MACERICH CO

Previous wording

The Company is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community/power shopping centers located throughout the United States. The Company is the sole general partner of, and owns a majority of the ownership interests in, The Macerich Partnership, L.P. (the "Operating Partnership"). As of June 30, 2024, the Operating Partnership owned or had an ownership interest in 42 regional retail centers (including office, hotel and residential space adjacent to these shopping centers), three community/power shopping centers and one redevelopment property. These 46 regional retail centers, community/power shopping centers and one redevelopment property consist of approximately 45 million square feet of gross leasable area ("GLA") and are referred to herein as the "Centers". The Centers consist of consolidated Centers ("Consolidated Centers") and unconsolidated joint venture Centers ("Unconsolidated

Current wording

The Company is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community/power shopping centers located throughout the United States. The Company is the sole general partner of, and owns a majority of the ownership interests in, The Macerich Partnership, L.P. (the "Operating Partnership"). As of September 30, 2024, the Operating Partnership owned or had an ownership interest in 41 regional retail centers (including office, hotel and residential space adjacent to these shopping centers), three community/power shopping centers and one redevelopment property. These 45 regional retail centers, community/power shopping centers and one redevelopment property consist of approximately 45 million square feet of gross leasable area ("GLA") and are referred to herein as the "Centers". The Centers consist of consolidated Centers ("Consolidated Centers") and unconsolidated joint venture Centers ("Unconsolidated

Previous wording

The following discussion is based primarily on the consolidated financial statements of the Company for the three and six months ended June 30, 2024 and 2023. It compares the results of operations for the three months ended June 30, 2024 to the results of operations for the three months ended June 30, 2023. It also compares the results of operations and cash flows for the six months ended June 30, 2024 to the results of operations and cash flows for the six months ended June 30, 2023.

Current wording

The following discussion is based primarily on the consolidated financial statements of the Company for the three and nine months ended September 30, 2024 and 2023. It compares the results of operations for the three months ended September 30, 2024 to the results of operations for the three months ended September 30, 2023. It also compares the results of operations and cash flows for the nine months ended September 30, 2024 to the results of operations and cash flows for the nine months ended September 30, 2023.

Previous wording

property in Los Angeles, California, for $700.0 million. The existing $324.6 million loan on the property was repaid, and $77.6

Current wording

On December 27, 2023, the Company’s joint venture in One Westside sold the property, a 680,000 square foot office property in Los Angeles, California, for $700.0 million. The existing $324.6 million loan on the property was repaid, and $77.6

Previous wording

On June 28, 2024, the Company sold a former department store parcel at Valle Vista Mall in Harlingen, Texas for $7.1 million. The Company used the net proceeds to pay down debt (See "Liquidity and Capital Resources").

Current wording

On June 28, 2024, the Company sold a former department store parcel at Valle Vista Mall in Harlingen, Texas for $7.1 million. The Company used the net proceeds to pay down debt. The Company recognized a gain on sale of assets of $0.8 million (See "Liquidity and Capital Resources" and Note 16—Dispositions in the Notes to the Consolidated Financial Statements).

Previous wording

On July 31, 2024, the Company sold its 50% interest in Biltmore Fashion Park, a 611,000 square foot regional retail center in Phoenix, Arizona, for $110.0 million. The Company used the net proceeds to pay down debt (See "Liquidity and Capital Resources").

Current wording

On July 31, 2024, the Company sold its 50% interest in Biltmore Fashion Park, a 611,000 square foot regional retail center in Phoenix, Arizona, for $110.0 million. The Company used the net proceeds to pay down debt. As a result of this transaction, the Company recognized a gain of $42.8 million (See "Liquidity and Capital Resources" and Note 4—Investments In Unconsolidated Joint Ventures in the Notes to the Consolidated Financial Statements).

Previous wording

For the three and six months ended June 30, 2024, the Company and certain joint venture partners sold various land parcels in separate transactions, resulting in the Company’s share of the gain on sale of land of $1.3 million. The Company’s proceeds from these sales in the three and six months ended June 30, 2024 were $2.5 million. The Company used its share of the proceeds from these sales to pay down debt and for other general corporate purposes.

Current wording

For the three and nine months ended September 30, 2024, the Company and certain joint venture partners sold various land parcels in separate transactions, resulting in the Company’s share of the gain on sale of land of $0.3 million and $1.6 million, respectively. The Company’s proceeds from these sales in the three and nine months ended September 30, 2024 were $0.9 million and $3.4 million, respectively. The Company used its share of the proceeds from these sales to pay down debt and for other general corporate purposes.

Previous wording

On September 11, 2023, the Company and Operating Partnership entered into an amended and restated credit agreement, which amended and restated their prior $525 million credit agreement, and provides for an aggregate $650 million revolving loan facility that matures on February 1, 2027, with a one-year extension option. Concurrently with the entry into the amended and restated credit agreement, the Company drew $152 million of the amount available under the revolving loan facility and used the proceeds to repay in full amounts outstanding under the Company’s prior credit facility. (See “Liquidity and Capital Resources”).

Current wording

On September 11, 2023, the Company and Operating Partnership entered into an amended and restated credit agreement, which amended and restated their prior $525.0 million credit agreement, and provides for an aggregate $650.0 million revolving loan facility that matures on February 1, 2027, with a one-year extension option. Concurrently with the entry into the amended and restated credit agreement, the Company drew $152.0 million of the amount available under the revolving loan facility and used the proceeds to repay in full amounts outstanding under the Company’s prior credit facility. (See “Liquidity and Capital Resources”).

Previous wording

The Company’s joint venture in Scottsdale Fashion Square, a 1,871,000 square foot regional retail center in Scottsdale, Arizona, is redeveloping a two-level Nordstrom wing with luxury-focused retail and restaurant uses. The total cost of the project is estimated to be between $84.0 million and $90.0 million, with $42.0 million and $45.0 million estimated to be the Company’s pro rata share. The Company has incurred $23.4 million of the total $46.8 million incurred by the joint venture as of June 30, 2024. The anticipated opening will be in phases beginning in 2024, with completion in 2025.

Current wording

The Company’s joint venture in Scottsdale Fashion Square, a 2,117,000 square foot regional retail center in Scottsdale, Arizona, is redeveloping a two-level Nordstrom wing with luxury-focused retail and restaurant uses. The total cost of the project is estimated to be between $84.0 million and $90.0 million, with $42.0 million to $45.0 million estimated to be the

Previous wording

The Company is redeveloping the northeast quadrant of Green Acres Mall, a 2,058,000 square foot regional retail center in Valley Stream, New York. The project will include new exterior shops and facade totaling approximately 385,000 square feet of leasing, including new grocery use, redevelopment of a vacant anchor building and demolition of another vacant anchor building. The total cost of the project is estimated to be between $120.0 million and $140.0 million. The Company has incurred approximately $14.0 million as of June 30, 2024. The anticipated opening is in 2026.

Current wording

The Company is redeveloping the northeast quadrant of Green Acres Mall, a 2,062,000 square foot regional retail center in Valley Stream, New York. The project will include new exterior shops and facade totaling approximately 385,000 square feet of leasing, including new grocery use, redevelopment of a vacant anchor building and demolition of another vacant anchor building. The total cost of the project is estimated to be between $120.0 million and $140.0 million. The Company has incurred approximately $17.1 million as of September 30, 2024. The anticipated opening is in 2026.

Previous wording

The Company’s joint venture in FlatIron Crossing, a 1,393,000 square foot regional retail center in Broomfield, Colorado, is developing luxury, multi-family residential units, new/repurposed retail and food and beverage uses, and a community plaza, in addition to the redevelopment of the vacant former Nordstrom store located on the property. The Company's ownership percentage is expected to be 43.4% in the residential portion of the development and 51% in the remainder of the property. The total cost of the project is estimated to be between $240.0 million and $260.0 million, with $120.0 million and $130.0 million estimated to be the Company’s pro rata share. The Company has incurred $6.6 million of the total $13.0 million incurred by the joint venture as of June 30, 2024. The anticipated opening is in 2027.

Current wording

The Company’s joint venture in FlatIron Crossing, a 1,391,000 square foot regional retail center in Broomfield, Colorado, is developing luxury, multi-family residential units, new/repurposed retail and food and beverage uses, and a community plaza, in addition to the redevelopment of the vacant former Nordstrom store located on the property. The Company's ownership percentage is expected to be 43.4% in the residential portion of the development and 51% in the remainder of the property. The total cost of the project is estimated to be between $240.0 million and $260.0 million, with $120.0 million to $130.0 million estimated to be the Company’s pro rata share. The Company has incurred $7.8 million of the total $15.3 million incurred by the joint venture as of September 30, 2024. The anticipated opening is in 2027.

Previous wording

The Company declared a cash dividend of $0.17 per share of its common stock for each quarter of 2023 and the first two quarters of 2024. On July 26, 2024, the Company announced a third quarter cash dividend of $0.17 per share of its common stock, which will be paid on September 9, 2024 to stockholders of record on August 19, 2024. The dividend amount will be reviewed by the Board on a quarterly basis.

Current wording

The Company declared a cash dividend of $0.17 per share of its common stock for each quarter of 2023 and the first three quarters of 2024. On October 31, 2024, the Company announced a fourth quarter cash dividend of $0.17 per share of its common stock, which will be paid on December 2, 2024 to stockholders of record on November 12, 2024. The dividend amount will be reviewed by the Board on a quarterly basis.

Previous wording

In connection with the commencement of an “at the market” offering program on March 26, 2021, which is referred to as the “ATM Program,” the Company entered into an equity distribution agreement with certain sales agents pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $500 million. As of June 30, 2024, the Company had approximately $151.7 million of gross sales of its common stock available under the ATM Program.

Current wording

In connection with the commencement of an “at the market” offering program on March 26, 2021, which is referred to as the “ATM Program,” the Company entered into an equity distribution agreement with certain sales agents pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $500 million. The ATM Program was fully utilized as of September 30, 2024 and is no longer active.

Previous wording

Most of the leases at the Centers have rent adjustments periodically throughout the lease term. These rent increases are either in fixed increments or based on using an annual multiple of increases in the Consumer Price Index. In addition, the routine expiration of leases for spaces 10,000 square feet and under each year enables the Company to replace existing leases with new leases at higher base rents if the rents of the existing leases are below the then existing market rate. The Company has generally entered into leases that require tenants to pay a stated amount for operating expenses, generally excluding property taxes, regardless of the expenses actually incurred at any Center, which places the burden of cost control on the Company. Additionally, most leases require the tenants to pay their pro rata share of property taxes and utilities. Inflation is expected to have a negative impact on the Company's costs in 2024.

Current wording

Most of the leases at the Centers have rent adjustments periodically throughout the lease term. These rent increases are either in fixed increments or based on using an annual multiple of increases in the Consumer Price Index. In addition, the routine expiration of leases for spaces 10,000 square feet and under each year enables the Company to replace existing leases with new leases at higher base rents if the rents of the existing leases are below the then existing market rate. The Company has generally entered into leases that require tenants to pay a stated amount for operating expenses, generally excluding property taxes, regardless of the expenses actually incurred at any Center, which places the burden of cost control on the Company. Additionally, most leases require the tenants to pay their pro rata share of property taxes and utilities. Inflation has had a negative impact on the Company's costs in 2024.

Previous wording

The Company recorded its financing arrangement (See Note 12—Financing Arrangement in the Company's Notes to the Consolidated Financial Statements) obligation at fair value on a recurring basis with changes in fair value being recorded as interest expense in the Company’s consolidated statements of operations. The fair value was determined based on a discounted cash flow model, with the significant unobservable inputs including discount rate, terminal capitalization rate, and market rents. The fair value of the financing arrangement obligation is sensitive to these significant unobservable inputs and a change in these inputs may result in a significantly higher or lower fair value measurement.

Current wording

The Company recorded its financing arrangement (See Note 12—Financing Arrangement in the Company's Notes to the Consolidated Financial Statements) obligation at fair value on a recurring basis with changes in fair value being recorded as interest expense in the Company’s consolidated statements of operations. The fair value was determined based on a discounted cash flow model, with the significant unobservable inputs including discount rate, terminal capitalization rate, and market rents. The fair value of the financing arrangement obligation was sensitive to these significant unobservable inputs and a change in these inputs may result in a significantly higher or lower fair value measurement.

Previous wording

For the comparison of the three and six months ended June 30, 2024 to the three and six months ended June 30, 2023, the JV Transition Centers are Arrowhead Towne Center, Chandler Fashion Center, South Plains Mall and the five former Sears parcels located at Chandler Fashion Center, Danbury Fair Mall, Freehold Raceway Mall, Los Cerritos Center and Washington Square (See “Acquisitions” in Management’s Overview and Summary). The Disposition Properties are The Marketplace at Flagstaff, Superstition Springs Power Center, Towne Mall and a former department store parcel at Valle Vista Mall (See "Dispositions" in Management’s Overview and Summary). For the comparison of the three and six months ended June 30, 2024 to the three and six months ended June 30, 2023, the Redevelopment Properties are Green Acres Mall and Fashion District Philadelphia.

Current wording

For the comparison of the three and nine months ended September 30, 2024 to the three and nine months ended September 30, 2023, the JV Transition Centers are Arrowhead Towne Center, Chandler Fashion Center, South Plains Mall and the five former Sears parcels located at Chandler Fashion Center, Danbury Fair Mall, Freehold Raceway Mall, Los Cerritos Center and Washington Square (See “Acquisitions” in Management’s Overview and Summary). The Disposition Properties are The Marketplace at Flagstaff, Superstition Springs Power Center, Towne Mall and a former department store parcel at Valle Vista Mall (See "Dispositions" in Management’s Overview and Summary). For the comparison of the three and nine months ended September 30, 2024 to the three and nine months ended September 30, 2023, the Redevelopment Properties are Green Acres Mall and Fashion District Philadelphia.

Previous wording

During the trailing twelve months ended June 30, 2024, comparable tenant sales for spaces less than 10,000 square feet across the portfolio decreased by 1.1% relative to the second quarter of 2023. The leased occupancy rate of 93.3% at June 30, 2024 represented a 0.7% increase from 92.6% at June 30, 2023 and a 0.1% sequential decrease compared to the 93.4% occupancy rate at March 31, 2024. Releasing spreads increased as the Company executed leases at an average rent of $63.35 for new and renewal leases executed compared to $57.54 on leases expiring, resulting in a releasing spread increase of $5.81 per square foot, or 10.1%, for the trailing twelve months ended June 30, 2024. This was the Company’s eleventh consecutive quarter of positive base rent leasing spreads.

Current wording

During the trailing twelve months ended September 30, 2024, comparable tenant sales for spaces less than 10,000 square feet across the portfolio decreased by 1.0% relative to the third quarter of 2023. The leased occupancy rate of 93.7% at September 30, 2024 represented a 0.3% increase from 93.4% at September 30, 2023 and a 0.4% sequential increase compared to the 93.3% occupancy rate at June 30, 2024. Releasing spreads increased as the Company executed leases at an average rent of $66.98 for new and renewal leases executed compared to $59.86 on leases expiring, resulting in a releasing spread increase of $7.13 per square foot, or 11.9%, for the trailing twelve months ended September 30, 2024. This was the Company’s twelfth consecutive quarter of positive base rent leasing spreads.

Previous wording

2024 lease expirations continue to be an important focal point for the Company. As of June 30, 2024, the Company has executed renewal leases or commitments on 76% of its square footage expiring in 2024, which leases are expected to commence throughout 2024 and another 18% of such expiring space is in the letter of intent stage. Excluding those leases, the remaining leases expiring in 2024, which represent approximately 181,000 square feet of the Centers, are in the prospecting stage. The Company continues to renew or replace leases that are scheduled to expire in 2024, however, due to a variety of factors, the Company cannot be certain of its ability to sign, renew or replace leases expiring in 2024 or beyond.

Current wording

The Company continues to renew or replace leases that are scheduled to expire in 2024, however, due to a variety of factors, the Company cannot be certain of its ability to sign, renew or replace leases expiring in 2024 or beyond. As of September 30, 2024, the Company has executed renewal leases or commitments on 84% of its square footage expiring in 2024, which leases are expected to commence throughout 2024 and another 13% of such expiring space is in the letter of intent stage. Excluding those leases, the remaining leases expiring in 2024, which represent approximately 96,000 square feet of the Centers, are in the prospecting stage.

Previous wording

The Company has entered into 184 leases for new stores totaling approximately 1.5 million square feet that have opened or are planned for opening in 2024, and another 33 leases for new stores totaling approximately 994,000 square feet opening throughout 2025 and 2026. In total, new store leases are expected to produce incremental rent of approximately $71.4 million (at the Company’s pro rata share) in excess of the rent generated from prior uses in the same spaces. While there may be additional new space openings in 2024, any such leases are not yet executed.

Current wording

The Company has entered into 225 leases for new stores totaling approximately 1.6 million square feet that have opened or are planned for opening in 2024, and another 79 leases for new stores totaling approximately 1.2 million square feet opening throughout 2025 and 2026. In total, through 2027, new store leases are expected to produce incremental rent of approximately $79.8 million (at the Company’s pro rata share) in excess of the rent generated from prior uses in the same spaces. While there may be additional new space openings in 2024, any such leases are not yet executed.

Previous wording

During the quarter ended June 30, 2024, the Company signed 61 new leases and 172 renewal leases comprising approximately 750,000 square feet of GLA. The average tenant allowance was $18.40 per square foot.

Current wording

During the quarter ended September 30, 2024, the Company signed 70 new leases and 150 renewal leases comprising approximately 831,000 square feet of GLA. The average tenant allowance was $24.31 per square foot.

Previous wording

The Company may achieve these goals through a variety of methods and the timing, extent and impact of any transactions that the Company has or will undertake while implementing the Path Forward Plan are indeterminable at this time. In order to deleverage its capital structure, the Company may pursue asset dispositions and acquisitions, experience organic growth in EBITDA as properties in its lease pipeline open for business, be selective about undertaking new development and redevelopment projects, and/or issue common stock. Asset sales will focus on whether a property is core to the Company’s strategy and may include defaulting on certain mortgage debts on the Company’s properties and giving possession of such secured properties to the lender.

Current wording

The Company may achieve these goals through a variety of methods and the timing, extent and impact of any transactions that the Company has or will undertake while implementing the Path Forward Plan are indeterminable at this time. In order to deleverage its capital structure, the Company may pursue asset dispositions and acquisitions, experience organic growth in EBITDA as tenants in its lease pipeline open for business, be selective about undertaking new development and redevelopment projects, and/or issue common stock. Asset sales will focus on whether a property is core to the Company’s strategy and may include defaulting on certain mortgage debts on the Company’s properties and giving possession of such secured properties to the lender.

Previous wording

Further, the Company has a long-term four-pronged business strategy that focuses on the acquisition, leasing and management, redevelopment and development of regional retail centers. Although the majority of the key performance indicators at the Centers continued to improve during the first half of 2024, operating results in 2024 have been and are expected to continue to be negatively impacted by certain external factors, including any increase in inflation and elevated interest rates, as well as the impact from the recent bankruptcy of Express and any future tenant bankruptcies.

Current wording

Further, the Company has a long-term four-pronged business strategy that focuses on the acquisition, leasing and management, redevelopment and development of regional retail centers. Although the majority of the key performance indicators at the Centers continued to improve during the first three quarters of 2024, operating results in 2024 have been and are expected to continue to be negatively impacted by certain external factors, including any increase in inflation and elevated interest rates, as well as the impact from the recent bankruptcy of Express and any future tenant bankruptcies.

Previous wording

Traffic levels at the Company’s Centers for the first half of 2024 increased by 4.6% from 2023 levels for the same time period. Portfolio tenant sales per square foot from spaces less than 10,000 square feet for the trailing twelve months ended June 30, 2024 were $835 compared to $836 for the year ended December 31, 2023. Comparable tenant sales from spaces less than 10,000 square feet across the portfolio for the quarter ended June 30, 2024 decreased by 0.4% compared to the same period in 2023.

Current wording

Traffic levels at the Company’s Centers for the first three quarters of 2024 increased by 1.6% from 2023 levels for the same time period. Portfolio tenant sales per square foot from spaces less than 10,000 square feet for the trailing twelve months ended September 30, 2024 were $834 compared to $836 for the year ended December 31, 2023. Comparable tenant sales from spaces less than 10,000 square feet across the portfolio for the quarter ended September 30, 2024 decreased by 1.8% compared to the same period in 2023.

Previous wording

During 2023, the Company signed 839 new and renewal leases for approximately 4.2 million square feet, compared to 963 leases and 3.8 million square feet signed during 2022. This leasing volume represented a 13% decrease in the number of leases and a 12% increase in the amount of square footage leased compared to the same period in 2022 on a comparable basis, and was the highest volume leasing year in the Company’s history. During the second quarter of 2024, the Company signed 233 leases for approximately 750,000 square feet, compared to 188 leases and 1.4 million square feet leased during the second quarter of 2023, representing a 47% decrease in the amount of square footage leased and a 24% increase in the number of leases signed on a comparable center basis. The decline was primarily due to unusually heavy leasing activity in the second quarter of 2023 from a multi-lease renewal with a major national retailer covering a significant amount of space, as well as several larger format space within the same period.

Current wording

During 2023, the Company signed 839 new and renewal leases for approximately 4.2 million square feet, compared to 963 leases and 3.8 million square feet signed during 2022. This leasing volume represented a 13% decrease in the number of leases and a 12% increase in the amount of square footage leased compared to the same period in 2022 on a comparable basis, and was the highest volume leasing year in the Company’s history. During the third quarter of 2024, the Company signed 220 leases for approximately 831,000 square feet, compared to 194 leases and 719,000 square feet leased during the third quarter of 2023, representing a 15.5% increase in the amount of square footage leased and a 13.4% increase in the number of leases signed on a comparable center basis.

Previous wording

The Company believes that diversity of use within its tenant base has been, and will continue to be, a prominent internal growth catalyst at its Centers going forward, as new uses enhance the productivity and diversity of the tenant mix and have the potential to significantly increase customer traffic at the applicable Centers. During the quarter ended June 30, 2024, the Company signed leases for new stores with new-to-Macerich portfolio uses for 98,000 square feet, with another 204,000 square feet of such new-to-Macerich portfolio leases currently in negotiation as of the date of this Quarterly Report on Form 10-Q. During the year ended December 31, 2023, the Company signed leases for new stores with new-to-Macerich portfolio uses totaling over 600,000 square feet.

Current wording

The Company believes that diversity of use within its tenant base has been, and will continue to be, a prominent internal growth catalyst at its Centers going forward, as new uses enhance the productivity and diversity of the tenant mix and have the potential to significantly increase customer traffic at the applicable Centers. During the quarter ended September 30, 2024, the Company signed leases for new stores with new-to-Macerich portfolio uses for 71,000 square feet, with another 273,000 square feet of such new-to-Macerich portfolio leases currently in negotiation as of the date of this Quarterly Report on Form 10-Q. During the year ended December 31, 2023, the Company signed leases for new stores with new-to-Macerich portfolio uses totaling over 600,000 square feet.

Previous wording

As of June 30, 2024, the leased occupancy rate was 93.3%, a 0.7% increase compared to the leased occupancy rate at June 30, 2023 of 92.6% and a 0.1% sequential decrease compared to the leased occupancy rate of 93.4% at March 31, 2024.

Current wording

As of September 30, 2024, the leased occupancy rate was 93.7%, a 0.3% increase compared to the leased occupancy rate at September 30, 2023 of 93.4% and a 0.4% sequential increase compared to the 93.3% occupancy rate at June 30, 2024.

Previous wording

The pace of bankruptcy filings involving the Company’s tenants decreased substantially in 2023 and in 2022 compared to 2021. For the year ended December 31, 2023, there were ten bankruptcy filings involving the Company’s tenants totaling fifteen leases and representing approximately 111,000 square feet of leased space and $3.6 million of annual leasing revenue at the Company’s share. Year-to-date in 2024, there have been eight bankruptcy filings involving the Company’s tenants, including the bankruptcy of Express announced on April 22, 2024, totaling 43 leases and representing approximately 305,000 square feet of leased space and $18.1 million of annual leasing revenue at the Company’s share.

Current wording

The pace of bankruptcy filings involving the Company’s tenants decreased substantially in 2023 and in 2022 compared to 2021. For the year ended December 31, 2023, there were ten bankruptcy filings involving the Company’s tenants totaling fifteen leases and representing approximately 111,000 square feet of leased space and $3.6 million of annual leasing revenue at the Company’s share. Year-to-date in 2024, there have been nine bankruptcy filings involving the Company’s tenants, including the bankruptcy of Express announced on April 22, 2024, totaling 45 leases and representing approximately 312,000 square feet of leased space and $18.4 million of annual leasing revenue at the Company’s share.

Previous wording

During 2024, the Company expects to generate positive cash flow from operations after recurring operating capital expenditures, leasing capital expenditures and payment of dividends. This assumption does not include any potential capital generated from dispositions, refinancings or issuances of common stock. This expected surplus will be used to fund the Company’s development and redevelopment pipeline and, to the extent available, de-lever the Company’s balance sheet.

Current wording

During 2024, the Company expects to generate positive cash flow from operations after recurring operating capital expenditures, leasing capital expenditures and payment of dividends. This assumption does not include any potential capital generated from dispositions, refinancings or issuances of common stock. To the extent available, this expected surplus will be used to fund the Company’s development and redevelopment pipeline and de-lever the Company’s balance sheet.

Previous wording

The Company continues to actively address its near-term, non-recourse loan maturities, with five completed transactions year-to-date in 2024 totaling approximately $688.6 million, or approximately $539.4 million at the Company’s pro rata share. The Company has one remaining maturity in 2024 that is in the process of refinancing. For additional information on the Company’s financing transactions in the year ended 2023 through the date of this Quarterly Report on Form 10-Q, see “Financing Activities” in Management’s Overview and Summary.

Current wording

The Company continues to actively address its near-term, non-recourse loan maturities, with eight completed transactions year-to-date in 2024 totaling approximately $1.3 billion, or approximately $1.1 billion at the Company’s pro rata share. The Company has no remaining maturities in 2024. For additional information on the Company’s financing transactions in the year ended 2023 through the date of this Quarterly Report on Form 10-Q, see “Financing Activities” in Management’s Overview and Summary.

Previous wording

Elevated interest rates are increasing the cost of the Company’s borrowings due to its outstanding floating-rate debt and have led to higher interest rates on new fixed-rate debt. The Company expects to incur increased interest expense from the refinancing or extension of loans that may currently carry below-market interest rates. In certain cases, the Company has limited, and may continue to limit, its exposure to interest rate fluctuations related to a portion of its floating-rate debt by using interest rate cap and swap agreements. Such agreements, subject to current market conditions, allow the Company to replace floating-rate debt with fixed-rate debt in order to achieve its desired ratio of floating-rate to fixed-rate debt. However, any interest rate cap or swap agreements that the Company enters into may not be effective in reducing its exposure to interest rate changes.

Current wording

Elevated interest rates have increased, and may continue to increase, the cost of the Company’s borrowings due to its outstanding floating-rate debt and have led, and may continue to lead, to higher interest rates on new fixed-rate debt. While interest rates have begun to decrease, they remain elevated and the Company expects to incur increased interest expense from the refinancing or extension of loans that may currently carry below-market interest rates. In certain cases, the Company has limited, and may continue to limit, its exposure to interest rate fluctuations related to a portion of its floating-rate debt by using interest rate cap and swap agreements. Such agreements, subject to current market conditions, allow the Company to replace floating-rate debt with fixed-rate debt in order to achieve its desired ratio of floating-rate to fixed-rate debt. However, any interest rate cap or swap agreements that the Company enters into may not be effective in reducing its exposure to interest rate changes.

Previous wording

Leasing revenue increased by $5.3 million, or 2.8%, from 2023 to 2024. The increase in leasing revenue is attributed to increases of $7.5 million from the JV Transition Centers and $0.5 million from the Same Centers offset in part by decreases of $1.0 million from the Disposition Properties and $1.6 million from the Redevelopment Properties. Leasing revenue includes the amortization of above and below-market leases, the amortization of straight-line rents, lease termination income, percentage rent and the recovery of bad debts. The amortization of above and below-market leases increased from $0.5 million in 2023 to $2.5 million in 2024. The amortization of straight-line rents increased from $(0.8) million in 2023 to $(0.5) million in 2024. Lease termination income was $0.0 million for both 2023 and 2024. Percentage rent decreased from $4.5 million in 2023 to $2.9 million in 2024. (Provisions for) recovery of bad debts decreased from $0.6 million in 2023 to $(1.5) million in 2024.

Current wording

Leasing revenue increased by $6.1 million, or 3.1%, from 2023 to 2024. The increase in leasing revenue is attributed to increases of $7.7 million from the JV Transition Centers offset in part by decreases of $1.4 million from the Disposition Properties and $0.2 million from the Redevelopment Properties. Leasing revenue includes the amortization of above and below-market leases, the amortization of straight-line rents, lease termination income, percentage rent and the recovery of bad debts. The amortization of above and below-market leases increased from $0.5 million in 2023 to $0.7 million in 2024. The amortization of straight-line rents increased from $(0.6) million in 2023 to $1.1 million in 2024. Lease termination income increased from $0.1 million in 2023 to $0.2 million in 2024. Percentage rent decreased from $8.2 million in 2023 to $6.2 million in 2024. Recovery of (provisions for) bad debts decreased from $0.2 million in 2023 to $(0.1) million in 2024.

Previous wording

Other revenue decreased from $11.7 million in 2023 to $10.8 million in 2024. This decrease is primarily due to other income related to the Same Centers.

Current wording

Other revenue decreased from $13.4 million in 2023 to $9.7 million in 2024. This decrease is primarily due to other income related to the Same Centers.

Previous wording

Management Companies' revenue decreased from $8.0 million in 2023 to $6.8 million in 2024 primarily due to a decrease in leasing and development fees.

Current wording

Management Companies' revenue decreased from $7.4 million in 2023 to $7.1 million in 2024 primarily due to a decrease in leasing and development fees.

Previous wording

Shopping center and operating expenses increased $0.5 million, or 0.7%, from 2023 to 2024. The increase in shopping center and operating expenses is attributed to increases of $1.5 million from the JV Transition Centers and $0.9 million from the Same Centers offset in part by decreases of $1.7 million from the Redevelopment Properties and $0.6 million from the Disposition Properties.

Current wording

Shopping center and operating expenses decreased $1.2 million, or 1.6%, from 2023 to 2024. The decrease in shopping center and operating expenses is attributed to decreases of $0.8 million from the Redevelopment Properties and $1.9 million from the Disposition Properties offset in part by increases of $0.9 million from the JV Transition Centers and $0.6 million from the Same Centers.

Previous wording

Leasing expenses increased from $8.4 million in 2023 to $9.6 million in 2024 primarily due to an increase in compensation expense.

Current wording

Leasing expenses increased from $8.8 million in 2023 to $9.9 million in 2024 primarily due to an increase in compensation expense.

Previous wording

Depreciation and amortization increased $1.3 million from 2023 to 2024. The increase in depreciation and amortization is attributed to an increase of $2.6 million from the JV Transition Centers and $0.3 million from the Redevelopment Properties offset in part by decreases of $3.1 million from the Same Centers and $0.3 million from the Disposition Properties. Additionally, $1.8 million of the increase is attributable to Santa Monica Place.

Current wording

Depreciation and amortization increased $2.5 million from 2023 to 2024. The increase in depreciation and amortization is attributed to an increase of $4.8 million from the JV Transition Centers and $0.1 million from the Redevelopment Properties offset in part by decreases of $2.8 million from the Same Centers and $0.3 million from the Disposition Properties. Additionally, $0.7 million of the increase is attributable to Santa Monica Place.

Previous wording

Interest expense decreased $2.2 million from 2023 to 2024. The decrease in interest expense is attributed to decreases of $7.8 million from the financing arrangement discussed in Note 12 in the Company's Notes to the Consolidated Financial Statements, $3.0 million from the Redevelopment Properties and $0.4 million from the Disposition Properties offset in part by increases of $1.9 million from higher interest rates and outstanding balances on the Company's revolving line of credit, $1.1 million from the Same Centers and $3.2 million from the JV Transition Centers. Additionally, $2.8 million of the offset is attributable to Santa Monica Place, which includes default interest expense of $2.8 million. The decrease in interest expense from the financing arrangement is primarily due to the change in fair value of the underlying properties and the mortgage notes payable on the underlying properties.

Current wording

Interest expense increased $3.7 million from 2023 to 2024. The increase in interest expense is attributed to increases of $7.1 million from the JV Transition Centers and $1.0 million from the Same Centers offset in part by decreases of $3.4 million from the financing arrangement (See Note 12—Financing Arrangement in the Company's Notes to the Consolidated Financial Statements), $2.1 million from the Redevelopment Properties, $0.9 million from the Disposition Properties and $1.4 million from lower outstanding balances and interest rates on the Company's revolving loan facility. Additionally, $3.4 million of the increase is attributable to Santa Monica Place, which includes default interest expense of $3.1 million. The decrease in interest expense from the financing arrangement is primarily due to Chandler Freehold no longer being accounted for as a financing arrangement (See Note 12—Financing Arrangement in the Notes to the Consolidated Financial Statements).

Previous wording

Primarily as a result of the factors mentioned above, FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold, accrued default interest expense and loss on non-real estate investments decreased 1.1% from$89.1 million in 2023 to$88.1 million in 2024. For a reconciliation of net income (loss) attributable to the Company, the most directly comparable GAAP financial measure, to FFO attributable to common stockholders and unit holders—diluted, and FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold, accrued default interest expense and loss on non-real estate investments—diluted, see "Funds From Operations ("FFO")" below.

Current wording

Primarily as a result of the factors mentioned above, FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold, accrued default interest expense and loss on non-real estate investments decreased 14.5% from$100.6 million in 2023 to$86.0 million in 2024. For a reconciliation of net loss (income) attributable to the Company, the most directly comparable GAAP financial measure, to FFO attributable to common stockholders and unit holders—diluted, and FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold, accrued default interest expense and loss on non-real estate investments—diluted, see "Funds From Operations ("FFO")" below.

Previous wording

Leasing revenue decreased by $2.1 million, or 0.5%, from 2023 to 2024. The decrease in leasing revenue is attributed to decreases of $3.4 million from the Same Centers, $2.4 million from the Disposition Properties and $4.3 million from the Redevelopment Properties offset in part by an increase of $8.6 million from the JV Transition Centers. Leasing revenue includes the amortization of above and below-market leases, the amortization of straight-line rents, lease termination income, percentage rent and the recovery of bad debts. The amortization of above and below-market leases increased from $1.6 million in 2023 to $2.5 million in 2024. Straight-line rents decreased from $(2.6) million in 2023 to $(3.7) million in 2024. Lease termination income decreased from $1.7 million in 2023 to $1.2 million in 2024. Percentage rent decreased from $10.0 million in 2023 to $5.5 million in 2024. (Provisions for) recovery of bad debts decreased from $1.6 million in 2023 to $(4.4) million in 2024.

Current wording

Leasing revenue increased by $4.1 million, or 0.7%, from 2023 to 2024. The increase in leasing revenue is attributed to an increase of $16.3 million from the JV Transition Centers offset in part by decreases of $3.3 million from the Same Centers, $4.4 million from the Disposition Properties and $4.5 million from the Redevelopment Properties. Leasing revenue includes the amortization of above and below-market leases, the amortization of straight-line rents, lease termination income, percentage rent and the recovery of bad debts. The amortization of above and below-market leases increased from $2.1 million in 2023 to $3.2 million in 2024. Straight-line rents increased from $(3.2) million in 2023 to $(2.6) million in 2024. Lease termination income decreased from $1.8 million in 2023 to $1.4 million in 2024. Percentage rent decreased from $18.2 million in 2023 to $11.7 million in 2024. (Provisions for) recovery of bad debts increased from $1.9 million in 2023 to $(4.6) million in 2024.

Previous wording

Other revenue decreased from $20.7 million in 2023 to $19.7 million in 2024. This decrease is primarily due to other income related to the Same Centers.

Current wording

Other revenue decreased from $34.1 million in 2023 to $29.4 million in 2024. This decrease is primarily due to other income related to the Same Centers.

Previous wording

Shopping center and operating expenses increased $4.2 million, or 3.0%, from 2023 to 2024. The increase in shopping center and operating expenses is attributed to an increase of $4.1 million from the Same Centers, which is primarily due to increased insurance, utilities and snow removal costs, and $1.5 million from the JV Transition Centers offset in part by decreases of $1.4 million from the Redevelopment Properties and $1.2 million from the Disposition Properties. Additionally, $1.1 million of the increase is attributable to Santa Monica Place.

Current wording

Shopping center and operating expenses increased $3.0 million, or 1.4%, from 2023 to 2024. The increase in shopping center and operating expenses is attributed to an increase of $4.8 million from the Same Centers, which is primarily due to increased insurance, utilities and snow removal costs, and $2.4 million from the JV Transition Centers offset in part by decreases of $2.2 million from the Redevelopment Properties and $3.3 million from the Disposition Properties. Additionally, $1.3 million of the increase is attributable to Santa Monica Place.