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Item 7. Management’s Discussion and Analysis

2025-02-28 compared with 2024-02-26 · 227 added, 159 removed, 276 unchanged (58% 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 Operating Partnership.

As of December 31, 2023, the Operating Partnership owned or had an ownership interest in 43 Regional Town Centers (including office, hotel and residential space adjacent to these shopping centers), three community/power shopping centers and one redevelopment property.

These 47 Regional Town Centers, community/power shopping centers and one redevelopment property consist of approximately 46 million square feet of gross leasable area (“GLA”) and are referred to herein as the “Centers”.

As of December 31, 2024, the Operating Partnership owned or had an ownership interest in 40 Regional Retail Centers (including office, hotel and residential space adjacent to these shopping centers), two community/power shopping centers and one redevelopment property.

These 43 Regional Retail Centers, community/power shopping centers and one redevelopment property consist of approximately 43 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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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 MS Portfolio LLC, the Company's joint venture with Seritage 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 (See Note 15—Acquisitions in the Notes to the Consolidated Financial Statements).

On May 18, 2023, the Company acquired Seritage’s remaining 50% ownership interest in the MS Portfolio LLC joint venture that owns five former Sears parcels, for a total purchase price of approximately $46.7 million.

On May 18, 2023, the Company acquired Seritage’s remaining 50% ownership interest in the MS Portfolio LLC joint venture that owned five former Sears parcels, for a total purchase price of approximately $46.7 million.

These parcels are located at Chandler Fashion Center, Danbury Fair Mall, Freehold Raceway Mall, Los Cerritos Center and Washington Square.

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On December 9, 2023, the Company acquired its joint venture partner’s 50% interest in Fashion District Philadelphia for no consideration, and the Company now owns 100% of this property.

Prior to December 9, 2023, due to the Company’s joint venture partner having no substantive participation rights, the Company accounted for this joint venture as a VIE in its consolidated financial statements (See Note 2 – Summary of Significant Accounting Policies and Note 15 – Acquisitions in the Notes to the Consolidated Financial Statements).

Prior to December 9, 2023, due to the Company’s joint venture partner having no substantive participation rights, the Company accounted for this joint venture as a consolidated variable interest entity in its consolidated financial statements (See Note 2—Summary of Significant Accounting Policies and Note 15—Acquisitions in the Notes to the Consolidated Financial Statements).

On May 14, 2024, the Company acquired its joint venture partner's 40% interest in each of Arrowhead Towne Center and South Plains Mall for a purchase price of $36.4 million and the assumption of its joint venture partner's share of debt for each property.

The Company now owns and has consolidated its 100% interests in Arrowhead Towne Center and South Plains Mall (See Note 15—Acquisitions in the Notes to the Consolidated Financial Statements).

On May 17, 2024, the Company acquired the former Sears parcel located at Inland Center for $5.4 million (See Note 15—Acquisitions in the Notes to the Consolidated Financial Statements).

On October 24, 2024, the Company acquired its joint venture partner's 40% interest in the Pacific Premier Retail Trust portfolio, which included Los Cerritos Center, Washington Square and Lakewood Center, for a net purchase price of approximately $122.1 million, which included the assumption of the partner's share of property level indebtedness.

The Company now owns and has consolidated its 100% interests in these properties in its consolidated financial statements (See Note 15—Acquisitions in the Notes to the Consolidated Financial Statements).

Dispositions:

On March 29, 2021, the Company sold Paradise Valley Mall in Phoenix, Arizona to a newly formed joint venture for $100.0 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.

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.

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.

The Company used its share of the proceeds from these sales of $60.3 million to pay down debt and for other general corporate purposes.

On May 2, 2023, the Company sold The Marketplace at Flagstaff, a 268,000 square foot power center in Flagstaff, Arizona, for $23.5 million, which resulted in a gain on sale of assets of $10.3 million.

The Company used the net proceeds to pay down debt.

(See "Liquidity and Capital Resources").

On July 17, 2023, the Company sold Superstition Springs Power Center, a 204,000 square foot power center in Mesa, Arizona, for $5.6 million, which resulted in a gain on sale of assets of $1.9 million.

The Company used the net proceeds to pay down debt.

(See "Liquidity and Capital Resources").

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

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The Company used its share of the proceeds from these sales of $16.4 million to pay down debt and for other general corporate purposes.

On June 13, 2024, the partnership agreement between the Company and its joint venture partner was amended and as a result, the Company no longer accounts for its investment in Chandler Fashion Center as a financing arrangement.

Effective June 13, 2024, the Company accounts for its investment in Chandler Fashion Center under the equity method of accounting (See Note 12—Financing Arrangement and Note 16—Dispositions in the Notes to the Consolidated Financial Statements).

On June 28, 2024, the Company's joint venture sold Country Club Plaza, a 971,000 square foot regional retail center in Kansas City, Missouri, for $175.6 million.

Concurrent with the sale, the remaining amount owed by the joint venture under the $295.5 million loan ($147.7 million at the Company's share) was forgiven by the lender.

On June 28, 2024, the Company sold a former department store parcel at Valle Vista Mall in Harlingen, Texas for $7.1 million.

The Company used the net proceeds to pay down debt.

The Company recognized a gain on sale of assets of $0.8 million (See Note 16—Dispositions in the Notes to the Consolidated Financial Statements).

On July 31, 2024, the Company sold its 50% interest in Biltmore Fashion Park, a 611,000 square foot regional retail center in Phoenix, Arizona, for $110.0 million.

The Company used the net proceeds to pay down debt.

As a result of this transaction, the Company recognized a gain of $42.8 million (See "Liquidity and Capital Resources" and Note 4—Investments In Unconsolidated Joint Ventures in the Notes to the Consolidated Financial Statements).

On November 25, 2024, the Company sold Southridge Mall, a 791,000 square foot power center in Des Moines, Iowa, for $4.0 million, which resulted in a loss on sale of assets of $0.9 million.

The Company used the net proceeds to pay down debt.

On December 10, 2024, the Company sold The Oaks, a 1,206,000 square foot regional retail center in Thousand Oaks, California, for $157.0 million, which resulted in a loss on sale of assets of $6.9 million.

The Company used the net proceeds to pay off the $147.8 million loan on the property.

For the twelve months ended December 31, 2024, the Company and certain joint venture partners sold various land parcels in separate transactions, resulting in the Company's share of the gain on sale of land of $2.8 million.

The Company used its share of the proceeds from these sales of $6.1 million to pay down debt and for other general corporate purposes.

The Company is under contract to sell Wilton Mall for $24.8 million, which is expected to close in the first half of 2025, subject to customary closing conditions.

This asset is unencumbered.

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 that has been exercised.

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

As discussed below, the Company replaced this loan prior to its maturity date.

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.

As discussed below, the Company replaced this loan prior to its maturity date.

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.

The Company drew the $175 million term loan facility in its entirety simultaneously with entering into the new credit agreement in April 2021 and subsequently paid off the remaining balance outstanding on the term loan facility with proceeds from the sale of Tucson La Encantada in September 2021.

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% (converted to SOFR plus 4.26% on April 7, 2023) and matures on November 9, 2026, including extension options.

The loan was covered by an interest rate cap

agreement that effectively prevented LIBOR/SOFR from exceeding 3.0% through November 7, 2023.

The interest rate cap has since been extended and effectively prevents SOFR from exceeding 5.76% through November 7, 2024.

During the year ended December 31, 2021, the Company repaid $1.7 billion of debt then outstanding, including the $985 million repaid in connection with entering into the new credit agreement in April 2021.

These repaid amounts represented an approximately 20% reduction in the debt outstanding, at the Company’s share, since December 31, 2020.

On February 2, 2022, the Company’s joint venture in FlatIron Crossing replaced the existing $197 million loan on the property with a new $175 million loan that bears interest at SOFR plus 3.70% and matures on February 9, 2025.

The loan is covered by an interest rate cap agreement that effectively prevents SOFR from exceeding 4.0% through February 15, 2024 and 5.0% through February 9, 2025.

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 bore interest at SOFR plus 3.70% and matured on February 9, 2025.

The loan was covered by an interest rate cap agreement that effectively prevented SOFR from exceeding 4.0% through February 15, 2024 and 5.0% through February 9, 2025.

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.

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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, 2024.

The loan bore interest at a floating interest rate of SOFR plus 4.0%, subject to an interest rate cap agreement that effectively prevented SOFR from exceeding 4.0% through November 1, 2024.

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

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

On March 3, 2023, the Company’s joint venture in Scottsdale Fashion Square replaced the existing $403.9 million mortgage loan on the property with a new $700.0 million loan that bears interest at a fixed rate of 6.21%, is interest only during the entire loan term and matures on March 6, 2028.

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Effective May 9, 2023, the Company’s joint venture in Country Club Plaza defaulted on the $295.2 million ($147.6 million at the Company's pro rata share) non-recourse loan on the property.

The Company’s joint venture is in negotiations with the lender on the terms of this non-recourse loan.

The Company’s joint venture subsequently sold the property on June 28, 2024 and the remaining amount owed by the joint venture was forgiven by the lender.

On June 27, 2023, the Company closed on a one-year extension on the $133.5 million loan on Danbury Fair Mall to July 1, 2024.

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On September 11, 2023, the Company and Operating Partnership entered into an amended and restated credit agreement, which amended and restated their prior $525.0 million credit agreement, and provides for an aggregate $650.0 million revolving loan facility that matures on February 1, 2027, with a one-year extension option.

Concurrently with the entry into the amended and restated credit agreement, the Company drew $152 million of the amount available under the revolving loan facility and

used the proceeds to repay in full amounts outstanding under the Company’s prior credit facility.

Concurrently with the entry into the amended and restated credit agreement, the Company drew $152.0 million of the amount available under the revolving loan facility and used the proceeds to repay in full amounts outstanding under the Company’s prior credit facility.

(See “Liquidity and Capital Resources”).

Effective October 6, 2023, the Company's $86.5 million loan on Fashion Outlets of Niagara Falls is in default.

The Company is in negotiations with the lender on the terms of this non-recourse loan.

Effective October 6, 2023, the Company's $86.5 million loan on Fashion Outlets of Niagara Falls was in default.

On March 19, 2024, the Company closed a three-year extension of the $84.7 million loan on Fashion Outlets of Niagara Falls.

The scheduled outstanding $1.8 million principal payments were applied at closing.

The extended loan bears the same fixed interest rate of 5.90%, and matures on October 6, 2026.

On December 4, 2023, the Company's joint venture in Tysons Corner Center replaced the existing $666.5 million mortgage loan on the property with a new $710.0 million loan that bears interest at a fixed rate of 6.60%, is interest only during the entire loan term and matures on December 6, 2028.

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On January 22, 2024, the Company repaid the majority of the mortgage loan on Fashion District Philadelphia.

The remaining $8.2 million matures on April 21, 2024.

The remaining $8.2 million was scheduled to mature on April 21, 2024 and was paid in full prior to maturity.

On January 25, 2024, the Company replaced the existing $116.9 million mortgage loan on Danbury Fair Mall with a new $155.0 million loan that bears interest at a fixed rate of 6.39%, is interest only during the majority of the loan term and matures on February 6, 2034.

On April 9, 2024, the Company defaulted on the $300.0 million loan on Santa Monica Place.

The Company is in negotiations with the lender on the terms of this non-recourse loan.

On May 24, 2024, the Company closed a two-year extension of the $149.9 million loan on The Oaks, which was scheduled to mature on June 5, 2026.

The interest rate during the first year of the extended term was 7.5% and would have increased to 8.5% during the second year of the extended term.

On December 10, 2024, the Company repaid in full the $147.8 million loan with the net proceeds from the sale of the property (See "Dispositions").

On June 27, 2024, the Company's joint venture in Chandler Fashion Center replaced the existing $256.0 million loan on the property with a new $275.0 million loan that bears interest at 7.06%, is interest only during the entire loan term and matures on July 1, 2029.

The Company received a distribution of $17.7 million in connection with the refinancing.

On August 22, 2024, the Company closed an $85.0 million, ten-year refinance of the loan on The Mall of Victor Valley.

The new loan bears interest at a fixed rate of 6.72%, is interest only during the entire loan term and matures on September 6, 2034.

On October 28, 2024, the Company closed a $525.0 million, five-year refinance of the loan on Queens Center, which matures on November 6, 2029.

The new loan replaced the existing $600.0 million loan, bears interest at a fixed rate of 5.37% and is interest only during the entire loan term.

On December 2, 2024, the Company repaid in full the $478.0 million loan on Washington Square with the net proceeds received from the Company’s public stock offering, which closed on November 27, 2024, together with cash on hand (See “Other Transactions and Events”).

The mortgage loan on the property was scheduled to mature on November 1, 2026.

The Company recognized a gain on extinguishment of debt of $14.4 million upon the repayment of the loan.

On February 7, 2025, the Company's joint venture in Flatiron Crossing repaid in full the $14.5 million mezzanine loan and $14.5 million of the first mortgage, and obtained a 90-day extension for the remaining $140.5 million of the first mortgage.

The mezzanine loan had an interest rate of SOFR plus 12.25% and the first mortgage has an interest rate of SOFR plus 2.90% for a weighted average aggregate interest rate of SOFR plus 3.70%.

The interest rate on the first mortgage is SOFR plus 2.90% during the extension period.

Redevelopment and Development Activities:

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 $39.5 million of the total $78.9 million incurred by the joint venture as of December 31, 2023.

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 534,000 square foot regional town center in Santa Monica, California, with an entertainment destination use, high-end fitness, and other retail uses.

During the first quarter of 2024, the Company evaluated its investment and concluded that due to certain conditions, the Company should not continue to invest capital in this development project.

As a result, the Company wrote-off its share of the investment in the three months ended March 31, 2024.

At the time of the write-off, the Company had funded $39.5 million of the total $78.9 million incurred by the joint venture (See Note 4 – Investments in Unconsolidated Joint Ventures in the Notes to the Consolidated Financial Statements).

The Company’s joint venture in Scottsdale Fashion Square, a 1,875,000 square foot regional retail center in Scottsdale, Arizona, is redeveloping a two-level Nordstrom wing with luxury-focused retail and restaurant uses.

The total cost of the

project is estimated to be between $84.0 million and $90.0 million, with $42.0 million to $45.0 million estimated to be the Company’s pro rata share.

The Company has incurred $25.9 million of the total $51.8 million incurred by the joint venture as of December 31, 2024.

The opening will be in phases which began in 2024, with anticipated completion in 2025.

The Company is redeveloping the northeast quadrant of Green Acres Mall, a 2,058,000 square foot regional retail center in Valley Stream, New York.

The project will include new exterior shops and facade totaling approximately 385,000 square feet of leasing, including new grocery use, redevelopment of a vacant anchor building and demolition of another vacant anchor building.

The total cost of the project is estimated to be between $120.0 million and $140.0 million.

The Company has incurred approximately $19.7 million as of December 31, 2024.

The anticipated opening will happen in phases beginning in 2024 through 2025.

The Company’s joint venture in Scottsdale Fashion Square, an approximately 1,871,000 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 $86.0 million, with $40.0 million and $43.0 million estimated to be the Company’s pro rata share.

The Company has incurred $21.0 million of the total $42.0 million incurred by the joint venture as of December 31, 2023.

The anticipated opening is in 2026.

The Company’s joint venture in FlatIron Crossing, a 1,390,000 square foot regional retail center in Broomfield, Colorado, is developing luxury, multi-family residential units, new/repurposed retail and food and beverage uses, and a community plaza, in addition to the redevelopment of the vacant former Nordstrom store located on the property.

The Company's ownership percentage is expected to be 43.4% in the residential portion of the development and 51.0% in the remainder of the property.

The total cost of the project is estimated to be between $240.0 million and $260.0 million, with $120.0 million to $130.0 million estimated to be the Company’s pro rata share.

The Company has incurred $9.1 million of the total $17.9 million incurred by the joint venture as of December 31, 2024.

The anticipated opening will be in phases beginning in 2027.

Other Transactions and Events:

The Company declared a cash dividend of $0.17 per share of its common stock for each quarter in the year ended December 31, 2024.

On February 2, 2024, the Company announced a first quarter cash dividend of $0.17 per share of its common stock, which will be paid on March 4, 2024 to stockholders of record on February 16, 2024.

On February 14, 2025, the Company announced a first quarter cash dividend of $0.17 per share of its common stock, which will be paid on March 18, 2025 to stockholders of record on March 4, 2025.

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.

As of December 31, 2023, 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.

In connection with the commencement of an “at the market” offering program on March 26, 2021, which is referred to as the “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 $500.0 million.

During the twelve months ended December 31, 2024, the Company sold 9.4 million shares of common stock for approximately $148.6 million of net proceeds through the 2021 ATM Program at a weighted average share price of $15.81.

The 2021 ATM Program was fully utilized as of September 30, 2024 and is no longer active.

In connection with the commencement of a separate “at the market” offering program on November 12, 2024, which is referred to as the “2024 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 $500.0 million.

During the twelve months ended December 31, 2024, the Company sold 3.7 million shares of common stock for approximately $69.1 million of net proceeds through the 2024 ATM Program at a weighted average price of $18.68.

As of December 31, 2024, the Company had approximately $429.3 million of gross sales of its common stock available under the 2024 ATM Program.

On November 27, 2024, the Company completed a public offering of 23.0 million shares of its common stock at a price per share of $19.75, which includes the underwriters' full exercise of their option to purchase an additional 3.0 million shares, for gross proceeds of approximately $454.3 million.

The net proceeds of the offering were approximately $439.5 million after deducting the underwriting discount and offering costs of approximately $14.8 million.

The Company used the proceeds from the offering, together with cash on hand, to repay the mortgage loan secured by its Washington Square property.

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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Additionally, most leases require the tenants to pay their pro rata share of property taxes and utilities.

Inflation is expected to have a negative impact on the Company's costs in 2023 and 2024.

Inflation had a negative impact on the Company's costs in 2024 and is expected to continue to have a negative impact on the Company's costs in 2025.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The preparation of financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

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In considering whether or not a lessee will execute a below-market fixed-rate lease renewal option, the Company evaluates economic factors and certain qualitative factors at the time of acquisition such as tenant mix in the Center, the Company's relationship with the tenant and the availability of competing tenant space.

Remeasurement gains and losses are recognized when the Company becomes the primary beneficiary of an existing equity method investment that is a variable interest entity to the extent that the fair value of the existing equity investment exceeds the carrying value of the investment, and remeasurement losses to the extent the carrying value of the investment exceeds the fair value.

Remeasurement gains are recognized when the Company becomes the primary beneficiary of an existing equity method investment that is a variable interest entity to the extent that the fair value of the existing equity investment exceeds the carrying value of the investment, and remeasurement losses are recognized to the extent the carrying value of the investment exceeds the fair value.

The fair value is determined based on a discounted cash flow model, with the significant unobservable inputs including discount rate, terminal capitalization rate and market rents.

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The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The Company calculates the fair value of financial instruments and includes this additional information in the notes to consolidated financial statements when the fair value is different than the carrying value of those financial instruments.

The Company calculates the fair value of financial instruments and includes this additional information in the Notes to the Consolidated Financial Statements when the fair value is different than the carrying value of those financial instruments.

When the fair value reasonably approximates the carrying value, no additional disclosure is made.

The Company records its financing arrangement (See Note 12—Financing Arrangement in the Company's Notes to the Consolidated Financial Statements) obligation at fair value on a recurring basis with changes in fair value being recorded as interest expense in the Company’s consolidated statements of operations.

The fair value is determined based on a discounted cash flow model, with the significant unobservable inputs including discount rate, terminal capitalization rate, and market rents.

The fair value of the financing arrangement obligation is sensitive to these significant unobservable inputs and a change in these inputs may result in a significantly higher or lower fair value measurement.

The Company recorded its financing arrangement (See Note 12—Financing Arrangement in the Company's Notes to the Consolidated Financial Statements) obligation at fair value on a recurring basis with changes in fair value being recorded as interest income or expense in the Company’s consolidated statements of operations.

The fair value was determined based on a discounted cash flow model, with the significant unobservable inputs including discount rate, terminal capitalization rate, and market rents.

The fair value of the financing arrangement obligation was sensitive to these significant unobservable inputs and a change in these inputs may result in a significantly higher or lower fair value measurement.

Results of Operations

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For purposes of the discussion below, the Company defines "Same Centers" as those Centers that are substantially complete and in operation for the entirety of both periods of the comparison.

Non-Same Centers for comparison purposes include those Centers or properties that are going through a substantial redevelopment often resulting in the closing of a portion of the Center (“Redevelopment Properties”), those properties that have recently transitioned to or from equity method joint ventures to or from consolidated assets ("JV Transition Centers") and properties that have been disposed of ("Disposition

Properties").

The Company moves a Center in and out of Same Centers based on whether the Center is substantially complete and in operation for the entirety of both periods of the comparison.

Accordingly, the Same Centers consist of all consolidated Centers, excluding the Redevelopment Properties, the JV Transition Centers and the Disposition Properties for the periods of comparison.

For the comparison of the year ended December 31, 2023 to the year ended December 31, 2022 and the comparison of the year ended December 31, 2022 to the year ended December 31, 2021, there are no Redevelopment Properties.

For the comparison of the year ended December 31, 2023 to the year ended December 31, 2022, the JV Transition Centers are the two former Sears parcels at Deptford Mall and Vintage Faire Mall, the five former Sears parcels at Chandler Fashion Center, Danbury Fair Mall, Freehold Raceway Mall, Los Cerritos Center and Washington Square (See "Acquisitions" in Management's Overview and Summary), and for the comparison of the year ended December 31, 2022 to the year ended December 31, 2021, the JV Transition Centers are the two former Sears parcels at Deptford Mall and Vintage Faire Mall.

For the comparison of the year ended December 31, 2023 to the year ended December 31, 2022, the Disposition Properties are The Marketplace at Flagstaff, Superstition Springs Power Center and Towne Mall (See "Dispositions" in Management's Overview and Summary), and for the comparison of the year ended December 31, 2022 to the year ended December 31, 2021, the Disposition Properties are Paradise Valley Mall and Tucson La Encantada.

Accordingly, the Same Centers consist of all Consolidated Centers, excluding the Redevelopment Properties, the JV Transition Centers, Santa Monica Place and the Disposition Properties for the periods of comparison.

Santa Monica Place is excluded from Same Centers due to the Company's default on the non-recourse loan on April 9, 2024.

For the comparison of the year ended December 31, 2024 to the year ended December 31, 2023, the Redevelopment Properties are Green Acres Mall and Fashion District Philadelphia.

For the comparison of the year ended December 31, 2023 to the year ended December 31, 2022, there are no Redevelopment Properties.

For the comparison of the year ended December 31, 2024 to the year ended December 31, 2023, the JV Transition Centers are Arrowhead Towne Center, Chandler Fashion Center, Lakewood Center, Los Cerritos Center, Washington Square,

South Plains Mall and the five former Sears parcels located at Chandler Fashion Center, Danbury Fair Mall, Freehold Raceway Mall, Los Cerritos Center and Washington Square (See "Acquisitions" in Management's Overview and Summary), and for the comparison of the year ended December 31, 2023 to the year ended December 31, 2022, the JV Transition Centers are the two former Sears parcels at Deptford Mall and Vintage Faire Mall, the five former Sears parcels at Chandler Fashion Center, Danbury Fair Mall, Freehold Raceway Mall, Los Cerritos Center and Washington Square.

For the comparison of the year ended December 31, 2024 to the year ended December 31, 2023, the Disposition Properties are The Oaks, The Marketplace at Flagstaff, Southridge Mall, Superstition Springs Power Center, Towne Mall and a former department store parcel at Valle Vista Mall (See "Dispositions" in Management's Overview and Summary), and for the comparison of the year ended December 31, 2023 to the year ended December 31, 2022, the Disposition Properties are The Marketplace at Flagstaff, Superstition Springs Power Center and Towne Mall.

Unconsolidated joint ventures are reflected using the equity method of accounting.

The Company's pro rata share of the results from these Centers is reflected in the consolidated statements of operations as equity in income (loss) of unconsolidated joint ventures.

The Company's pro rata share of the results from these Centers is reflected in the Consolidated Statements of Operations as equity in loss of unconsolidated joint ventures.

The Company considers tenant annual sales, occupancy rates (excluding large retail stores or "Anchors") and releasing spreads (i.e.

a comparison of initial average base rent per square foot on leases executed during the trailing twelve months to average base rent per square foot at expiration for the leases expiring during the trailing twelve months based on the spaces 10,000 square feet and under) to be key performance indicators of the Company's internal growth.

During the trailing twelve months ended December 31, 2023, comparable tenant sales for spaces less than 10,000 square feet across the portfolio decreased by 1.8% compared to the time frame in 2022.

During the trailing twelve months ended December 31, 2024, comparable tenant sales for spaces less than 10,000 square feet across the portfolio decreased by 0.4% relative to the twelve months ended December 31, 2023.

The leased occupancy rate of 94.1% at December 31, 2024 represented a 0.6% increase from 93.5% at December 31, 2023 and a 0.4% sequential increase compared to the 93.7% occupancy rate at September 30, 2024.

Releasing spreads increased as the Company executed leases at an average rent of $67.74 for new and renewal leases executed compared to $62.27 on leases expiring, resulting in a releasing spread increase of $5.47 per square foot, or 8.8%, for the trailing twelve months ended December 31, 2024.

This was the Company's thirteenth consecutive quarter of positive base rent leasing spreads.

The Company continues to renew or replace leases that are scheduled to expire in 2025, however, due to a variety of factors, the Company cannot be certain of its ability to sign, renew or replace leases expiring in 2025 or beyond.

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These calculations exclude Centers under development or redevelopment and property dispositions (See “Acquisitions,” "Dispositions" and "Redevelopment and Development Activities" in Management's Overview and Summary), and include square footage of Centers owned by joint ventures at the Company’s share.

2024 lease expirations continue to be an important focal point for the Company.

As of December 31, 2024, the Company has executed renewal leases or commitments on 47% of its square footage expiring in 2025, which leases are expected to commence throughout 2025 and 2026 and another 32% of such expiring space is in the letter of intent stage.

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The Company has entered into 91 leases for new stores totaling approximately 0.9 million square feet that have opened or are planned for opening in 2025, and another 13 leases for new stores totaling approximately 300,000 square feet opening after 2025.

In total, through 2028, new store leases are expected to produce total rent of approximately $66 million (at the Company's pro-rata share) in excess of the rent generated from prior uses in those same spaces.

While there may be additional new space openings in 2025, any such leases are not yet executed.

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The average tenant allowance was $17.02 per square foot.

On February 5, 2024, the Company announced that Jackson Hsieh will be appointed to the role of Chief Executive Officer (“CEO”) and President of the Company, effective as of March 1, 2024, following the retirement of Thomas E.

O’Hern, the Company’s current CEO, and Edward C.

Coppola, the Company’s current President, each of whom will be retiring effective as of February 29, 2024.

The Company has a long-term four-pronged business strategy that focuses on the acquisition, leasing and management, redevelopment and development of Regional Town Centers.

During 2023, the Company leased 4.2 million square feet, representing the strongest year of leasing volume based on square footage for the Company since its inception.

The Company’s portfolio also experienced one of the lowest volumes of tenant bankruptcies in the last decade.

As of December 31, 2023, the Company’s portfolio leased occupancy was 93.5%, which has increased 5.0% in the past eleven quarters since the pandemic-driven low of 88.5% as of March 31, 2021.

The Company continues to make progress addressing the near-term maturities of its non-recourse mortgage debt, as further described below.

Although the majority of the key performance indicators at the Centers continued to improve during 2023, operating results in 2024 could be negatively impacted by certain macro-economic factors, including any continued increase in inflation and elevated interest rates or an economic slowdown or recession.

Traffic levels at the Company’s Centers for 2023 were approximately 94% of 2022 levels.

During the second quarter of 2024, the Company unveiled the Path Forward Plan, which is a multi-pronged strategy to improve the Company’s balance sheet, while also making inward-facing enhancements to both bolster company culture and improve key business processes to gain operating efficiencies.

Essential goals of the Path Forward Plan include:

• Deleverage the capital structure, with a focus on reducing the Company’s Net Debt to Adjusted EBITDA leverage ratio over the next three to four years;

• Invest in and fortify the Company’s key assets in the portfolio;

• Proactively consolidate selected joint venture assets over time that are core to the Company’s overall strategy;

• Deliver a post-deleveraging Funds From Operations (“FFO”) launch point goal over the next three to four years;

• Achieve outstanding operational results through rigorous internal process improvements;

• Position the Company to take an offensive stance on acquisitions, reinvestment and selected development.

The Company may achieve these goals through a variety of methods and the timing, extent and impact of any transactions that the Company has or will undertake while implementing the Path Forward Plan may vary and evolve.

In order to deleverage its capital structure, the Company may pursue asset dispositions and acquisitions, experience organic growth in EBITDA as tenants in its lease pipeline open for business, be selective about undertaking new development and redevelopment projects, and/or issue common stock.

Asset sales will focus on whether a property is core to the Company’s strategy and may include defaulting on certain mortgage debts on the Company’s properties and giving possession of such secured properties to the lender.

Further, the Company has a long-term four-pronged business strategy that focuses on the acquisition, leasing and management, redevelopment and development of regional retail centers.

Although the majority of the key performance indicators at the Centers continued to improve during 2024, operating results have been and are expected to continue to be negatively impacted by certain external factors, including sustained inflation and elevated interest rates, as well as the impact from the 2024 bankruptcy of Express and any future tenant bankruptcies.

Traffic levels at the Company’s Centers for 2024 increased 1.6% over 2023 levels.

Comparable tenant sales from spaces less than 10,000 square feet across the portfolio for the trailing twelve months ended December 31, 2024 decreased by 0.4% compared to the same period in 2023.

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During 2024, the Company signed 880 new and renewal leases for approximately 3.7 million square feet, compared to 763 leases and 3.8 million square feet signed during 2023.

This leasing volume represented a 13% decrease in the number of leases and a 12% increase in the amount of square footage leased compared to the same period in 2022 on a comparable basis.

This leasing volume represented a 15.3% increase in the number of leases and a 3.9% decrease in the amount of square footage leased compared to the same period in 2023 on a comparable basis.

The Company believes that diversity of use within its tenant base has been, and will continue to be, a prominent internal growth catalyst at its Centers going forward, as new uses enhance the productivity and diversity of the tenant mix and have the potential to significantly increase customer traffic at the applicable Centers.

During the year ended December 31, 2023, the Company signed deals for new stores with new-to-Macerich portfolio uses for over 600,000 square feet, with another 140,000 square feet of such new-to-Macerich portfolio leases currently in negotiation as of the date of this Annual Report on Form 10-K.

During the year ended December 31, 2024, the Company signed leases for new stores with new-to-Macerich portfolio uses for over 225,000 square feet, with another 200,000 square feet of such new-to-Macerich portfolio leases currently in negotiation as of the date of this Annual Report on Form 10-K.

As of December 31, 2024, the leased occupancy rate increased to 94.1%, a 0.6% increase compared to the leased occupancy rate of 93.5% at December 31, 2023 and a 0.4% sequential increase compared to the leased occupancy rate of 93.7% at September 30, 2024.

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The Company does not anticipate that the negative impact of such clauses on lease revenue will be significant.

The pace of bankruptcy filings involving the Company’s tenants decreased substantially in 2023 and in 2022 compared to 2021.

For the year ended December 31, 2023, there were ten bankruptcy filings involving the Company’s tenants totaling fifteen leases and representing approximately 111,000 square feet of leased space and $3.6 million of annual leasing revenue at the Company’s share.

The pace of bankruptcy filings involving the Company’s tenants has remained steady in recent years but is substantially lower than 2021 levels.

For the year ended December 31, 2024, there were 13 bankruptcy filings involving the Company’s tenants, including the bankruptcy of Express announced on April 22, 2024, totaling 54 leases and representing approximately 369,000 square feet of leased space and $21.7 million of annual leasing revenue at the Company’s share.

Based on current information and market data, the Company expects that the pace of bankruptcy filings in 2025 will continue to be lower than the average bankruptcy rate over the last decade.

During 2024, the Company expects to generate positive cash flow from operations after recurring operating capital expenditures, leasing capital expenditures and payment of dividends.

This assumption does not include any potential capital generated from dispositions, refinancings or issuances of common equity.

This expected surplus will be used to fund the Company's development and redevelopment pipeline and to the extent available, de-lever the Company’s balance sheet.

The Company continues to make progress addressing its near-term, non-recourse loan maturities, with seven completed transactions since the beginning of 2023.

Since January 1, 2023, the Company has refinanced or extended seven loans totaling approximately $2.8 billion, or approximately $2.0 billion at the Company’s pro rata share.

This includes the September 2023 entry into an amended and restated credit agreement, which provided for an aggregate $650 million revolving loan facility, an increase from the prior $525 million credit agreement, that matures on February 1, 2027, with a one-year extension option.

For additional information on the Company’s financing transactions in the year 2023 through the date of this Annual Report on Form 10-K, see “Financing Activities” and "Liquidity and Capital Resources".

Elevated interest rates are increasing the cost of the Company’s borrowings due to its outstanding floating-rate debt and have led to higher interest rates on new fixed-rate debt.

The Company expects to incur increased interest expense from the refinancing or extension of loans that may currently carry below-market interest rates.

During 2025, the Company expects to generate positive cash flow after recurring operating capital expenditures, leasing capital expenditures and payment of dividends.

This assumption does not include any potential capital generated from dispositions, refinancings or issuances of common stock.

To the extent available, any excess cash flow may be used to fund the Company's development and redevelopment pipeline and/or to de-lever the Company’s balance sheet.

The Company continues to actively address its near-term, non-recourse loan maturities, with eight completed transactions since the beginning of 2024.

Since January 1, 2024, the Company has refinanced or extended eight loans totaling approximately $1.4 billion, or approximately $1.2 billion at the Company’s pro rata share.

For additional information on the Company’s financing transactions in 2024 through the date of this Annual Report on Form 10-K, see “Financing Activities” and "Liquidity and Capital Resources".

On April 9, 2024, the Company defaulted on the $300.0 million loan on Santa Monica Place and the Company is in negotiations with the lender on the terms of this non-recourse loan.

Elevated interest rates have increased, and may continue to increase, the cost of the Company’s borrowings due to its outstanding floating-rate debt and have led, and may continue to lead, to higher interest rates on new fixed-rate debt.

While interest rates have begun to decrease, they remain elevated and the Company expects to incur increased interest expense from the refinancing or extension of loans that may currently carry below-market interest rates.

In certain cases, the Company has limited, and may continue to limit, its exposure to interest rate fluctuations related to a portion of its floating-rate debt by using interest rate cap and swap agreements.

Such agreements, subject to current market conditions, allow the Company to replace

floating-rate debt with fixed-rate debt in order to achieve its desired ratio of floating-rate to fixed-rate debt.

Such agreements, subject to current market conditions, allow the Company to replace floating-rate debt with fixed-rate debt in order to achieve its desired ratio of floating-rate to fixed-rate debt.

However, any interest rate cap or swap agreements that the Company enters into may not be effective in reducing its exposure to interest rate changes.

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Leasing revenue increased by $41.4 million, or 5.1%, from 2023 to 2024.

The increase in leasing revenue is attributed to increases of $5.0 million from the Same Centers and $6.4 million from the JV Transition Centers offset in part by $2.9 million from the Disposition Properties.

The increase in leasing revenue is attributed to increases of $61.3 million from the JV Transition Centers offset in part by decreases of $7.1 million from the Disposition Properties and $12.3 million from the Redevelopment Properties.

Leasing revenue includes the amortization of above and below-market leases, the amortization of straight-line rents, lease termination income, percentage rent and the recovery of bad debts.

The amortization of above and below-market leases increased from $3.1 million in 2023 to $5.3 million in 2024.

The amortization of straight-line rents decreased from $(0.8) million in 2022 to $(4.6) million in 2023.

The amortization of straight-line rents increased from $(4.6) million in 2023 to $(0.8) million in 2024.

Lease termination income decreased from $10.5 million in 2023 to $2.9 million in 2024.

Percentage rent decreased from $38.2 million in 2023 to $34.3 million in 2024 primarily from conversions from variable rent to fixed rent structures on lease renewals of expiring space.

Recovery of bad debts increased from $0.7 million in 2022 to $2.7 million in 2023.

Other income increased from $30.1 million in 2022 to $44.9 million in 2023.

This increase is primarily due to parking, interest and other income related to the Same Centers.

Management Companies' revenue increased from $28.5 million in 2022 to $30.2 million in 2023 due to an increase in leasing and development fees.

(Provisions for) recovery of bad debts increased from $2.7 million in 2023 to $(6.2) million in 2024.

Other income decreased from $44.9 million in 2023 to $37.9 million in 2024.

This decrease is primarily due to a decrease in parking income related to the Same Centers and other non-recurring income in 2023 compared to 2024.

Shopping Center and Operating Expenses:

Shopping center and operating expenses decreased $1.5 million, or 0.5%, from 2022 to 2023.

The decrease in shopping center and operating expenses is attributed to a decrease of $4.5 million from the Same Centers offset in part by increases of $1.4 million from the Disposition Properties and $1.6 million from the JV Transition Centers.

The decrease at the Same Centers is primarily due to a decrease in real estate tax expense in 2023 compared to 2022.

Shopping center and operating expenses increased $18.5 million, or 6.4%, from 2023 to 2024.

The increase in shopping center and operating expenses is attributed to increases of $12.1 million from the JV Transition Centers and $8.3 million from the Same Centers, which is primarily due to increased insurance, maintenance, utilities and snow removal costs, offset in part by decreases of $2.0 million from the Disposition Properties and $1.6 million from the Redevelopment Properties.

Additionally, $1.7 million of the increase is attributable to Santa Monica Place.

Leasing Expenses:

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Management Companies' Operating Expenses:

Management Companies' operating expenses increased $2.3 million from 2022 to 2023 due to an increase in compensation expense.

Management Companies' operating expenses increased $12.0 million from 2023 to 2024 due to an increase in compensation expense, including employee severance costs of $5.5 million.

REIT General and Administrative Expenses:

REIT general and administrative expenses increased by $2.1 million due to an increase in compensation and consulting expense.

REIT general and administrative expenses decreased by $1.1 million due primarily to a decrease in compensation expense.

Depreciation and Amortization:

Depreciation and amortization decreased $9.3 million from 2022 to 2023.

The decrease in depreciation and amortization is attributed to decreases of $10.3 million from the Same Centers and $2.0 million from the Disposition Properties offset in part by an increase of $3.0 million from the JV Transition Centers.

Depreciation and amortization increased $12.4 million from 2023 to 2024.

The increase in depreciation and amortization is attributed to increases of $21.8 million from the JV Transition Centers and $1.0 million from the Redevelopment Centers offset in part by decreases of $7.6 million from the Same Centers and $6.1 million from the Disposition Properties.

Additionally, $3.3 million of the increase is attributable to Santa Monica Place.

Interest Expense:

Interest expense decreased $43.9 million from 2022 to 2023.

The decrease in interest expense is attributed to decreases of $58.9 million from the financing arrangement, $0.1 million from the Disposition Properties and $1.9 million from the JV Transition Centers offset in part by increases of $12.2 million from the Same Centers and $4.8 million from higher interest rates and outstanding balances on the Company's revolving line of credit.

Effective November 16, 2023, the Company acquired its partner's interest in Freehold Raceway Mall and, as a result, Freehold Raceway Mall is no longer part of the financing arrangement and is 100% owned by the Company.

The decrease in interest expense from the financing arrangement is primarily due to the change in fair value of the underlying properties and the mortgage notes payable on the underlying properties (See Note 12–Financing Arrangement in the Company's Notes to the Consolidated Financial Statements).

Interest expense increased $47.1 million from 2023 to 2024.

The increase in interest expense is attributed to increases of $31.3 million from the JV Transition Centers, $12.9 million from the financing arrangement (See Note 12—Financing Arrangement in the Company's Notes to the Consolidated Financial Statements), $2.5 million from the Same Centers and $0.4 million from higher interest rates and outstanding balances on the Company's revolving line of credit, offset in part by a decrease of $7.8 million from the Redevelopment Centers.

Additionally, $7.8 million of the increase is attributable to Santa Monica Place, which includes default interest expense of $8.9 million.

The decrease in interest income from the financing arrangement is primarily due to the change in fair value of the underlying properties and the mortgage notes payable on the underlying properties and Chandler Freehold no longer being accounted for as a financing arrangement (See Note 12—Financing Arrangement in the Company's Notes to the Consolidated Financial Statements).

The above interest expense items are net of capitalized interest, which increased from $20.5 million in 2023 to $22.6 million in 2024.

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Equity in loss of unconsolidated joint ventures increased $40.4 million from 2023 to 2024.

The increase in equity in loss of unconsolidated joint ventures is primarily due to the impairment losses in 2023 at Country Club Plaza of $101.0 million and the JV Transition Centers of $51.4 million, as a result of the reduction in the estimated holding periods (See Note 4–Investments in Unconsolidated Joint Ventures in the Company's Notes to the Consolidated Financial Statements).

(Loss) Gain on Sale or Write Down of Assets, net:

(Loss) gain on sale or write down of assets, net increased $142.2 million from 2022 to 2023.

The increase is primarily due to the impairment loss of $144.7 million at Fashion Outlets of Niagara Falls, as a result of the reduction in the estimated holding period of the property.

Net loss increased $213.0 million from 2022 to 2023.

The increase in net loss is primarily due to the impairment losses at Fashion Outlets of Niagara Falls, Country Club Plaza and the JV Transition Centers, along with the other variances noted above.

The increase in equity in loss of unconsolidated joint ventures is primarily due to the write-down of the Company's investment in Los Angeles Premium Outlets of $57.7 million in 2024 and impairment losses of $121.1 million recognized in 2024 as a result of the shortening of holding periods on certain joint venture assets as compared to impairment losses in 2023 of $51.4 million at MS Portfolio LLC and $107.7 million at Country Club Plaza, as a result of the reduction in the estimated holding periods (See Note 4—Investments in Unconsolidated Joint Ventures in the Company’s Notes to the Consolidated Financial Statements).

Gain (Loss) on Sale or Write Down of Assets, net:

Gain (loss) on sale or write down of assets, net increased $173.5 million from 2023 to 2024.

The increase is primarily due to the gains recognized in 2024 of $334.3 million relating to the Company no longer accounting for its investment in Chandler Fashion Center as a financing arrangement (See Note 12 – Financing Arrangement and Note 16 – Dispositions in the Company’s Notes to the Consolidated Financial Statements) and $42.8 million from the sale of the Company's ownership interest in Biltmore Fashion Park offset in part by impairment losses in 2024 of $334.3 million recognized as a result of the reduction in the estimated holding periods of certain properties, including Fashion District Philadelphia, The Oaks, Santa Monica Place and Wilton Mall, as compared to an impairment loss of $144.7 million recognized in 2023 as a result of the reduction in the estimated holding period of Fashion Outlets of Niagara Falls.

Net loss decreased $80.4 million from 2023 to 2024.

The decrease in net loss is primarily due to the gain on sale of assets discussed above offset in part by impairment losses recognized as a result of the reduction in the estimated holding periods of certain consolidated properties and properties held by unconsolidated joint ventures, including Fashion District Philadelphia, Santa Monica Place, Los Angeles Premium Outlets, The Oaks and Wilton Mall in 2024 and by the 2023 write-down of assets as a result of the reduction in the estimated holding period at MS Portfolio LLC and Country Club Plaza, along with the other variances noted above.

Funds From Operations ("FFO"):

Primarily as a result of the factors mentioned above, FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold, gain on extinguishment of debt and accrued default interest expense decreased 7.9% from $437.5 million in 2022 to $403.0 million in 2023.

For a reconciliation of net loss attributable to the Company, the most directly comparable GAAP financial measure, to FFO attributable to common stockholders and unit holders–diluted, and FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold, gain on extinguishment of debt and accrued default interest expense–diluted, see "Funds From Operations ("FFO")" below.

Primarily as a result of the factors mentioned above, FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold, gain or loss on extinguishment of debt, net, accrued default interest expense and loss on non-real estate investments decreased 11.6% from $413.2 million in 2023 to $365.3 million in 2024.

For a reconciliation of net (loss) income attributable to the Company, the most directly comparable GAAP financial measure, to FFO attributable to common stockholders and unit holders–basic and diluted, and FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold, (gain) loss on extinguishment of debt, net, accrued default interest expense and loss (gain) on non-real estate investments–diluted, see "Funds From Operations ("FFO")" below.

Cash Flows from Operating Activities:

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Cash Flows from Investing Activities:

Cash provided by investing activities increased $53.9 million from 2022 to 2023.

The increase in cash provided by investing activities is primarily attributed to an increase in distributions from unconsolidated joint ventures of $169.6 offset in part by decreases in proceeds from the sale of assets of $14.9 million, $21.0 million in proceeds from collection of receivable in connection with sale of joint venture property, increases in acquisitions of property of $22.1 million, development, redevelopment and renovation of $35.8 million and property improvements of $21.9 million.

The increase in distributions from unconsolidated joint ventures is primarily due to the distribution of net loan proceeds from the Scottsdale Fashion Square refinance (See " —Financing Activities" in Management's Overview and Summary) and the distribution of net sales proceeds on One Westside (See " —Dispositions" in Management's Overview and Summary).

Cash provided by investing activities decreased $32.8 million from 2023 to 2024.

The decrease in cash provided by investing activities is primarily attributed to a decrease in distributions from unconsolidated joint ventures of $206.9 million, increases in the acquisitions of property of $124.1 million and development, redevelopment and renovation of $31.4 million offset in part by increases in proceeds from the sale of assets of $246.6 million and $49.0 million in cash acquired from acquisitions of unconsolidated joint ventures, and decreases in contributions to unconsolidated joint ventures of $32.2 million and property improvements of $16.2 million.

The decrease in distributions from unconsolidated joint ventures is primarily due to the distribution of net loan proceeds from the Scottsdale Fashion Square refinance in 2023 (See “Financing Activities” in Management’s Overview and Summary).

Cash Flows from Financing Activities:

Cash used in financing activities increased $16.9 million from 2022 to 2023.

The increase in cash used in financing activities is primarily due to increases in payments on mortgages, bank and other notes payable of $457.2 million, deferred financing costs of $22.5 million and payment on finance arrangement obligation of $5.6 million offset in part by an increase in proceeds from mortgages, bank and other notes payable of $442.0 million and a decrease in dividends and distributions of $27.0 million.

The decrease in dividends and distributions is primarily due to a decrease in distributions to consolidated joint ventures offset in part by an increase in dividends to common stockholders.

Cash used in financing activities decreased $22.8 million from 2023 to 2024.

The decrease in cash used in financing activities is primarily due to increases in proceeds from stock offerings of $657.0 million and proceeds from mortgages, bank and other notes payable of $506.0 million and a decrease in deferred financing costs of $20.1 million offset in part by an increase in payments on mortgages, bank and other notes payable of $1.2 billion.

Comparison of Years Ended December 31, 2023 and 2022

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Liquidity and Capital Resources

The Company anticipates meeting its liquidity needs for its operating expenses, debt service and dividend requirements for the next twelve months and beyond through cash generated from operations, distributions from unconsolidated joint ventures, working capital reserves and/or borrowings under its line of credit.

Additionally, the Company is focused on implementing the Path Forward Plan, including its goal to reduce its Net Debt to Adjusted EBITDA leverage ratio to a lower level over the next three to four years.

The Company may achieve this goal, and other goals set in connection with the Path Forward Plan, through a variety of methods and the timing, extent and impact of any transactions that the Company has or will undertake while implementing the Path Forward Plan may vary and evolve.

Uses of Capital

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$ 80,799 $ 98,896 $ 108,628

The Company expects amounts to be incurred during the next twelve months for tenant allowances and deferred leasing charges to be comparable to 2023.

The Company expects to incur approximately $160 million to $180 million during 2024 for development, redevelopment, expansion and renovations.

Capital for these expenditures, developments and/or redevelopments has been, and is expected to continue to be, obtained from a combination of cash on hand, debt or equity financings, which are expected to include borrowings under the Company's line of credit, from property financings and construction loans, each to the extent available.

_______________________________________________________________________________

(1) For the twelve months ended December 31, 2024, this includes cash paid of $129.0 million, excluding the assumption of the partner's share of certain cash balances, on October 24, 2024, for the Company's acquisition of its joint venture partner's 40% interest in Lakewood Center, Los Cerritos Center and Washington Square.

The total purchase price also included the assumption of the partner's share of debt.

The Company now owns 100% of these regional retail centers.

In addition, for the twelve months ended December 31, 2024, this includes cash paid of $36.4 million on May 14, 2024, for the Company's acquisition of its joint venture partner's 40% interest in Arrowhead Towne Center and South Plains Mall.

The total purchase price also included the assumption of the partner's share of debt.

The Company now owns 100% of these regional retail centers.

For the twelve months ended December 31, 2023, this includes the Company's acquisition of its joint venture partner's (Seritage) 50% interest in five former Sears parcels on May 18, 2023, for $46.7 million.

The Company now owns 100% of these five parcels located at Chandler Fashion Center, Danbury Faire Mall, Freehold Raceway Mall, Los Cerritos Center and Washington Square.

The Company expects amounts to be incurred during the next twelve months for tenant allowances and deferred leasing charges to be approximately $50.0 million to $75.0 million.

The Company expects to incur approximately $250.0 million to $300.0 million during 2025 for development, redevelopment, expansion and renovations, which includes Scottsdale Fashion Square, Green Acres Mall and FlatIron Crossing (See "Redevelopment and Development Activities" in Management’s Overview and Summary).

Capital for these expenditures, developments and/or redevelopments has been, and is expected to continue to be, obtained from a combination of cash on hand, cash generated from operations, asset sales, debt or equity financings, which may include borrowings under the Company's revolving loan facility and sales of common stock, from property financings and construction loans, each to the extent available.

The Company will be very selective in undertaking any future development or redevelopment projects and may choose to pause existing projects if the Company believes they are no longer economically viable.

Sources of Capital

The Company has also generated liquidity in the past, and may continue to do so in the future, through equity offerings and issuances, property refinancings, joint venture transactions and the sale of non-core assets.

For example, the Company sold The Marketplace at Flagstaff in Flagstaff, Arizona on May 2, 2023, Superstition Springs Power Center in Mesa, Arizona on July 17, 2023, and the Company’s joint venture sold One Westside in Los Angeles, California on December 27, 2023.

The Company used its share of proceeds from these transactions to pay down its line of credit and other debt obligations.

Asset sales will focus on whether a property is core to the Company's strategy and may include defaulting on certain mortgage debts on the Company's properties and giving possession of such secured properties to the lender.

For example, since implementing the Path Forward Plan in the second quarter of 2024, the Company’s joint venture sold Country Club Plaza in Kansas City, Missouri on June 28, 2024 and the Company sold its 50% interest in Biltmore Fashion Park in Phoenix, Arizona on July 31, 2024.

Additionally, on November 25, 2024, the Company sold Southridge Mall in Des Moines, Iowa and on December 10, 2024, the Company sold The Oaks in Thousand Oaks, California.

The Company used its share of proceeds from these transactions to pay down its revolving loan facility and other debt obligations.

In addition, the Company is under contract to sell Wilton Mall, which is expected to close in the first half of 2025, subject to customary closing conditions.

During the year ended December 31, 2024, the Company and certain joint venture partners sold various land parcels in separate transactions for aggregate proceeds of $6.1 million (at the Company's share), which the Company used to pay down debt and for other general corporate purposes.

Furthermore, the Company has filed a shelf registration statement, which registered an unspecified amount of common stock, preferred stock, depositary shares, debt securities, warrants, rights, stock purchase contracts and units that may be sold from time to time by the Company.

On March 26, 2021, the Company registered an "at the market" offering program, 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 the ATM Program, in amounts and at times to be determined by the Company.

During both the twelve months ended December 31, 2022 and 2023, no shares were issued under the ATM Program.

On November 27, 2024, the Company completed a public offering of 23.0 million shares of its common stock at a price per share of $19.75, which includes the underwriters’ full exercise of their option to purchase an additional 3.0 million shares, for gross proceeds of approximately $454.3 million.

The net proceeds of the offering were approximately $439.5 million after deducting the underwriting discount and offering costs of approximately $14.8 million.

The Company used the proceeds from the offering, together with cash on hand, to repay the mortgage loan secured by its Washington Square property.

On each of March 26, 2021 and November 12, 2024, the Company registered separate “at the market” offering programs, pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $500.0 million under each of the 2021 ATM Program and the 2024 ATM Program, in each case, in amounts and at times to be determined by the Company.

The 2021 ATM Program was fully utilized as of September 30, 2024 and is no longer active.

During the twelve months ended December 31, 2023, no shares were issued under the ATM Programs.

During the twelve months ended December 31, 2024, 13.1 million shares of common stock were issued under the ATM Programs.

As of December 31, 2024, the Company had approximately $429.3 million of gross sales of its common stock available under the 2024 ATM Program.

The following table sets forth certain information with respect to issuances made under each of the ATM Programs as of December 31, 2024.

(Dollars and shares in thousands) 2021 ATM Program 2024 ATM Program

For the Three Months Ended:

Number of Shares Issued Net Proceeds Sales Commissions Number of Shares Issued Net Proceeds Sales Commissions

March 31, 2024 — $ — $ — — $ — $ —

June 30, 2024 — — — — — —

September 30, 2024 9,402 148,558 3,030 — — —

December 31, 2024 — — — 3,709 69,057 1,412

Total 9,402 $ 148,558 $ 3,030 3,709 $ 69,057 $ 1,412

The capital and credit markets can fluctuate and, at times, limit access to debt and equity financing for companies.

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For example, the credit markets have experienced and may continue to experience a slowdown stemming from broader market issues pertaining to various factors, including among others, the health of regional banks, prevailing market sentiment regarding various commercial real estate sectors and interest rate increases imposed by the Federal Reserve.

The Company expects to incur increased interest expense from the refinancing or extension of loans that may carry below-market interest

In addition, increases in the Company's proportion of floating rate debt will cause it to be subject to interest rate fluctuations in the future.

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The majority of the Company's debt consists of fixed-rate conventional mortgage notes collateralized by individual properties.

The Company expects that all of the maturities during the next twelve months will be refinanced, restructured, extended and/or paid off from the Company's line of credit or cash on hand (See “—Financing Activities” in Management’s Overview and Summary).

The Company expects that all of the maturities during the next twelve months will be refinanced, restructured, extended and/or paid off from the Company's revolving loan facility or cash on hand, with the exception of Santa Monica Place (See “—Financing Activities” in Management’s Overview and Summary).

The Company believes that the pro rata debt provides useful information to investors regarding its financial condition because it includes the Company’s share of debt from unconsolidated joint ventures and, for consolidated debt, excludes the Company’s partners’ share from consolidated joint ventures, in each case presented on the same basis.

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The Company does not believe that these letters of credit will result in a liability to the Company.

The Company continues to make progress addressing its near-term, non-recourse loan maturities, with seven completed transactions since the beginning of 2023.

Since January 1, 2023, the Company has refinanced or extended seven loans totaling approximately $2.8 billion, or approximately $2.0 billion at the Company’s pro rata share.

This includes the September 2023 entry into an amended and restated credit agreement, which provided for an aggregate $650 million revolving loan facility that matures on February 1, 2027, with a one-year extension option.

For additional information on the Company’s financing transactions in the year 2023 through the date of this Annual Report on Form 10-K, see “Financing Activities” in Management’s Overview and Summary.

Previously, the Company had a $525 million revolving loan facility, which was scheduled to mature on April 14, 2024.

On September 11, 2023, the Company and the Operating Partnership entered into an amended and restated credit agreement, which amends and restates their prior credit agreement, and provides for an aggregate $650 million revolving loan facility that matures on February 1, 2027, with a one-year extension option.

The Company continues to actively address its near-term, non-recourse loan maturities, with eight completed transactions since the beginning of 2024.

Since January 1, 2024, the Company has refinanced or extended eight loans totaling approximately $1.4 billion, or approximately $1.2 billion at the Company’s pro rata share.

For additional information on the Company’s financing transactions in 2024 through the date of this Annual Report on Form 10-K, see “Financing Activities” in Management’s Overview and Summary.

On September 11, 2023, the Company and the Operating Partnership entered into an amended and restated credit agreement, which amended and restated their prior credit agreement, and provides for an aggregate $650.0 million revolving loan facility that matures on February 1, 2027, with a one-year extension option.

The revolving loan facility can be expanded up to $950.0 million, subject to receipt of lender commitments and other conditions.

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(1) Interest payments on floating rate debt were based on rates in effect at December 31, 2024.

(2) On January 22, 2024, the Company repaid the majority of the mortgage loan on Fashion District Philadelphia.

The remaining $8.2 million matures on April 21, 2024.

(See “Financing Activity” in Management’s Overview and Summary).

(2) See Note 8—Leases in the Company's Notes to the Consolidated Financial Statements.

Funds From Operations ("FFO")

The Company uses FFO in addition to net income to report its operating and financial results and considers FFO and FFO -diluted as supplemental measures for the real estate industry and a supplement to GAAP measures.

The National Association of Real Estate Investment Trusts defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of properties, plus real estate related depreciation and amortization, impairment write-downs of real estate and write-downs of investments in an affiliate where the write-downs have been driven by a decrease in the value of real estate held by the affiliate and after adjustments for unconsolidated joint ventures.

The Company uses FFO in addition to net (loss) income to report its operating and financial results and considers FFO and FFO — diluted as supplemental measures for the real estate industry and a supplement to GAAP measures.

The National Association of Real Estate Investment Trusts defines FFO as net (loss) income (computed in accordance with GAAP), excluding gains (or losses) from sales of properties, plus real estate related depreciation and amortization, impairment write-downs of real estate and write-downs of investments in an affiliate where the write-downs have been driven by a decrease in the value of real estate held by the affiliate and after adjustments for unconsolidated joint ventures.

Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis.

The Company accounts for its joint venture in Chandler Freehold as a financing arrangement.

In connection with this treatment, the Company recognizes financing expense on (i) the changes in fair value of the financing arrangement obligation, (ii) any payments to the joint venture partner equal to their pro rata share of net income and (iii) any payments to the joint venture partner less than or in excess of their pro rata share of net income.

Prior to June 13, 2024, the Company accounted for its joint venture in Chandler Freehold as a financing arrangement.

In connection with this treatment, the Company recognized financing expense on (i) the changes in fair value of the financing arrangement obligation, (ii) any payments to the joint venture partner equal to their pro rata share of net income and (iii) any payments to the joint venture partner less than or in excess of their pro rata share of net income.

The Company excludes from its definition of FFO the noted expenses related to the changes in fair value and for the payments to the joint venture partner less than or in excess of their pro rata share of net income.

On November 16, 2023, the Company acquired its joint venture partner’s 49.9% ownership interest in Freehold Raceway Mall and as a result, this property is no longer part of the financing arrangement and is 100% owned by the Company.

(See Note 12 – Financing Arrangement and Note 15 – Acquisitions in the Notes to the Consolidated Financial Statements).

References to Chandler Freehold after November 16, 2023 shall be deemed to only refer to Chandler Fashion Center.

The Company also presents FFO excluding financing expense in connection with Chandler Freehold, (gain) loss on extinguishment of debt and accrued default interest expense.

On June 13, 2024, the partnership agreement between the Company and its partner was amended.

As a result, the Company no longer accounts for its investment in Chandler Fashion Center as a financing arrangement.

Effective June 13, 2024, the Company accounts for its investment in Chandler Fashion Center under the equity method of accounting (See Note 12 – Financing Arrangement and Note 16 – Dispositions in the Notes to the Consolidated Financial Statements).

References to Chandler Freehold for the period November 16, 2023 through June 13, 2024 shall be deemed to only refer to Chandler Fashion Center.

The Company also presents FFO excluding financing expense in connection with Chandler Freehold, gain or loss on extinguishment of debt, accrued default interest expense and gain or loss on non-real estate investments.

FFO and FFO on a diluted basis are useful to investors in comparing operating and financial results between periods.

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The Company believes that such a presentation also provides investors with a more meaningful measure of its operating results in comparison to the operating results of other REITs.

In addition, the Company believes that FFO excluding financing expense in connection with Chandler Freehold, and impact associated with extinguishment of debt and accrued default interest expense provides useful supplemental information regarding the Company’s performance as it shows a more meaningful and consistent comparison of the Company’s operating performance and allows investors to more easily compare the Company’s results.

The default interest expense reflects the interest accruing on the nonrecourse loans associated with Fashion Outlets of Niagara Falls and Country Club Plaza.

GAAP requires that the Company accrue these amounts, which are not expected to be paid and are expected to be reversed once a loan is modified or once title to the mortgage loan collateral is transferred.

The Company believes that FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income (loss) as defined by GAAP, and is not indicative of cash available to fund all cash

In addition, the Company believes that FFO excluding financing expense in connection with Chandler Freehold, impact associated with extinguishment of debt, accrued default interest expense and impact of non-cash changes in the market value of non-real estate investments provides useful supplemental information regarding the Company’s performance as it shows a more meaningful and consistent comparison of the Company’s operating performance and allows investors to more easily compare the Company’s results.

On March 19, 2024, the Company closed on a three-year extension of the Fashion Outlets of Niagara Falls non-recourse loan and all default interest expense was reversed.

Effective April 9, 2024, default interest expense has been accrued on the non-recourse loan on Santa Monica Place.

GAAP requires that the Company accrue default interest expense, which is not expected to be paid and is expected to be reversed once a loan is modified or once title to the mortgaged loan collateral is transferred.

The Company believes that the accrual of default interest on non-recourse loans, and the related reversal thereof should be excluded.

The Company holds certain non-real estate investments that are subject to mark to market changes every quarter.

These investments are not core to the Company's business, and the changes to market value and the related gain or loss are entirely non-cash in nature.

As a result, the Company believes that the gain or loss on non-real estate investments should be excluded.

In the first quarter of 2024, the Company updated its presentation to exclude gain or loss on non-real estate investments for the reasons noted above.

The Company recast the presentation for prior periods to reflect this change.

The Company believes that FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net (loss) income as defined by GAAP, and is not indicative of cash available to fund all cash flow needs.

The Company also cautions that FFO, as presented, may not be comparable to similarly titled measures reported by other real estate investment trusts.

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Management believes that to further understand the Company's performance, FFO should be compared with the Company's reported net (loss) income and considered in addition to cash flows in accordance with GAAP, as presented in the Company's consolidated financial statements.

The following reconciles net (loss) income attributable to the Company to FFO and FFO—diluted attributable to common stockholders and unit holders—basic and diluted, excluding financing expense in connection with Chandler Freehold, (gain) loss on extinguishment of debt, net and accrued default interest expense for the years ended December 31, 2023, 2022, 2021, 2020 and 2019 (dollars and shares in thousands):

The following reconciles net (loss) income attributable to the Company to FFO attributable to common stockholders and unit holders—basic and diluted and FFO attributable to common stockholders and unit holders—basic and diluted, excluding financing expense in connection with Chandler Freehold, (gain) loss on extinguishment of debt, net, accrued default interest expense and loss (gain) on non-real estate investments for the years ended December 31, 2024, 2023, 2022, 2021 and 2020 (dollars and shares in thousands):

2024 2023 2022 2021 2020

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Noncontrolling interests in the Operating Partnership (8,766) (11,389) (2,660) 714 (16,822)

Loss (gain) on sale or write down of consolidated assets, net 134,523 (7,698) (75,740) 68,112 11,909

(Gain) loss on sale or write down of consolidated assets, net (38,959) 134,523 (7,698) (75,740) 68,112

Loss on remeasurement of consolidated assets — — — — 163,298

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Accrued default interest expense 7,856 6,417 — — —

FFO attributable to common stockholders and unit holders excluding financing expense in connection with Chandler Freehold, (gain) loss on extinguishment of debt, net and accrued default interest expense—diluted $ 403,010 $ 437,534 $ 423,197 $ 339,505 $ 537,312

Loss (gain) on non-real estate investments 11,027 10,203 9,560 (20,158) 3,962

FFO attributable to common stockholders and unit holders excluding financing expense in connection with Chandler Freehold, (gain) loss on extinguishment of debt, net, accrued default interest expense and loss (gain) on non-real estate investments—diluted $ 365,335 $ 413,213 $ 447,094 $ 403,039 $ 343,467

Weighted average number of FFO shares outstanding for:

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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 7. Management’s Discussion and Analysis