What changed in this filing

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Item 1. Business

2023-02-24 compared with 2022-02-25 · 142 added, 92 removed, 324 unchanged (42% of the section changed)

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The Company is the sole general partner of, and owns a majority of the ownership interests in, The Macerich Partnership, L.P., a Delaware limited partnership (the "Operating Partnership").

As of December 31, 2021, the Operating Partnership owned or had an ownership interest in 44 regional town centers and five community/power shopping centers.

These 49 regional town centers and community/power shopping centers (which include any adjoining mixed-use improvements) consist of approximately 48 million square feet of gross leasable area (“GLA”) and are referred to herein as the “Centers”.

As of December 31, 2022, the Operating Partnership owned or had an ownership interest in 44 regional town centers (including office, hotel and residential space adjacent to these shopping centers), five community/power shopping centers, one office property and one redevelopment property.

These 51 regional town centers, community/power

shopping centers, office and redevelopment properties consist of approximately 47 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 Joint Venture Centers”), as set forth in “Item 2.

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Recent Developments

Acquisitions:

On August 2, 2022, the Company acquired the remaining 50% ownership interest in two former Sears parcels (Deptford Mall and Vintage Faire Mall) in the MS Portfolio LLC joint venture that it did not previously own for a total purchase price of $24.5 million.

Effective as of August 2, 2022, the Company now owns and has consolidated its 100% interest in these two former Sears parcels in its consolidated financial statements.

Dispositions:

On March 29, 2021, the Company sold Paradise Valley Mall in Phoenix, Arizona to a newly formed joint venture for $100 million, resulting in a gain on sale of assets of approximately $5.6 million.

Concurrent with the sale, the Company elected to reinvest into the new joint venture at a 5% ownership interest.

The Company used the $95.3 million of net proceeds from the sale to pay down its line of credit (See “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”).

On September 17, 2021, the Company sold Tucson La Encantada in Tucson, Arizona for $165.3 million, resulting in a gain on sale of assets of approximately $117.2 million.

The Company used the net cash proceeds of approximately $100.1 million to pay down debt (See “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”).

On December 31, 2021, the Company assigned its joint venture interest in The Shops at North Bridge in Chicago, Illinois to its partner in the joint venture.

The assignment included the assumption by the joint venture partner of the Company’s share of the debt owed by the joint venture and no cash consideration was received by the Company.

The Company recognized a loss of approximately $28.3 million in connection with the assignment.

On December 31, 2021, the Company sold its joint venture interest in the undeveloped property at 443 North Wabash Avenue in Chicago, Illinois to its partner in the joint venture for $21.0 million.

The Company recognized an immaterial gain in connection with the sale.

For the twelve months ended December 31, 2022, 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 $23.9 million.

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Financing Activities:

On January 22, 2021, the Company closed on a one-year extension for the Green Acres Mall $258.2 million loan to February 3, 2022, which also included a one-year extension option to February 3, 2023 which has been exercised.

The interest rate remained unchanged, and the Company repaid $9 million of the outstanding loan balance at closing.

On March 25, 2021, the Company closed on a two-year extension for the Green Acres Commons $124.6 million loan to March 29, 2023.

The interest rate is LIBOR plus 2.75% and the Company repaid $4.7 million of the outstanding loan balance at closing.

On April 14, 2021, the Company terminated its existing credit facility and entered into a new credit agreement, which provides for an aggregate $700 million facility, including a $525 million revolving loan facility that matures on April 14, 2023, with a one-year extension option, and a $175 million term loan facility that matures on April 14, 2024 (See "Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”).

On October 26, 2021, the Company's joint venture in The Shops at Atlas Park replaced the existing loan on the property with a new $65 million loan that bears interest at a floating rate of LIBOR plus 4.15% and matures on November 9, 2026, including extension options.

The loan is covered by an interest rate cap agreement that effectively prevents LIBOR from exceeding 3.0% through November 7, 2023.

On February 2, 2022, the Company’s joint venture in FlatIron Crossing replaced the existing $197.0 million loan on the property with a new $175.0 million loan that bears interest at SOFR plus 3.70% and matures on February 9, 2025, including extension options.

The loan is covered by an interest rate cap agreement that effectively prevents SOFR from exceeding 4.0% through February 15, 2024.

On April 29, 2022, the Company replaced the existing $110.6 million loan on Pacific View with a new $72.0 million loan that bears interest at a fixed rate of 5.29% and matures on May 6, 2032.

On May 6, 2022, the Company closed on a two-year extension for The Oaks loan to June 5, 2024, at a new fixed interest rate of 5.25%.

The Company repaid $5.0 million of the outstanding loan balance at closing.

On July 1, 2022, the Company further extended the loan maturity on Danbury Fair Mall to July 1, 2023.

The interest rate remained unchanged at 5.5%, and the Company repaid $10.0 million of the outstanding loan balance at closing.

The Company did not repay the loan on Towne Mall on its maturity date of November 1, 2022, and has begun the process of transitioning the property to a loan receiver.

On November 14, 2022, the Company’s joint venture in Washington Square extended the maturity date on the $503.0 million loan on the property to November 1, 2026, including extension options.

The loan bears interest at a floating interest rate of SOFR plus 4.0%, subject to an interest rate cap agreement that effectively prevents SOFR from exceeding 4.0% through November 1, 2023.

The joint venture repaid $15.0 million ($9.0 million at the Company's pro rata share) of the loan at closing.

On December 9, 2022, the Company extended the maturity date on the $300.0 million loan on Santa Monica Place to December 9, 2025, including extension options.

The loan bears interest at a floating interest rate of LIBOR plus 1.48%.

On January 3, 2023, the Company replaced the existing $363.0 million of combined loans on Green Acres Mall and Green Acres Commons, both of which were scheduled to mature during the first quarter of 2023, with a $370.0 million loan that bears interest at a fixed rate of 5.90%, is interest only during the entire loan term and matures on January 6, 2028.

On January 20, 2023, the Company exercised its one-year extension option of the loan on Fashion District Philadelphia to January 22, 2024.

The interest rate is SOFR plus 3.60% and the Company repaid $26.1 million of the outstanding loan balance at closing.

The Company’s joint venture that owns Scottsdale Fashion Square expects to replace the existing $406.0 million mortgage loan on the property with a $700.0 million, five-year, fixed-rate loan.

The Company expects the joint venture to close this refinancing during the first quarter of 2023, subject to negotiating final documentation and customary closing conditions.

Redevelopment and Development Activities:

The Company's joint venture with Hudson Pacific Properties is redeveloping One Westside into 584,000 square feet of creative office space and 96,000 square feet of dining and entertainment space.

The entire creative office space has been leased to Google and is expected to be completed in 2022.

During the fourth quarter of 2021, the joint venture delivered the office space to Google for tenant improvement work, which Google has commenced.

The total cost of the project is estimated to be between $500.0 million and $550.0 million, with $125.0 million to $137.5 million estimated to be the Company's pro rata share.

The Company has incurred $106.9 million of the total $427.7 million incurred by the joint venture as of December 31, 2021.

The joint venture expects to fund the remaining costs of the development with its $414.6 million construction loan.

The Company has a 50/50 joint venture with Simon Property Group, which was initially formed to develop Los Angeles Premium Outlets, a premium outlet center in Carson, California.

The Company has funded $38.6 million of the total $77.2 million incurred by the joint venture as of December 31, 2022.

In connection with the closures and lease rejections of several Sears stores owned or partially owned by the Company, the Company anticipates spending between $130.0 million to $160.0 million at the Company’s pro rata share to redevelop the Sears stores.

The anticipated openings of such redevelopments are expected to occur over several years.

The estimated range of redevelopment costs could increase if the Company or its joint venture decides to expand the scope of the redevelopments.

The Company has funded $40.9 million at its pro rata share as of December 31, 2021.

The Company is redeveloping an approximately 150,000 square foot, three-level space (formerly occupied by Bloomingdale’s and Arclight Theatre) at Santa Monica Place, a 527,000 square foot regional town center in Santa Monica, California, with an entertainment destination use, high-end fitness, and co-working space.

The total cost of the project is estimated to be between $35.0 million and $40.0 million.

The Company has incurred approximately $1.2 million as of December 31, 2022.

The anticipated opening is in 2024.

The Company’s joint venture in Scottsdale Fashion Square, a 1,884,000 square foot regional town 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 $80.0 million and $90.0 million, with $40.0 million and $45.0 million estimated to be the Company’s pro rata share.

The Company has incurred $2.6 million of the total $5.1 million incurred by the joint venture as of December 31, 2022.

The anticipated opening is in 2024.

Other Transactions and Events:

In March 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization.

As a result, all of the markets that the Company operates in were subject to stay-at-home orders, and the majority of its properties were temporarily closed in part or completely.

Following staggered re-openings during 2020, all Centers have been open and operating since October 7, 2020.

As of the date of this Annual Report on Form 10-K, government-imposed capacity restrictions resulting from COVID-19 have been essentially eliminated across the Company’s markets.

Although overall fundamentals at the Centers continued to improve during 2021, the Company expects that the COVID-19 pandemic, including the emergence of new variants, will continue to negatively impact its results for 2022 due, in part, to reduced occupancy relative to pre-COVID levels and additional Anchor closures, among other factors.

See “Outlook” in Results of Operations for a further discussion of the forward-looking impact of COVID-19 and the Company’s strategic plan to mitigate the anticipated negative impact on its financial condition and results of operations.

The Company declared a cash dividend of $0.15 per share of its common stock for each quarter in the year ended December 31, 2021.

On January 27, 2022, the Company declared a first quarter cash dividend of $0.15 per share of its common stock, which will be paid on March 3, 2022 to stockholders of record on February 18, 2022.

The Company declared a cash dividend of $0.15 per share of its common stock for each of the first three quarters of 2022 and a cash dividend of $0.17 per share of its common stock for the fourth quarter of 2022.

On January 27, 2023, the Company announced a first quarter cash dividend of $0.17 per share of its common stock, which will be paid on March 3, 2023 to stockholders of record on February 17, 2023.

The dividend amount will be reviewed by the Board on a quarterly basis.

In connection with the commencement of separate "at the market" offering programs, on each of February 1, 2021 and March 26, 2021, which are referred to as the "February 2021 ATM Program" and the "March 2021 ATM Program," respectively, and collectively as the "ATM Programs," the Company entered into separate equity distribution agreements 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 under each of the February 2021 ATM Program and the March 2021 ATM Program, or a total of $1 billion under the ATM Programs.

In connection with the commencement of an "at the market" offering program on March 26, 2021, which is referred to as the "March 2021 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 December 31, 2022, the Company had approximately $151.7 million of gross sales of its common stock available under the March 2021 ATM Program.

The February 2021 ATM Program was fully utilized as of June 30, 2021 and is no longer active.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for a further discussion of the Company’s anticipated liquidity needs, and the measures taken by the Company to meet those needs.

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There are several types of retail shopping centers, which are differentiated primarily based on size and marketing strategy.

Town Centers also typically contain numerous diversified retail stores ("Mall Stores"), most of which are national or regional retailers typically located along corridors connecting the Anchors.

Regional shopping centers generally contain in excess of 400,000 square feet of GLA and are typically anchored by two or more department or large retail stores ("Anchors") and are referred to as "Regional Town Centers" or "Malls." Regional Town Centers also typically contain numerous diversified retail stores ("Mall Stores"), most of which are national or regional retailers typically located along corridors connecting the Anchors.

"Strip centers", "urban villages" or "specialty centers" ("Community/Power Shopping Centers") are retail shopping centers that are designed to attract local or neighborhood customers and are typically anchored by one or more supermarkets, discount department stores and/or drug stores.

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The Company principally focuses on well-located, quality Regional Town Centers that can be dominant in their trade area and have strong revenue enhancement potential.

In addition, the Company pursues other opportunistic acquisitions of property that include retail and will complement the Company's portfolio such as Outlet Centers.

In addition, the Company pursues other opportunistic acquisitions of property that include retail and will complement the Company's portfolio.

The Company subsequently seeks to improve operating performance and returns from these properties through leasing, management and redevelopment.

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On a selective basis, the Company provides property management and leasing services for third parties.

The Company currently manages two regional town centers and two community centers for third party owners on a fee basis.

The Company currently manages one regional town center and two community centers for third party owners on a fee basis.

Redevelopment.

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The Company has supplemented its strong acquisition, operations and redevelopment skills with its ground-up development expertise to further increase growth opportunities.

As of December 31, 2021, the Centers primarily included 44 Regional Town Centers and five Community/Power Shopping Centers totaling approximately 48 million square feet of GLA.

As of December 31, 2022, the Centers primarily included 44 Regional Town Centers (including office, hotel and residential space adjacent to these shopping centers), five Community/Power Shopping Centers, one office property and one redevelopment property totaling approximately 47 million square feet of GLA.

These 51 Centers average approximately 925,000 square feet of GLA and range in size from 3.2 million square feet of GLA at Tysons Corner Center to 185,000 square feet of GLA at Boulevard Shops.

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Portfolio % of Total

Best Buy Co., Inc.

Best Buy 7 2.4 %

H & M Hennes & Mauritz L.P.

Foot Locker, Inc.

Champs Sports, Foot Locker, Kids Foot Locker, Lady Foot Locker, Foot Action, House of Hoops, and others 71 2.3 %

SPARC Group Aeropostale, Brooks Brothers, Eddie Bauer, Forever 21, Lucky Brands, Nautica 72 2.1 %

Victoria's Secret & Co.

Victoria's Secret, PINK 48 2.1 %

Gap, Inc., The Athleta, Banana Republic, Gap, Gap Kids, Old Navy, and others 41 1.9 %

Signet Jewelers Limited Kay Jewelers, Jared, Piercing Pagoda, Zales, and others 94 1.8 %

Pink, Victoria's Secret 43 2.0 %

Signet Jewelers Limited Banter by Piercing Pagoda, Jared, Kay Jewelers, Pandora, Piercing Pagoda, Zales, and others 99 1.9 %

Foot Locker, Inc.

Champs Sports, Foot Locker, House of Hoops by Foot Locker, Kids Foot Locker, and others 64 1.9 %

The Gap, Inc.

Athleta, Banana Republic, Gap, Gap Kids, Old Navy, and others 41 1.9 %

Dick's Sporting Goods, Inc.

Dick's Sporting Goods 17 1.8 %

SPARC Group LLC Aeropostale, Brooks Brothers, Eddie Bauer, Forever 21, Lucky Brand, and others 65 1.7 %

Best Buy Co., Inc.

Best Buy 6 1.5 %

H & M Hennes & Mauritz L.P.

Louis Vuitton, Sephora, and others 32 1.4 %

American Eagle Outfitters, Inc.

American Eagle Outfitters, Aerie 37 1.4 %

Abercrombie & Fitch Co.

Abercrombie & Fitch, Hollister Co.

Aerie, American Eagle Outfitters 36 1.3 %

Mall Stores and Freestanding Stores:

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In some cases, tenants pay only minimum rent, and in other cases, tenants pay only percentage rent.

The Company generally enters into leases for Mall Stores and Freestanding Stores that also require tenants to pay a stated amount for operating expenses, generally excluding property taxes, regardless of the expenses the Company actually incurs at any Center.

However, certain leases for Mall Stores and Freestanding Stores contain provisions that only require tenants to pay their pro rata share of maintenance of the common areas, property taxes, insurance, advertising and other expenditures related to the operations of the Center.

The Company generally enters into leases for Mall Stores and Freestanding Stores that also require tenants to pay their pro rata share of property taxes and to pay a stated amount for operating expenses, excluding property taxes, regardless of the expenses the Company actually incurs at any Center.

However, certain leases for Mall Stores and Freestanding Stores contain provisions that require tenants to pay their pro rata share of maintenance of the common areas, property taxes, insurance, advertising and other expenditures related to the operations of the Center.

Tenant space of 10,000 square feet and under in the Company's portfolio at December 31, 2022 comprises approximately 61% of all Mall Store and Freestanding Store space.

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As a result, space greater than 10,000 square feet has a unique rent structure that is inconsistent with mall space under 10,000 square feet.

The following tables set forth the average base rent per square foot for the Centers, as of December 31 for each of the past five years:

Cost of Occupancy:

A major factor contributing to tenant profitability is cost of occupancy, which consists of tenant occupancy costs charged by the Company.

Tenant occupancy costs include tenant expenses such as minimum rents, percentage rents and recoverable expenditures, which consist primarily of property operating expenses, real estate taxes and repair and maintenance expenditures.

These costs are then compared to tenant sales to present tenant occupancy costs as a percentage of tenant sales.

A low cost of occupancy percentage shows more potential capacity for the Company to increase rents at the time of lease renewal than a high cost of occupancy percentage.

The following table summarizes occupancy costs for Mall Store and Freestanding Store tenants in the Centers as a percentage of total Mall Store sales for the twelve months ended December 31, 2022 and December 31, 2019, the most immediately comparative period prior to the COVID-19 pandemic:

For the Twelve Months Ended December 31,

Consolidated Centers:

Minimum rents 7.4 % 9.1 %

Percentage rents 1.1 % 0.4 %

Expense recoveries(2) 3.1 % 3.6 %

11.6 % 13.1 %

Unconsolidated Joint Venture Centers:

Minimum rents 6.5 % 7.3 %

Percentage rents 1.0 % 0.3 %

Expense recoveries(2) 2.8 % 3.2 %

10.3 % 10.8 %

(1) Cost of Occupancy is compared to the trailing twelve months ended December 31, 2019, the most immediately comparative period prior to the COVID-19 pandemic.

(2) Represents real estate tax and common area maintenance charges.

The following tables set forth the average base rent per square foot for the Centers, as of December 31 for each of the past three years:

Mall Stores and Freestanding Stores under 10,000 square feet:

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2020 $ 59.63 $ 48.06 $ 52.60

2018 $ 56.82 $ 54.00 $ 49.07

2017 $ 55.08 $ 57.36 $ 49.61

Unconsolidated Joint Venture Centers (at the Company's pro rata share):

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2020 $ 66.34 $ 57.23 $ 52.62

2018 $ 63.84 $ 66.95 $ 59.49

2017 $ 60.99 $ 63.50 $ 55.50

Big Box and Anchors:

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2020 $ 17.58 $ 24.14 8 $ 11.03 10

2018 $ 15.29 $ 14.03 23 $ 16.83 13

2017 $ 14.13 $ 18.19 24 $ 14.85 21

Unconsolidated Joint Venture Centers (at the Company's pro rata share):

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2017 $ 16.87 $ 26.33 15 $ 33.25 8

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(1) Average base rent per square foot is based on spaces occupied as of December 31 for each of the Centers and gives effect to the terms of each lease in effect, as of such date, including any concessions, abatements and other adjustments or allowances that have been granted to the tenants.

(2) Centers under development and redevelopment are excluded from average base rents.

As a result, the leases for Fashion District Philadelphia, Paradise Valley Mall and One Westside are excluded for the years ended December 31, 2020, 2019, 2018 and 2017.

Also, the leases for Paradise Valley Mall and One Westside are excluded for the year ended December 31, 2021.

As a result, the leases for Paradise Valley Mall and One Westside are excluded for the years ended December 31, 2022, 2021 and 2020.

(3) The average base rent per square foot on leases executed during the year represents the actual rent paid on a per square foot basis during the first twelve months of the lease.

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by Anchor GLA Leased

by Anchor Total GLA

by Anchor Total Anchor GLA

Macy's 34 4,404,000 1,932,000 6,336,000

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Costco 2 — 321,000 321,000

BJ's Wholesale Club 2 — 238,000 238,000

Von Maur 2 187,000 — 187,000

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Belk 2 — 139,000 139,000

BJ's Wholesale Club 1 — 123,000 123,000

Lowe's 1 — 114,000 114,000

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_______________________________

(1) Target has announced plans to open a three-level 90,000 square foot store at Kings Plaza.

(1) Target has announced plans to open a three-level 90,000 square foot store at Kings Plaza and a two-level 126,000 square foot store at Danbury Fair Mall.

(2) Primark has announced plans to open two new two-level stores at Green Acres Mall and Tysons Corner Center.

(3) Scheels All Sports has announced plans to expand and build a two-level, 222,000 square foot store at Chandler Fashion Center utilizing the vacant 144,000 square foot location formerly occupied by Nordstrom.

(3) Scheels All Sports is building a two-level, 222,000 square foot store at Chandler Fashion Center utilizing the vacant 144,000 square foot location formerly occupied by Nordstrom.

The store is anticipated to open in fall 2023.

(4) The Company is actively seeking replacement tenants or has entered into replacement leases for many of these vacant sites and/or is currently executing on or considering redevelopment opportunities for these locations.

The Company continues to collect rent under the terms of an agreement regarding four of these vacant Anchors.

(5) The Company owns an office building and four stores located at shopping centers not owned by the Company.

Of these four stores, one is leased to Kohl's, and three have been leased for non-Anchor usage.

The Company continues to collect rent under the terms of an agreement regarding five of these vacant Anchors.

(5) The Company owns an office building and three stores located at shopping centers not owned by the Company.

Of these three stores, one is leased to Kohl's, and two have been leased for non-Anchor usage.

Governmental Regulations

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Qualification and taxation as a REIT depends on the Company's ability to meet certain dividend distribution tests, share ownership requirements and various qualification tests prescribed in the Code.

Supplemental Material United States Federal Income Tax Considerations

The following discussion supplements and updates the disclosures under “Material United States Federal Income Tax Considerations” in the prospectus dated August 5, 2020, contained in the Company’s Registration Statement on Form S-3 filed with the SEC on August 5, 2020 (such disclosure, the “Base Disclosure”).

Capitalized terms used in this section that are not otherwise defined shall have the same meaning as when used in the Base Disclosure.

On December 29, 2022, the IRS promulgated final Treasury Regulations under Sections 897, 1441, 1445, and 1446 of the Code that were, in part, intended to coordinate various withholding regimes for non-U.S.

stockholders.

The new Treasury Regulations provide that:

(i) The withholding rules applicable to ordinary REIT dividends paid to a non-U.S.

stockholder (generally, a 30% rate of withholding on gross amounts unless otherwise reduced by treaty or effectively connected with such non-U.S.

stockholder’s trade or business within the U.S.

and proper certifications are provided) will apply to (a) that portion of any distribution paid by the Company that is not designated as a capital gain dividend, a return of basis or a distribution in excess of the non-U.S.

stockholder’s adjusted basis in its stock that is treated as gain from the disposition of such stock and (b) any portion of a capital gain dividend paid by the Company that is not treated as gain attributable to the sale or exchange of a U.S.

real property interest by reason of the recipient not owning more than

10% of a class of the Company's stock that is regularly traded on an established securities market during the one-year period ending on the date of the capital gain dividend.

(ii) The withholding rules under FIRPTA will apply to a distribution paid by the Company in excess of a non-U.S.

stockholder’s adjusted basis in the Company's stock, unless the interest in the Company's stock is not a U.S.

real property interest (for example, because the Company is a domestically controlled qualified investment entity) or the distribution is paid to a “withholding qualified holder.” A “withholding qualified holder” means a qualified holder (as defined below) and a foreign partnership all of the interests of which are held by qualified holders, including through one or more partnerships.

(iii) The withholding rules under FIRPTA will apply to any portion of a capital gain dividend paid to a non-U.S.

stockholder that is attributable to the sale or exchange of a U.S.

real property interest, unless it is paid to a withholding qualified holder.

In the case of FIRPTA withholding under clause (ii) above, the applicable withholding rate is currently 15%, and in the case of FIRPTA withholding under clause (iii) above, the withholding rate is currently 21%.

For purposes of FIRPTA withholding under clause (iii), whether a capital gain dividend is attributable to the sale or exchange of a U.S.

real property interest is determined taking into account the general exception from FIRPTA distribution treatment for distributions paid to certain non-U.S.

stockholders under which any distribution by the Company to a non-U.S.

stockholder with respect to any class of stock which is regularly traded on an established securities market located in the United States is not treated as gain recognized from the sale or exchange of a U.S.

real property interest if such non-U.S.

stockholder did not own more than 10% of such class of stock at any time during the one-year period ending on the date of such distribution.

To the extent inconsistent, these Treasury Regulations supersede the discussion on withholding contained in the Base Disclosure under the heading “Material United States Federal Income Tax Considerations—Taxation of Non-U.S.

Stockholders.” However, if, notwithstanding these Treasury Regulations, the Company encounters difficulties in properly characterizing a distribution for purposes of the withholding rules, the Company may decide to withhold on such distribution at the highest possible U.S.

federal withholding rate that the Company determines could apply.

New Treasury Regulations also provide new guidance regarding qualified foreign pension funds.

Accordingly, the fifth paragraph under the heading “Material United States Federal Income Tax Considerations—Taxation of Non-U.S.

Stockholders—Dispositions of Stock” is hereby deleted and replaced with the following:

In general, for FIRPTA purposes, and subject to the discussion below regarding “qualified holders,” neither a “qualified foreign pension fund” (as defined below) nor any entity all of the interests of which are held by a qualified foreign pension fund is treated as a foreign person, thereby exempting such entities from tax under FIRPTA (as described further below).

A “qualified foreign pension fund” is an organization or arrangement (i) created or organized in a foreign country, (ii) established by a foreign country (or one or more political subdivisions thereof) or one or more employers to provide retirement or pension benefits to current or former employees (including self-employed individuals) or their designees as a result of, or in consideration for, services rendered, (iii) which does not have a single participant or beneficiary that has a right to more than 5% of its assets or income, (iv) which is subject to government regulation and with respect to which annual information about its beneficiaries is provided, or is otherwise available, to relevant local tax authorities, and (v) with respect to which, under its local laws, (A) contributions that would otherwise be subject to tax are deductible or excluded from its gross income or taxed at a reduced rate, or (B) taxation of its investment income is deferred, or such income is excluded from its gross income or taxed at a reduced rate.

Under Treasury Regulations, subject to the discussion below regarding “qualified holders,” a “qualified controlled entity” also is not generally treated as a foreign person for purposes of FIRPTA.

A qualified controlled entity generally includes a trust or corporation organized under the laws of a foreign country all of the interests of which are held by one or more qualified foreign pension funds either directly or indirectly through one or more qualified controlled entities.

Treasury Regulations further require that a qualified foreign pension fund or qualified controlled entity will not be exempt from FIRPTA with respect to dispositions of U.S.

real property interests or REIT distributions attributable to the same unless the qualified foreign pension fund or qualified controlled entity is a “qualified holder.” To be a qualified holder, a qualified foreign pension fund or qualified controlled entity must satisfy one of two alternative tests at the time of the disposition of the U.S.

real property interest or the REIT distribution.

Under the first test, a qualified foreign pension fund or qualified controlled entity is a qualified holder if it owned no U.S.

real property interests as of the earliest date during an uninterrupted period ending on the date of the disposition or distribution during which it qualified as a qualified foreign pension fund or qualified controlled entity.

Alternatively, if a qualified foreign pension fund or qualified controlled entity held U.S.

real property interests as of the earliest date during the period described in the preceding sentence, it can be a qualified holder only if it satisfies certain testing period requirements.

Treasury Regulations also provide that a foreign partnership all of the interests of which are held by qualified holders, including through one or more partnerships, may certify its status as such and will not be treated as a foreign person for purposes of withholding under Section 1445 of the Code (and Section 1446 of the Code, as applicable).

Distributions that are attributable to gain from the sales of USRPIs received by qualified foreign pension funds or qualified controlled entities will not be subject to U.S.

federal income or withholding tax.

All other distributions received by qualified foreign pension funds or qualified controlled entities will be taxed as described above under “Material United States Federal Income Tax Considerations—Taxation of Non-U.S.

Stockholders—Dividends.” Gain of a qualified foreign pension fund or qualified controlled entity from the sale or exchange of the Company's stock and distributions treated as gain from the sale or exchange of the Company's stock under the rules described above under “Material United States Federal Income Tax Considerations—Taxation of Non-U.S.

Stockholders—Dividends,” will not be subject to U.S.

federal income or withholding tax, unless such gain is treated as effectively connected with the qualified foreign pension fund’s (or the qualified controlled entity’s, as applicable) conduct of a U.S.

trade or business, in which case, the qualified foreign pension fund (or qualified controlled entity) generally will be subject to a tax at the same graduated rates applicable to U.S.

stockholders, unless an applicable income tax treaty provides otherwise, and may be subject to the 30% branch profits tax on its effectively connected earnings and profits, subject to adjustments, in the case of a foreign corporation.

Employees and Human Capital

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As an equal opportunity employer, it is committed to diversity, recognition and inclusion and rewards its employees based on merit and their contributions in accordance with the principles and requirements of the Equal Employment Opportunities Commission and the principles and requirements of the ADA.

orientation, gender identity, disability, protected veteran status or any other characteristic protected by local, state or federal laws.

As of December 31, 2021, approximately 58% and 28% of the Company’s employees were female and non-white, respectively.

The Company’s policies set forth its commitment to provide equal employment opportunity and to recruit, hire and promote at all levels without regard to race, national origin, religion, age, color, sex, sexual orientation, gender identity, disability, protected veteran status or any other characteristic protected by local, state or federal laws.

As of December 31, 2022, approximately 59% of the Company’s employees identified as female.

Of the total employee population, approximately 30% identified as belonging to an underrepresented group and approximately <1% did not specify race or ethnicity.

In addition to diversity across its employee base, the Company is also committed to increasing diversity in leadership positions.

Building on progress in leadership representation seen in 2021 where individuals identifying as female accounted for 56% of promotions at the Senior Vice President level, individuals identifying as female accounted for 67% of promotions at the Vice President level and individuals identifying as female from underrepresented groups accounted for 33% of all promotions at the Vice President level in 2022.

Employee Compensation and Benefits:

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In addition to training programs geared towards specific job functions, the Company offers training related to company policies, diversity, skill development, privacy and cybersecurity.

In 2020, the Company launched its first-ever diversity, equity and inclusion (“DE&I”) training module designed to broaden employee understanding of DE&I and how embracing of diversity furthers organizational goals.

The Company believes these training and development opportunities support workforce retention.

As of December 31, 2021, the average tenure of the Company’s employees is approximately 11.6 years and that of the Company’s senior management is 20 years.

In furtherance of the value it places on talent development, in 2022 the Company began work on the design and implementation of a unified platform available to all employees that supports training and education related to compliance, inclusion and professional development and plans to launch it in Q1 2023.

As of December 31, 2022, the average tenure of the Company’s employees was approximately 11.6 years and that of the Company’s senior management was 20 years.

In 2022, the Company’s workforce turnover rate was 14%, which includes all employees.

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The Company is also committed to ensuring that the operations at all of its Centers and corporate offices are conducted in a manner that safeguards the health and safety of employees, tenants, contractors, customers and members of the public who are either present at, or affected by, its operations.

This commitment became supremely important as a result of the unique challenges posed by the COVID-19 pandemic and the Company continues to work with all stakeholders to mitigate the pandemic’s impact.

The Company has developed and implemented a long list of operational protocols at each of its Centers and its offices that meet or exceed recommendations from the Centers for Disease Control and Prevention and are designed to ensure the safety of its employees, tenants, service providers and shoppers.

The Company has implemented a long list of operational protocols at each of its Centers and its offices that are designed to ensure the safety of its employees, tenants, service providers and shoppers.

These protocols were originally developed and implemented in response to the COVID-19 pandemic and meet or exceed recommendations from the Centers for Disease Control and Prevention.

All of the Company’s retail properties achieved SafeGuard certification from Bureau Veritas, an internationally recognized testing and certification board.

This program is considered to be the gold standard audit for disinfection, cleaning and COVID-19 safety protocols.

Management’s Discussion And Analysis of Financial Condition And Results of Operations—Management’s Overview and Summary—Other Transactions and Events.”

The shopping center industry is seasonal in nature, particularly in the fourth quarter during the holiday season when retailer occupancy and retail sales are typically at their highest levels.

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Sustainability

A recognized leader in sustainability, the Company has achieved the #1 GRESB ranking in the North American Retail Sector for seven straight years 2015 – 2021.

Additional information about the Company’s Environmental, Social and

Governance programs can be obtained from the Company's website at w ww.macerich.com .

A recognized leader in sustainability, the Company has achieved the #1 GRESB ranking in the North American Retail Sector for eight straight years 2015 – 2022.

A copy of the Company's Corporate Responsibility Report, as well as additional information about the Company’s Environmental, Social and Governance programs can be obtained from the Company's website at w ww.macerich.com under "Investors—Corporate Responsibility".

Information provided on the Company's website is not incorporated by reference into this Form 10-K.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business