Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2025 Macerich Earnings Conference Call. — Operator Instructions — Please be advised that today’s conference is being recorded. I would like now to turn the conference over to Samantha Greening, Assistant Vice President, Director of Investor Relations. Please go ahead.

Thank you for joining us on our first quarter 2025 earnings call. During this call, we will be making certain statements that may be deemed forward-looking within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995, including statements regarding projections, plans and future expectations. Actual results may differ materially due to a variety of risks and uncertainties set forth in today’s press release and our SEC filings. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the earnings release and supplemental filed on Form 8-K with the SEC, which was posted in the Investors section of the company’s website at macerich.com. Joining us today are Jack Hsieh, President and Chief Executive Officer; Dan Swanstrom, Senior Executive Vice President and Chief Financial Officer; and Doug Healey, Senior Executive Vice President of Leasing. And with us in the room is Brad Miller, SVP of Portfolio Management. 1 And with that, I’ll turn the call over to Jack.

Thank you, Samantha, and good afternoon. We’re pleased to discuss today the significant progress we continue to make in executing on our path forward plans. I want to make sure everyone comes away with 3 main themes from this call. First, Macerich is a much better informed, aligned and operationally focused company than ever before. Second, we are ahead of schedule on our leasing progress targets. This gives us a greater line of sight and confidence into the key operational, financial and deleveraging metrics embedded in our path forward plan. And third, this leasing progress demonstrates how close we are to our major inflection point in mid-2026. The point that indicates we would be substantially complete with the plan. When I set out the path or plan in July of 2024, the goal was to create a new Macerich. That required transforming the company by simplifying the business, improving operational performance and reducing leverage. We put a mission statement in place to own and operate thriving retail centers that bring our communities together and create longterm value for our shareholders, partners and customers. We instilled new corporate values of excellence, empowerment, integrity, optimism, relationships and fun. Based on the results I’ve seen to date, I can attest to how well this mission and the corporate values have been embraced throughout the company. I also put in place a new structure that I talked about last quarter to streamline all our permanent specialty and department store leasing teams under one leadership and report- ing structure, make our asset management team a stand-alone group and place our property operations, marketing and development under a new leadership structure. To ensure that these teams could collaborate seamlessly with real-time tenant data and leverage the 5-year ARGUS models that the asset and portfolio management teams created for 2 each property, we implemented a leasing dashboard that we referred to internally as the leasing speedometer. This tool and other technology enhancements we’ve implemented drive every leasing and capital allocation decision at our properties. Everyone at Macerich is fully aligned on what we’re doing. Over the past 6 to 9 months, we have derisked the path forward plan by consolidating joint ventures, issuing equity, completing our refinancings and executing on dispositions. Today, I’ll talk about the data that we have now that gives me the confidence that we’re on track to deliver our 2028 leverage and earnings metrics. This data shows that we’re also on track with the major milestones and catalysts that can be expected to help us reach our mid 2026 inflection point. Let’s speak to leasing first. Leasing is a piece of the plan that best tracks the progress on hitting our 2028 targets. It is what I am most focused on today at Macerich. I believe that it is the most accurate predictor of Macerich’s future success. I’m pleased to say that we are ahead of schedule on all our leasing efforts. I noted last quarter that we are targeting an average of 4 million square feet of leasing in 2025 and 2026. During the first quarter, we signed 2.6 million square feet of leases, including 2.3 million square feet of renewals. As Doug will describe in a moment, that’s more than double the leases signed in the first quarter a year ago. Between commitments and LOIs, we are nearly done with our 2025 lease expirations. We are now well into 2026 lease expirations. We are also laser-focused on a higher percentage of new lease deals versus renewals in our annual mix of business. As new deals will be the primary driver of higher spreads and incremental revenue to hit our NOI goal. We are tracking our progress on this front with 2 metrics: the new deal completion percentage that we track internally on our leasing speedometer and our SNO pipeline. As laid out in our last quarter earnings call, our initial goal on new deals was 50% progress by mid-2025 and 70% by year-end 2025. Hitting the 3 70% goal by year-end would put us on track to the mid-80% range by mid-2026. Reaching that goal also puts us on track for our ultimate opportunity to achieve the $130 million in cumulative SNO potential that I outlined last quarter. We’ve seen that mid 2026 leasing goal would effectively complete the new leasing goal outlined in our original plan. As I noted earlier, we are ahead of this plan. As of last quarter, our leasing speedometer was at 39%. I’m pleased to report that we are currently at 60% from new deal completion and have a large pipeline of LOIs, which gives us tremendous confidence in hitting the 70% mark by year-end. Last quarter, our SNO pipeline was $66 million. That has now grown on a cumulative basis to $80 million as of today, which puts us on track to achieve a total and cumulative SNO pipeline of $100 million by year-end. Doug will provide additional details on our SNO pipeline shortly. While we’re on the topic of leasing, I want to address the inevitable question on tariffs and any impact we’re seeing. I’ll echo what many CEOs have already said this quarter that we’ve seen minimal impact to date across the portfolio. We’ve had 3 strong executive leasing committees since early April, and a touch base with all retailers with leases out and virtually all are moving forward. In addition, we’re in contact with existing tenants, and so far, there is no material effect on their business or inventories. We’ll obviously continue to monitor these discussions and developments in real time. For our target of $2 billion of asset sales and loan givebacks, we continue to execute on targeted dispositions, which strengthen the balance sheet and I’m pleased with the substantial progress made by the team. Dan will provide an update on these activities shortly. We’re approaching the balance of 2025 with a significant amount of confidence in the outcome and timing of our plan as well as the clear conviction that we have derisked the elements of the Path Forward plan. This conviction is based on the fact that we have sim4 plified the business by consolidating JVs, which also enabled us to execute the refinancing on Washington Square. Dispositions have reached a total of $1.1 billion. We completed the equity raise ahead of plan, raising $500 million, refinancings are ahead of plan for $1 billion in total. We’ve locked in lease escalations that are a massive part of the expected lift. And lastly, efforts to secure new leases are well ahead of plan. All we have remaining to achieve the plan is $50 million of SNO and completion of the remaining mall dispositions and givebacks as well as the outparcel sales. I’m confident our leasing and asset management teams can deliver on these 2 remaining pieces. In conclusion, we have exceptional talent here at Macerich, and I’m pleased to see how well the team is collaborating using the tools and technology we’ve implemented. We are ahead of plan and have proven that we have the right process, strategies and team in place with great retail centers that can drive rental rates with strong permanent occupancy. With that, I’ll turn the call over to Doug.

Thanks, Jack. Portfolio sales at the end of the first quarter were $837 per square foot, which is flat when compared to the fourth quarter of 2024. However, when you exclude our Eddy properties, sales were $928 per square foot, which is up $13 compared to the last quarter. Traffic for the year is up 2% when compared to the same period in 2024. Occupancy in the first quarter was 92.6%, down from 94.1% when compared to the fourth quarter of 2024. Most of this decline is due to the decrease in temporary holiday stores, which closed at the end of 2024 or during the first quarter of 2025 as well as transitioning Fashion District Philadelphia from a development project back into same-center occupancy. Portfolio occupancy, excluding our Eddy properties, was 95.2% for the quarter compared to 95.8% for the fourth quarter of 2024. Trailing 12-month leasing spreads as of March 5 31, 2025, were 10.9% versus 8.8% last quarter. This comprised of 22% spreads on new deals and 7% spreads on renewals. And this now represents 14 consecutive quarters of positive leasing spreads. Looking at the leasing spread on a same-space basis, spreads for new deals were 37.4% and spreads from renewals were 1.3%. In the first quarter, we opened 177,000 square feet of new stores while signing 320 leases for 2.6 million square feet. In terms of these lease signings, this represents 50% more leases and 160% more square footage that we signed in the first quarter of 2024. And just looking at new deals, it’s almost 70% more leases and 180% more square footage than first quarter 2024. The best brands remain very active and continue to take advantage of great space in centers. To that end, in the first quarter, we signed 2 flagship stores at Tysons Corner Center, a 45,000 square foot Zara and an 18,000 square foot UNIQLO. UNIQLO will open in late 2025 and Zara in early 2026. Other notable signings in the first quarter include Alo Yoga at Los Cerritos in SanTan Village, Abercrombie & Fitch at Broadway Plaza in the village of Corte Madera; Aritzia at Los Cerritos, Rag & Bone at Fashion Outlets of Chicago and Loro Piana at Scottsdale Fashion Square. This list goes on with these examples are reflective of the continued flight to quality that retailers are pursuing, especially in our portfolio. Now let’s look at our executive leasing committee, which reviews and approves deals on a biweekly basis. This is much more forward-looking and a better representation of the current environment and retailer sentiment. To date, we’ve reviewed over 70% more new and renewal deals and 145% more square footage than we did during the same period last year. And if you look at new deals only, we reviewed twice the number of new deals and 4x the square footage than we did during the same period last year. And keep in mind, once these deals are approved, they go leased, get signed and eventually become part of 6 our signed not open pipeline. Turning to our lease expirations. To date, we have commitments on just about 80% of our 2025 expired square footage that is expected to renew and not close with another 16% in the letter of intent stage. So between commitments and LOIs, we’re basically done with 2025 and now well into our 2026 lease expirations. As we all know, in the first quarter, Forever 21 filed for bankruptcy, this being the only bankruptcy filing year-to-date in our portfolio. While Forever 21 had a lot of square footage, they didn’t pay a lot of rent. We’ve anticipated this liquidation of stores for some time and recapturing these stores will provide an excellent opportunity to remerchandise the space with higher and better uses, paying us significantly more rent. To date, we have commitments on just over 50% of the closed square footage with another 10% in the letter of intent stage. With our commitments alone, we’ve already surpassed the rent Forever 21 was paying, and when we finalize this entire backfill endeavor, we anticipate we should more than double the rent Forever 21 was paying in the aggregate. Turning to our signed not open or SNO pipeline. To date, we have 148 signed leases for 1.2 million square feet of new stores, which we expect to open between now and into early 2028. In addition to these signed leases, we’re currently negotiating leases that were previously approved in our executive leasing committee for new stores totaling just over 1.7 million square feet, and these 2 will open between now and into early 2028. So in total, that’s nearly 3 million square feet of new store openings throughout the remainder of this year and beyond. The leasing activity has grown our SNO pipeline from $66 million of last quarter to $80 million today. I’m very pleased with this growth in just 90 days, and it gives me confidence that we will hit $100 million by the end of the year. In 2025, we expect to realize approximately $25 million of the current $80 million pipeline. And of that $25 million, we’ve already realized $6 million in the first quarter. The remain7 der of the $80 million is anticipated to be realized between 2026 and early 2028. Lastly, we’re very excited to announce that we will be breaking ground this week on the redevelopment and expansion of Green Acres, which is located on Long Island in Valley Stream. This development is comprised of 370,000 square feet, which addresses 260,000 square feet of the vacant Sears and Kohl’s boxes along with the demolition of Sears TBA and parking deck. The project will open sight lines to the major highway in front of the mall and will include a new brand entrance along with an attractive streetscape, showcasing outward facing shops as well as full-service restaurants, quick service restaurants, grocery, entertainment and service uses. Demand and pre-leasing have been very strong with almost 50% of the project square footage committed and another 17% in the LOI stage. Tenants will open in phases beginning in 2026 with full completion by fall of 2027. So stay tuned for several exciting announcements in the very near future. And with that, I’ll turn the call over to Dan to go through our first quarter financial results.

Thanks, Doug, and good afternoon. I’ll start with a review of first quarter financial results. FFO, excluding financing expense in connection with Chandler Freehold accrued default interest expense and loss on non-real estate investments was approximately $87 million or $0.33 per share during the first quarter of 2025 as compared to approximately $75 million or $0.33 per share for the first quarter of 2024. The primary driver of the $12 million increase in nominal FFO is higher leasing revenues including from the net impact of JV interest acquisitions and dispositions activity, which more than offset increases in operating expenses and interest expense. I would like to highlight the following items included in our FFO adjusted for the quarter. 8 Number one, $9 million of interest expense relates to the amortization of debt markto-market resulting from our various JV interest acquisitions. This noncash expense is included in interest expense. Number two, $2 million of severance expense is included in management company’s operating expenses. And number three, $6 million of legal claims, net settlement income at one of our properties related to a construction design defect matter. We believe aggregate proceeds recovered are more than adequate to cover our proposed solution. This $6 million is nonrecurring in nature and is included in other income. Same center NOI, excluding lease termination income, increased 0.9% in the first quarter of 2025, compared to the first quarter of 2024. Excluding Eddy assets, same-center NOI increased 2.4% year-over-year. Turning to the balance sheet. During the first quarter, we have made good progress on our Path Forward plan. We closed on a new $340 million 10-year mortgage loan on Washington Square at an attractive fixed interest rate of 5.58%. We used a portion of the net proceeds to repay the remaining first mortgage on FlatIron Crossing, which was approximately 72 million our share and to repay the balance outstanding on our line of credit, which was $110 million. FlatIron was a 2025 maturity and inclusive of the $7.5 million mezz loan and FlatIron that we paid off earlier in the quarter, carried an interest rate of just north of 9%. FlatIron is now unencumbered. For the balance of 2025, we have only one remaining maturing loan in November for approximately $200 million. And we’ll continue to proactively address our remaining 2026 debt maturities through a combination of potential asset sales, refinancings, loan modifications or loan givebacks. We currently have approximately $995 million of liquidity including $650 million of capacity on our revolving line of credit. 9 From a leverage perspective, net debt to EBITDA at the end of the first quarter was 7.9x, which is almost a full turn lower than at the outset of the Path Forward plan. And importantly, we’ve outlined our strategy to further reduce leverage to the low to mid-6x range over the next couple of years. We continue to make substantial progress in executing on planned dispositions as part of the Path Forward Plan. In March, we closed on the sale of Wilton Mall for $25 million. In April, we closed on the sale of South Park for $11 million. Both assets were unencumbered. We are currently under contract to sell Lakewood, which is expected to close in the second half of 2025, subject to customary closing conditions. We expect net proceeds to Macerich of approximately $5 million above the debt balance outstanding. These sales transactions are consistent with our stated disposition plan to improve the balance sheet and refine our portfolio. With respect to our bucket of disposition in outparcels, freestanding retail, nonenclosed malls and land, we have also made considerable progress toward our 2025 goal of $100 million to $150 million in total sales for the year. During the first quarter, we closed on $7 million at our share of land sales. In April, at SanTan Village, we closed on the sale of vacant lots for $25 million at our share and 3 outparcel assets for $7 million at our share. And I’m very pleased to report that we currently have approximately $17 million of additional land sales and approximately $21 million of additional outparcel sales under contract, which are expected to close in the second half of 2025, subject to customary closing conditions. This brings us to $77 million sold or under contract against our $100 million to $150 million target for 2025. To recap on the path forward plan, significant progress to date on the 3 key pillars to reduce leverage. One, Jack and Doug provided an update on the successful leasing progress to date that is a critical component of delivering on the NOI growth component of the 10 plan. Two, we achieved the equity issuance component of the plan in the fourth quarter of 2024. And three, we have made substantial progress on the sales and giveback component of the plan and have identified a clear path to achieving our $2 billion disposition target. To date, we have completed almost $800 million. And as you will see in the incremental disclosure we’ve provided in our supplement, this includes Country Club Plaza, Biltmore, The Oaks, Southridge, Wilton Mall and South Park, all of which are closed. Santa Monica Place in which the loan encumbering this property is in default and then Atlas Park, which is currently being marketed for sale. The sale of Lakewood, which is now under contract, would increase our sales completed total to just over $1.1 billion. And then we have identified internally several additional assets totaling up to $400 million for sale or give back over the next 1 to 2 years. The remaining dispositions in our plan represent the sale of outparcels, freestanding retail, nonenclosed mall assets and land. We continue to expect to be substantially complete on this last bucket of the disposition program by the end of 2026. We’ll provide further updates on these sales as we progress through the year. In conclusion, we are making great progress on our Path Forward plan objectives to reduce leverage, refine the portfolio and strengthen the balance sheet. With that, we’ll turn the call back over to the operator.

— Operator Instructions — And our first question will come from Ki Bin Kim with Truist.

Congratulations on a great quarter. So first question, I know this answer might be a little bit different, and you touched on the customer reactions from the trade tariffs. But with 11 the news from this weekend, do you think there’s any potential upside on leasing going forward?

Ki, it’s Doug. I’ll take that one. Let me talk about what we were seeing during the tariff. We did not see a lot of pullback. In fact, a couple of weeks ago, we had our Board meeting. Prior to that, we contacted every 1 of our 40 national rent-paying tenants. And really, none of them was pulling back on open to buys. They were all honoring their leases out or they’re fully executed leases. Then we actually looked at every lease we had out for signature, contacted every retailer, and there was only a handful that were pulling back. So we haven’t seen a lot. Therefore, I don’t think there’s really any change in the upside. I mean the retailer sentiment is strong. You can see it in our leasing metrics, what we’ve signed, what we approved in ELC and then most importantly, what’s currently in our pipeline.

Okay. And on the SNO pipeline of $80 million, that’s a cumulative number. But can you provide what is net incremental that we can expect when we model?

This is Brad. I’ll take that one. So the $80 million is incremental over the revenue being generated in the spaces from 2024. So that is our cumulative total that we expect to see in our model through 2028, and $25 million of that will be realized in 2025 and $6 million of it was realized in Q1.

And the next question will come from Craig Mailman with Citi.

12 You mentioned a couple of times that you’re ahead of plan here on the leasing side of things and you’re doing well on the sales and givebacks. Just kind of curious, as you look at what you’re spending on the leases to get them up and running on the CapEx side. Is that trending ahead? And then also just given the execution here, when do you guys think you’d be in state giving guidance?

Greg, this is Jackson. So on the spend, I think we’ve talked about on spaces under 10,000 square feet. It’s basically north of 1x annual rent, 1.2 to 1.4x in that range. Obviously, for anchor deals, anchor deals are more expensive. We have 26 anchor deals that we believe will come online in 2028, 17 of the 26 deals are already committed. They’re either leases signed or leases out. We got another 6 LOIs and 3 are prospecting. So I would say, generally, as we think about capital, the plan is probably slightly more capital than initially envisioned when we came up with a Path Forward last year. The dollars are being spent faster in the model. And as we discussed last time, correspondingly, you’re going to see the major uplift in FFO and EBITDA in ’27, ’28, just as it relates to the time it takes to deliver.

And our next question will come from Linda Tsai with Jefferies.

Great job with all the progress this quarter. Just wondering about the success of the new deals in the quarter, up 70% from a year ago, I assume that the new structure that you talked about to streamline permanent specialty and department store leasing under one leadership helps. But just any more color and details you could provide about the success of the pace on new leasing?

13 Yes. Thanks, Linda, it’s Jackson. Look, the pace works because of the way we’ve laid out the plan and our organizational structure. Obviously, the leasing is consolidated into one team, but the asset management team, which rides as an equal partner to leasing, there’s a very direct line of communication between asset management, leasing, how it affects portfolio management in our model and in our speedometer. That’s phenomenal. Once again, just to reiterate, that represents expected revenue from these new leases. So it’s very important to be at 60% at this point. So I would say that while the pace has been honestly incredible versus historical experience here. There’s no reason why you can’t stop or continue with the space. It’s – we’ve got the right properties. Tenants want to be in there. We kind of know the right prescription, we know how to fix the model. We make decisions very rapidly and the teams have a very clear directive. I also think like I said one of the reasons why I think we’ve really broken the back of this plan. The $15 million of remaining SNO that we talk about, $20 million of that $50 million is within our fortress properties, our best properties in the portfolio. And of the $50 million, 90% of that revenue is going to come from A, B and C rated space. So we’re talking about the best space and our best centers or our top centers that are remaining to go. And so yes, we’re going to continue to lease at very aggressive levels, but we’ve got a lot of great space to lease still in great centers.

Just one follow-up to that. In terms of the funnel of tenants that you’re considering, have you opened up the funnel tenants that you’re leasing to as well?

Linda, can you repeat the question, please? 14

I was just wondering if you’re considering a wider cohort of tenants that you would lease to?

No. I think we’ve talked about this on several calls. Coming out of COVID, the breadth and depth of – we don’t even call them retailers anymore. It’s really uses has expanded tremendously. So when we talk about leasing, yes, there are the key legacy retailers, they’ll always be a part of our shopping centers, but you’re also looking at digitally native and emerging brands, international brands, food and beverage, restaurant, medical, entertainment, electric vehicles, fitness, home furnishings, grocery. So the uses that we have to choose from are really unprecedented today.

And the next question will come from Ronald Kamdem with Morgan Stanley.

Just – I think in the last call, you mentioned thoughts on same-store NOI maybe being flattish for this year and next, maybe until you sort of get the lease commencements and so forth. Just curious if we can get an update on that given things are running ahead of plan. And any sort of high level ’27, ’28 occupancy targets in your mind would also be helpful?

Rod, it’s Jackson. So last quarter, when I made reference to the flat NOI same-store profile, my initial comment was really related to the entire portfolio. As I said, the best indicator of success is our leasing progress. And based on this faster leasing pace on our go-forward portfolio, we actually expect same-store NOI in our go-forward portfolio in 2026 to be in the 3% to 4% range, and significantly higher in ’27 and ’28. 15 As it relates to physical permanent occupancy, I talked last quarter about roughly being around 84% physical permanent occupancy in our go-forward portfolio. At the time, the SNO that we talked about last quarter represented about 250 basis points of potential permanent occupancy. So if we kind of keep at this pace, you sort of should expect us to get very close to that 89% area of physical permanent occupancy, plus 26 anchor locations being fulfilled, which those anchors, we think would generate over $600 million in sales. So we do our work. We think that we’re going to really be able to accelerate the sales productivity and traffic in our centers. And that’s going to really set ourselves up for some better releasing spreads as we get more permanently occupied on the next cycle of lease renewals after 2028.

The next question comes from Samir Khanal with Bank of America.

I guess, Jack, I mean, you’re certainly making a lot of good progress here, especially on the leasing side. But just one metric that’s sort of is lagging or has sort of held constant is sales. I guess, how should we think about your ability to sort of push rents here, especially if sales don’t grow? Again, it’s good progress made so far, but I just want to get your thoughts on sales here?

So I think you’ve got to sort of trust in the process that we’re executing on. When I look at like Scottsdale Fashion Square, that center is doing over $1 billion in sales. Tysons is going to do over $1 billion after we get a couple more – we’ve got an anchor deal that’s approved, but we’re in the documentation phase. We’ve got 26 anchors that are coming online between now and 2028, and an incredible amount of in-line permanent occupancy increasing with what I call best-in-class brands that drive traffic and rent and sales. 16 So yes, we’re spending a lot of money in centers. We’re not densifying. We’re in good retail use. And I think that’s really – that gives us the confidence to be able to drive sales productivity. So I wouldn’t get so worried about this intermediate period on sales. Maybe at some point, we’ll break down sales in some of our better centers where we’ve done this type of work, like Tysons and Scottsdale that give us the confidence to know if you do the right things in the centers from a retail standpoint, you get the right result in terms of traffic increase and sales productivity. And we’re applying that sort of basic strategy across our go-forward portfolio at this point.

And the next question comes from Floris Van Dijkum with Compass Point.

My question to you was more you’ve identified your Eddy’s or your – and some of these potential additional sales candidates. Can you quantify to us what percentage of your NOI today is core versus noncore. And maybe talk a little bit about – I think you’ve indicated that you think your core NOI is going to grow by 3% to 4%. Is that this year? Or is that next year?

So that’s next year on the 3% to 4% on the core go-forward portfolio. But, we’re going to come out with this NOI bridge in the next 2 weeks, like it’s between ICSC and NAREIT. It’s going to outline – I think we’ll make this a little bit more clearer and also outline what properties are designated within the go-forward. And I think that after we do that be more helpful for you all, if we can take you through it.

And our next question comes from Greg McGinniss with Scotiabank. 17

I have 2 questions on the new leasing. Just trying to better understand that kind of speedometer metric. But what percent of total leasing deals do you expect to be new deals in 2025 and ’26, how does that compare to the historical average? And then does this new deals under consideration by the executive leasing committee, is that more retailers looking to locate in Macerich assets? Or is that more of a willingness on your end, not to renew tenants take on the short-term vacancy for some longer-term gain?

I’ll take the second question first, and then Brad, maybe you can take the first question. But the deals we review at our executive leasing committee are really a combination of new deals and renewal deals. Many are new deals that are just strictly taking vacant space that we’ve identified, Jack mentioned, A, B and C quality space. We have every single space in our portfolio identified and a rent attributed to it. So we know exactly what we’re doing methodically. Are we taking off some space, taking some space off-line? Yes. And we do that. That’s just normal course of business. We do that to enhance the merchandising of the shopping centers, and Jack just alluded to that. So really, ELC is a combination of both renewal deals and new deals. But I really view it as a forward-looking metric that unlike signed leases, which is the stuff we’ve done in the past, what we look at on a biweekly basis is all new and really more indicative of what’s going on in the present and more importantly, in the future. Brad, do you want to...

And Greg, on the first part of the question, in 2023, we just – as a point in time, we did 4.2 million square feet of leasing, 1.4 million of that square footage was new leases. Now that was for the entire portfolio. I would say, as the go-forward, you should expect our 18 percentage of new to be higher. I’m going to give you an exact target, but it’s going to be higher than that percentage. And we’ve talked about that where that’s a big opportunity.

Okay. And if I could just follow up on the development – sorry, the redevelopments. Just so that the yields fell a bit this quarter. It looks like a mix of increased project costs and lower rent assumptions. I was hoping you could give us some more clarity on that?

Yes. Greg, it’s really just the team just completed their property quarterly reviews and in going through that process, there were some marginal cost increases at both FlatIron and Green Acres, which are really driving the differences that you’ll see in the supplement page on the development.

Okay. No risk for further growth beyond that?

Not as we sit here today, based on the latest review of the projects that we just completed over the last couple of weeks.

And the next question comes from Vince Tibone with Green Street.

Could you clarify the differences in the 2 renewal leasing spread statistics you cited earlier? I believe you said one was 7% and the other was like closer to 1% on a same-space basis. But not for renewals, things should generally be same space. So just if you could clarify kind of what’s driving the delta there. That would be helpful. 19

It’s Brad. I’ll take that one. So on the same space spreads, we look at it – it includes [ temp ] spaces and who’s in the space today. And so it’s apples-to-apples in the exact same space. When we look at the new and renew the ’22 and the metric for new deals, that includes both against the same expiring rent. So it’s just splitting it between the two.

I thought – okay, did I miss here then. I thought it was like one renewal, 7%. The other one was 1%. I guess. So renewals, it sounds like the 1% figure is the more appropriate like renewal spread on to think about?

Yes, I would say so. I mean, our renewal spreads are definitely less than our new deal spread, and that’s why we’re...

Also like in that first quarter, we had an anchor renewal, so those are also waiting in that package.

Got it. So there – the prior tenant, so it includes the anchors, it includes temps. I just want to make sure I understand what’s in that metric. Because I believe that’s the first time this has been provided, correct me if I’m wrong.

I think we provided the color last quarter as well in the same space I guess.

And the next question will come from Omotayo Okusanya with Deutsche Bank. 20

For the same-store NOI growth this quarter, could you give us a little bit in the detail about the kind of same-store revenues and same-store expenses? What happened in these 2 items to kind of get to the same-store NOI?

Are you referencing for the first quarter of 2025?

Yes. For the first quarter of 2025, and I’m just trying to understand how you ultimately expect that to change to kind of get to this 3%, 4% growth we’re talking about in 2026?

Yes, the first – I mean, in the first quarter, we did see some operating expense increases. But as I mentioned earlier, the revenue generation was more than offsetting those shopping center increases for the first quarter. And you went out on the second part of your question...

You’re just talk about the go-forward. So it’s a different portfolio, that’s it...

The first quarter 2025 is for the current portfolio and the commentary Jack referenced earlier, the 3% to 4% in 2026, that’s for the go-forward portfolio, which to the earlier comment, we’ll be providing more color on the position of that portfolio with our NOI bridge over the next couple of weeks.

The next question comes from Alexander Goldfarb with Piper Sandler. 21

We’re 1 or 2 questions. I just want to make sure, are we – can we ask 1 or 2?

Just ask one, if you could and then...

Well, then on the numbers side, there were some items in the first quarter, I – maybe you mentioned the legal expense in the opening, I didn’t hear it, but there was a lease term fee, and then there’s legal expense. And then also, it sounds like there’s $21 million of land sales potentially in the balance this year in FFO? So just trying to get a better understanding on the legal and lease term in the first quarter, expectations for more lease terms this year and then land sales that we should expect in FFO for the balance of the year?

Yes, sure. So I’ll start with the legal claims. As I mentioned, was $6 million of net settlement income at one of our properties during the first quarter related to a construction design defect matter. That’s onetime in nature. We expect those proceeds received recovered more than be adequate to cover the cost of the proposed solution. So we highlighted that as more of a nonrecurring onetime item. As it relates to lease termination fees, we had about $5 million of lease termination fees come through in the first quarter. And that was primarily driven by one large tenant at Fashion Outlets of Chicago, which was a $3 million amount, and we’re pleased that we already have another tenant that has taken that space. So that’s good news at that particular asset. And then as it relates to land sales, yes, we just kind of gave an update that for the first 22 quarter, we closed on $7 million of land sales. And then in April, we closed on the sale of another $25 million of land sales. So in totality, that’s part of our $100 million to $150 million bucket, which in combination with the outparcels, we’re now $77 million sold against that $100 million to $150 million target.

And then expectations for lease terms for the balance of the year?

We expect maybe a couple more million dollars of lease termination income in the balance of the year based on the visibility we have today.

The next question comes from Haendel St. Juste with Mizuho.

I appreciate the comments on the tariffs not impacting leasing, but I guess I’m curious on how tariffs might be impacting the conversations around some of the asset sales that you’re doing here, understand Lakewood is the last sizable asset you have left to sell. But what can you tell us about the pricing, the demand for Lakewood, any color on that and potentially a sense of when you expect that to close?

Yes. Well, Lakewood, as we referenced, the proceeds over the debt amount are not very significant. So the borrower is going through a process right now with the existing lender, the buyer. I would say as it relates to debt financing, I mean, I think Washington Square is a great example of refinancing stabilized malls that Dan can give you more color. On the outparcels, some of the cap rates on the restaurants were like in the 5%, mid-5% range. We’re seeing really – these are high net worth buyers, 1,031 buyers, did a lot of this 23 at our old company at Spirit. And so you estimate on our outparcel objective. I think we laid out $500 million of outparcels, roughly 8%. I think we’re going to do better than that. I think it’s going to probably be closer to 7%. And I think we’re going to end up maybe even doing more if we want because we’ve identified more vacant land opportunity that quite candidly on a price per acre is a lot more valuable than what we did in SanTan. And so yes, I think we feel really good about that piece of the execution that’s left.

Okay. Any ballpark on NOI yield or any stat on the pricing for the Lakewood from a value perspective, given the space where we don’t see a lot of trade?

I would just look at the debt yield that we put in our supplemental – in our disclosure, it’s a pretty good approximation for cap rate there.

Got it. Okay. Fine. And then maybe one more, if I could. Just I appreciate the color and all the numbers you guys provided, lots of numbers. But I guess if I’m curious if we should be reading into your comments that the mid-’26 inflection if that’s when we should be thinking about cash flow or earnings to be troughing and then to inflect positively from that point?

Yes. Haendel, I think that’s a fair characterization of it. Just as Jack mentioned, as we have a lot of leasing activity coming online over the next couple of years, development NOI really starts to ramp second half of ’26, ’27 and ’28. And then on the flip side, we’re working through these outparcel sales and asset sales and givebacks. So it’s possible that the NOI – lost NOI from those could be more than what’s coming online from the sources coming in over that next 12- to 18-month period. So that’s a long way of saying, I think 24 your statement is fair.

The next question comes from Caitlin Burrows with Goldman Sachs.

I guess just thinking about the long-term plan and the targets in terms of reaching the physical permanent occupancy targets by 2028, which I think was up about 500 basis points from year-end ’24. I’m wondering if you could go through what kind of leakage or tenant fallout nonrenewals, that sort of thing you’re assuming on the other side. I guess one concern is that a new Forever 21 or someone like that comes along and creates a new hole to fill. So just wondering kind of how that’s factored into your occupancy targets and outlooks?

We take that all into consideration in our 500 basis points of increase. Any fallout from planned closures and tenants that we’re replacing is all weighed into that 500 basis points.

And our next question will come from Michael Mueller with JPMorgan.

Just for the Forever 21 releasing, what portion of that activity is going to single users as opposed to breaking up the spaces for smaller tenants?

I can take that one. Michael, it’s Doug. It’s really a mixed bag. I would say that the majority of the space is being leased as it is, some of the larger anchor store spaces that Forever 21 took, may get broken up. But as I mentioned, we’re about 56% – about 50% committed, and we’re going to basically double the rent that Forever 21 was paying. And while we’re 25 not at liberty to disclose or talk about the replacement deals yet, you should be thinking about some of the real, real hot tenants that are out there right now. I mean this is really an opportunity for us to be able to get these underperforming stores back, and then think about like DICK’S House of Sport or Zara or Primark or UNIQLO or Urban Planet replacing them, there’s just so much upside not only in the rent, but by – in terms of merchandising as well.

I am showing this is all the time that we have now for questions. I would now like to turn the call back to Jack Hsieh for closing remarks.

Thank you, and we’re pleased to report our continued progress on many strategic initiatives within our Forward Path plan, and we thank you all for your time today.

This concludes today’s conference call. Thank you for participating. You may now disconnect. Copyright © 2025, S&P Global Market Intelligence. All rights reserved 26