793k vs Q2 2024: $215,521k
* Leasing revenue Q2 2025: $232,725k (up from $197,961k)
* Net loss attributable to company Q2 2025: $(40,905)k vs net income $252,007k in Q2 2024
* (Loss) / gain on sale or write-down of assets Q2 2025: $(10,484)k vs $324,996k in Q2 2024
* Depreciation & amortization Q2 2025: $88,500k (six months: $181,062k)
* Interest expense (other) Q2 2025: $71,925k; total interest (six months) $140,999k
* EPS (basic/diluted) Q2 2025: $(0.16) vs Q2 2024: $1.16
* FFO (three months) - attributable to common stockholders & unit holders: $83,977k; adjusted FFO excl. certain items: $87,294k
* Total assets (6/30/25): $8,729,251k; cash & equivalents: $131,092k; restricted cash: $94,381k (total cash + restricted: $225,473k)
* Mortgage notes payable (6/30/25): $5,229,832k (up from $4,894,525k at 12/31/24)
* Total liabilities: $6,066,436k; total equity: $2,662,815k; accumulated deficit: $(3,584,742)k
* Shares outstanding (reported Aug 8, 2025): 252,751,307 shares

Positive aspects of the income statement / operations
* Strong operational leasing: leasing revenue rose 17.6% YoY in Q2 (to $232.7M); releasing spreads remain positive (leasing momentum and 15 consecutive quarters of positive base rent spreads).
* FFO - adjusted (six months) improved: adjusted FFO (ex. certain financing and non-cash items) for six months = $174,666k, up vs prior year - shows underlying cash-generative core business.
* Cash generation: operating cash flow for six months provided $159,010k; company increased liquidity (cash + restricted cash $225.5M).
* Active portfolio management: continued dispositions (Wilton, SouthPark, others) and one material acquisition (Crabtree Mall for $290,000k) - management is reshaping the portfolio.

Negative aspects of the income statement / risks
* GAAP loss driven by non-cash items: Q2 net loss of $(40.9M) driven by impairments/write-downs and higher depreciation & amortization ($88.5M) and losses on certain property sales.
* Interest expense jump: interest up materially (six-month interest $141.0M), reflecting higher rates and higher debt balances; mortgage notes payable increased to $5.23B.
* Equity in loss of unconsolidated JVs: while improved YoY, prior-year impairments materially distorted comparables and remain a source of volatility.
* Leverage and maturities: significant long-term debt secured by properties; although management expects to refinance near-term maturities, Santa Monica Place remains a defaulted non‑recourse loan and is a headline risk.
* Accumulated deficit widened to $(3.585B); book equity down vs 12/31/24.

Liquidity & near-term catalysts to watch
* Revolver availability (6/30/25): ~$549.4M; $100M drawn at 6/30/25 (subsequently repaid from Crabtree financing per subsequent events).
* Recent financing: closed $340M 10‑yr loan on Washington Square (3/27/25); acquired Crabtree Mall (6/23/25) for $290M funded with cash + $100M revolver advance.
* Dividend policy: quarterly cash dividend $0.17 per share (announced July 31, 2025).
* Path Forward: plan to deleverage Net Debt/Adjusted EBITDA over 3-4 years via dispositions, selective acquisitions and operational gains - execution will determine credit trajectory.

Bottom line (straightforward)
Macerich is showing clear leasing and FFO momentum beneath the headline GAAP loss. The loss is largely non‑cash and tied to asset revaluations and higher depreciation following consolidation and portfolio moves. Main investor focus should be: execution of the Path Forward (asset sales vs acquisitions), interest‑cost trajectory and successful refinancing of maturities. If management can convert leasing momentum into sustained FFO growth while trimming net debt, valuation pressure from high leverage and near‑term headline assets (e.g., Santa Monica Place) should moderate. For now, operating fundamentals are improving but balance‑sheet risk and interest expense remain the primary watch items.