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Macerich (MAC) Reaps $95M by Selling Stake in Phoenix Asset
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The Macerich Company (MAC - Free Report) recently completed the 95% stake sale in Paradise Valley Mall in Phoenix, AZ. The disposition, which was made to a newly-formed joint venture (JV) with an affiliate of RED Development, has helped the company generate $95 million.
Per management, Macerich’s move to realize the market value of this non-core asset comes as the retail landscape continues to evolve in Arizona and across the country. This will help boost its liquidity position. Moreover, the retention of the 5% JV interest will help the retail REIT participate in the upside of this multi-year, multi-phased project led by RED Development.
Notably, the JV partnership will redevelop Paradise Valley Mall as 92-Acre, mixed-use project. The Mall has been rezoned, and its uses will comprise high-end grocery, restaurants, multi-family residences, offices, retail shops and other elements.
Ed Coppola, president, Macerich commented, "Our focus remains on Macerich's top-tier, market-dominant properties that will continue to benefit from the industry's increasing momentum toward high-quality destinations."
Apart from the selling of the 95% stake in Paradise Valley Mall, Macerich has also resorted to the sale of 36 million shares of common stock under its "at the market" (“ATM”) equity program as part of its effort to boost its liquidity position. Particularly, the selling of 36 million shares of common stock under its ATM equity program at a weighted average price of $13.54 per share through Mar 25, 2021, helped the company reap gross proceeds of $487.3 million. Roughly 1 million shares remain available to be issued under the program now.
The retail REIT also obtained commitments for a new revolving line of credit and credit facility from its joint lead lenders. The line and the credit facility’s total capacity is estimated to range between $600 million and $800 million, and the facility is likely to close this month.
Such efforts to bolster liquidity are likely to help the company withstand the current turbulence in the retail real estate market. While businesses of physical stores widely depend on customer traffic, consumers have been avoiding crowded public spaces amid the pandemic and increasingly opting for online purchases. This has been taking a huge toll on tenants’ liquidity, thereby making it difficult to meet their rental obligations. As such, retail REITs, which have already been battling store closures and bankruptcy issues, have been widely affected. Apart from Macerich, this turbulence is affecting other retail REITs, including Simon Property (SPG - Free Report) , Regency Centers (REG - Free Report) and Kimco (KIM - Free Report) among others.
Nevertheless, the relaxations in restrictions continue to improve the operating conditions. Furthermore, widespread vaccinations and a likely uplift in consumer confidence in the second half of the current year are anticipated to buoy retailers’ businesses, in turn, backing cash flows of the retail landlords.
Macerich too has been benefiting from the relaxations of the pandemic-related restrictions and witnessing leasing demand from several category and variety of tenants.
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Macerich (MAC) Reaps $95M by Selling Stake in Phoenix Asset
The Macerich Company (MAC - Free Report) recently completed the 95% stake sale in Paradise Valley Mall in Phoenix, AZ. The disposition, which was made to a newly-formed joint venture (JV) with an affiliate of RED Development, has helped the company generate $95 million.
Per management, Macerich’s move to realize the market value of this non-core asset comes as the retail landscape continues to evolve in Arizona and across the country. This will help boost its liquidity position. Moreover, the retention of the 5% JV interest will help the retail REIT participate in the upside of this multi-year, multi-phased project led by RED Development.
Notably, the JV partnership will redevelop Paradise Valley Mall as 92-Acre, mixed-use project. The Mall has been rezoned, and its uses will comprise high-end grocery, restaurants, multi-family residences, offices, retail shops and other elements.
Ed Coppola, president, Macerich commented, "Our focus remains on Macerich's top-tier, market-dominant properties that will continue to benefit from the industry's increasing momentum toward high-quality destinations."
Apart from the selling of the 95% stake in Paradise Valley Mall, Macerich has also resorted to the sale of 36 million shares of common stock under its "at the market" (“ATM”) equity program as part of its effort to boost its liquidity position. Particularly, the selling of 36 million shares of common stock under its ATM equity program at a weighted average price of $13.54 per share through Mar 25, 2021, helped the company reap gross proceeds of $487.3 million. Roughly 1 million shares remain available to be issued under the program now.
The retail REIT also obtained commitments for a new revolving line of credit and credit facility from its joint lead lenders. The line and the credit facility’s total capacity is estimated to range between $600 million and $800 million, and the facility is likely to close this month.
Such efforts to bolster liquidity are likely to help the company withstand the current turbulence in the retail real estate market. While businesses of physical stores widely depend on customer traffic, consumers have been avoiding crowded public spaces amid the pandemic and increasingly opting for online purchases. This has been taking a huge toll on tenants’ liquidity, thereby making it difficult to meet their rental obligations. As such, retail REITs, which have already been battling store closures and bankruptcy issues, have been widely affected. Apart from Macerich, this turbulence is affecting other retail REITs, including Simon Property (SPG - Free Report) , Regency Centers (REG - Free Report) and Kimco (KIM - Free Report) among others.
Nevertheless, the relaxations in restrictions continue to improve the operating conditions. Furthermore, widespread vaccinations and a likely uplift in consumer confidence in the second half of the current year are anticipated to buoy retailers’ businesses, in turn, backing cash flows of the retail landlords.
Macerich too has been benefiting from the relaxations of the pandemic-related restrictions and witnessing leasing demand from several category and variety of tenants.
Shares of this Zacks Rank #3 (Hold) company have gained 12.2% so far in the current year compared with the industry’s rally of 11.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>