Premium Post: Macerich (MAC) : a summary

Summarizing the prior investment thesis on MAC (which was extremely long).

Early today, I posted an extremely long investment thesis on Macerich. It included property valuations on ~15 of their properties, lot of background, etc. It was so long that substack (which publishes the premium blog) gave me a warning they might not be able to send it in email form. Realizing that length might present barriers to reading it immediately, I wanted to post a quick summary of the investment thesis here. As always, feel free to email me with questions / comments / concerns.

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• The vast majority of Macerich’s debt is non-recourse, which is critical. The company can selectively walk away from underwater malls if the environment remains awful.

• A conservative estimate of the value of just their best assets plus their non-mall assets yields a value roughly equal to today’s share price. That valuation is likely extremely conservative; if you assume a rebound, their value would significantly exceed today’s share price.

• That conservative valuation did not include multiple assets that have significant equity value. Factoring those in, MAC’s value is significantly higher than today’s share price even under depressed scenarios.

• Recent insider buying throughout March (particularly at the end of March) lends confidence that 1) the company’s share price does not reflect it’s intrinsic value and 2) the company will not have any near term issues with their revolver.