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Macerich Swings to Profit on Acquisitions, Rents

August 08, 2003|Roger Vincent | Times Staff Writer

Profit at Macerich Co. jumped into the black during the second quarter with earnings of $28.6 million as the Santa Monica-based shopping mall owner benefited from key acquisitions and rising rents.

Macerich earned 55 cents a share in the quarter ended June 30, the real estate investment trust said Thursday, compared with a loss of $1.3 million, or 4 cents, a year ago. Revenue rose 49% to $117.7 million.

Funds from operations, a key measure of profitability for REITs, rose 27% to $63.8 million, or 85 cents a share, beating a consensus of analysts' estimates by 2 cents, according to Thompson First Call.

"It's a great time to be in the mall business," said Los Angeles money manager Craig Silvers of Bricks & Mortar Capital, who does not own shares of Macerich. "Retail sales may be flat, but retailers have a lot of confidence that sales will get better. They're expanding and bringing out new concepts as quickly as possible."

Macerich signed 396,000 square feet of specialty store leases, while occupancy held steady at 93%. First-year rents for new tenants were 17% higher than expiring rents. Total same-center tenant sales were up 1.5% compared with a year ago.

Macerich bought Westcor, a Phoenix-based mall chain, last year.

Shares of Macerich rose 35 cents to $37.25 on the New York Stock Exchange.

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