Please note, this event is being recorded. I would now like to turn the conference over to Alexandra Johnstone, Vice President of Finance and Investor Relations. Please go ahead.
Thank you for joining us on our third quarter 2026 earnings call. During this call, we will make certain statements that may be deemed forward-looking within the meaning of the Safe Harbor of the Private Securities Litigation Reform Act of 1995, including statements regarding projections, plans, or future expectations. Actual results may differ materially due to a variety of risks and uncertainties set forth in today's earnings results and supplemental and our SEC filings. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the supplemental filed on Form 8-K with the SEC, which is posted in the Investor section of the company's website at macerich.com. Joining us today are Jack Hsieh, President and Chief Executive Officer, Dan Swanstrom, Senior Executive Vice President and Chief Financial Officer, and Doug Healey, Senior Executive Vice President of Leasing.
With us in the room is Brad Miller, Senior Vice President of Portfolio Management. With that, I would like to turn the call over to Jack.
Thanks, AJ, and good afternoon, everyone. We continue to see the positive impact of new store openings this quarter. With 500 new stores opened since the Path Forward Plan was implemented, we're excited as the next 500 new stores open within our Go-Forward Portfolio through 2028. The leasing initiative is largely secured, and the results are now beginning to meaningfully show up in foot traffic, sales, and NOI. For the third quarter, FFO as adjusted was $0.37 per diluted share, and Go-Forward Portfolio NOI grew 4.7%. We expect Go-Forward NOI growth to exhibit meaningful acceleration in 2027 and 2028 as our portfolio of signed, not open tenants open and begin paying rent. Portfolio sales reached a new company high of $972 across the Go-Forward Portfolio. Here's where we stand on the Path Forward Plan.
Our leasing speedometer, which tracks new deal completion in the five-year plan, is at 91%. Of the roughly 1,000 new deals in the five-year plan, 906 are executed or approved, 85 are in LOI, and the remaining nine are in the prospecting phase. Our SNO pipeline reached $131 million of the $140 million total opportunity, up from $124 million last quarter. Go-Forward leased occupancy is 96.1%, up 60 basis points from the second quarter. All 30 of our targeted anchor replacements are committed, with eight open, 12 under construction, seven executed, and three in lease-out. Our store openings completion percentage, an operational metric intended to provide transparency on our progress to move tenants from LOI through store opening, is at 62%, up from 57% on our second quarter call and ahead of our 60% year-end target.
We are very excited about the performance of our three recent DICK'S House of Sport anchor store openings and the positive impact they have had on our shopping centers and inline leasing. The new stores are driving incremental foot traffic to the centers, sales for adjacent inline tenants, and improving overall vibrancy for the shopping centers. We are all in on the 10 House of Sport stores, which will impact a third of our shopping centers and open through 2028. At Freehold Raceway Mall, House of Sport replaced a former vacant Lord & Taylor department store at the end of October last year and closed its smaller sporting goods store on the mall's ring road. In the 12 months since, the store has had about 1 million visits, and foot traffic inside the mall increased by 700,000, a 9% center-wide increase in annual foot traffic.
At Annapolis Mall, House of Sport opened on August 14th. Mall traffic was up 35% over opening weekend and 20% over the first month, about 119,000 more visits than the same days last year. We are also negotiating a lease for a new retail department store operator to take the vacant Sears box, which addresses all of the vacant anchor stores. At Crabtree Valley Mall, House of Sport had its grand opening on October 9th, and mall traffic was up 11% over opening weekend. Crabtree already draws more than 8 million visits a year, so that's a strong start. Since we acquired Crabtree, 22 new tenants have opened, and we are investing in the property itself with common area, lighting, and parking garage improvements underway through 2027. We are seeing the same effect beyond DICK's.
At Tysons Corner, Level99 opened August 2025, and traffic in the two entrances by the store are up 11% since opening. At Chandler, Seafood City opened this summer, and traffic at that center is up 20% since opening. These openings matter beyond the anchor space, as they are a catalyst to drive incremental foot traffic that results in more sales for the inline tenants around the anchor, and that is what gives us demand tension for the next round of leases in that wing. Foot traffic within our Go-Forward Portfolio improved in the third quarter, driven by strong back-to-school performance. September was the second strongest month of the year at 3.3%, slightly behind August's 3.6%. We are operating with urgency, alignment, and accountability in executing on our 2028 objectives. Importantly, we are not reliant on a single growth lever.
We are executing across multiple growth engines, leasing, redevelopment, and repositioning, and selective external growth through acquisitions. In terms of acquisitions, one or two deals like Crabtree or Annapolis can really move the needle for us. We are under contract on our next off-market mall acquisition, which is subject to customary closing conditions and expect to close by year-end. We plan to fund the acquisition with all equity, using a portion of our unsettled forward equity of $372 million. The transaction is expected to be within our targeted stabilized yield range of 9%-11%, be accretive to 2028 FFO per share, and deleverage our balance sheet by over 20 basis points. Until we close the transaction, we will not have any additional commentary at this time. Our acquisition pipeline continues to be robust, with roughly half on-market and half off-market opportunities. Our investment criteria has not changed.
We are focused on acquisitions that are, one, accretive to our plan, two, located within strong trade areas with a clear catalyst to elevate and transform the assets, and three, keeping us within our leverage targets. We will continue to be very disciplined and selective and quick to close when we need to. To summarize, I am quite pleased with our execution against the plan. We are ahead of schedule, the plan is de-risked, and the structural tailwinds behind malls are only getting stronger. I have more conviction in this business today than at any point since I joined Macerich. With that, I will turn the call over to Doug.
Thanks, Jack. Like the first and second quarters, the third quarter reflected continued leasing momentum across our portfolio. Portfolio sales at the end of the third quarter were $943 per square foot, once again representing a new high watermark for the company, and that is our full portfolio. When you look at our Go-Forward Portfolio, the centers in which we are actively investing, sales were actually $972 per square foot, up $18 from the second quarter. As I mentioned last quarter, this continues to highlight the success of our transformation and elevation strategy. Occupancy at the end of the third quarter was 94.9%, up 90 basis points from the second quarter. The Go-Forward Portfolio occupancy at the end of the third quarter was 96.1%.
That is up 60 basis points sequentially and up 180 basis points year-after-year, continuing to reflect strong demand for space in our best centers. Looking at our lease expirations, as I mentioned last quarter, we are effectively done with 2026 and well into 2027. In fact, as we look at our 2027 expirations, we are just about 70% committed with another 20% in the letter of intent stage. Compared to this time last year, we remain ahead of pace, and given this velocity, we have significantly de-risked the renewal portion of our five-year plan. Turning to tenant openings, in the third quarter, we delivered 85 new stores throughout the portfolio, totaling just over 600,000 sq ft, most notably a new DICK'S House of Sport at both Crabtree Valley Mall and Annapolis Mall that you heard Jack talk about earlier.
This brings our year-to-date new store opening to 1.2 million square feet, which is 30% more square footage than we opened during the same period last year. In the third quarter, we signed 1.2 million square feet of new and renewal leases, of which 660,000 sq ft were new deals. This brings our year-to-date total to 2 million square feet of signed new leases, which is 30% more square footage than we signed during the same period last year. We're very excited to announce the signing of DICK'S House of Sport at FlatIron Crossing. DICK'S will be relocating from their current position at FlatIron and building a new House of Sport store in the former Nordstrom box, totaling 165,000 sq ft. This store is scheduled to open fall 2027 and represents the ninth lease we've signed with DICK'S House of Sport, with another in the works.
DICK'S House of Sport at FlatIron continues to exemplify the outstanding leasing momentum since we've announced and began construction on HiFi, the mixed-use development right outside FlatIron's front door that will include residential, retail, and heavy food and beverage. Other interior mall leasing momentum generated from this development includes signed leases with Abercrombie & Fitch, OFFLINE by Aerie, LEGO, Levi's, Garage, Starbucks, Warby Parker, Urban Outfitters, and Fabletics, just to name a few. In the third quarter, we also signed a 40,000-square-foot Zara lease at Chandler Fashion Center. While we have several Zara stores in our portfolio, this is our second true Zara mall flagship store, in addition to Tysons Corner Center, which opened just last quarter.
Examples of other new leases signed in the third quarter throughout our portfolio span several categories: anchor stores like Burlington and Ross, legacy brands like Victoria's Secret, North Face, Urban Outfitters, and Levi's, food and beverage concepts such as Kura Sushi and Joe & The Juice, international brands like Kiyoji and Pop Mart, experiential concepts like Crunch Fitness, Sky Zone, and LoopyLand, and emerging brands like Fabletics, LO& and Lovesac. As you can see, retail demand for space remained healthy throughout the quarter, and conversations with our retail partners continue to reflect a clear focus on quality. Brands continue to prioritize high-productivity malls where they can drive traffic, maximize sales, and create brand awareness. Clearly, our portfolio is benefiting from this flight to quality. What really stands out is the breadth and quality of this demand. Retailers aren't simply opening stores.
They're making bigger, longer-term commitments, upsizing, relocating to better locations, and building flagship formats. This is a clear vote of confidence in the productivity of the physical store and in our centers specifically. On the consumer side, we continue to see shoppers who are engaged, motivated, and willing to spend. They're coming to our centers for experiences, whether to enjoy a great meal, an entertainment outing, or the latest from a brand they love, and they're spending when the offering is compelling. This resilience is showing up in all categories throughout our portfolio and sets the stage for a strong holiday season. In fact, the National Retail Federation and other credible sources share the same sentiment. The NRF is forecasting holiday sales this year will grow 4.2% to $1 trillion for the first time ever, the fastest pace since 2021.
So in conclusion, we had another solid quarter and look forward to a prosperous holiday season with great faith in our space, our portfolio, our retailers, and our consumers. With that, I will turn the call over to Dan to go through our third-quarter financial results.
Thanks, Doug, and good afternoon. I will start with a review of the third-quarter financial results. FFO as adjusted was approximately $109 million, or $0.37 per share, during the third quarter of 2026. Go-Forward Portfolio centers NOI, excluding lease termination income, increased 4.7% in the third quarter of 2026 compared to the third quarter of 2025. With a strong third quarter of NOI growth, Go-Forward Portfolio centers NOI has increased 3.3% for the nine-month period ended September 30, 2026, as compared to the same period in 2025. We are tracking ahead of our initial expectations for the full year 2026 to be up at least 3% over 2025. We continue to expect NOI growth to accelerate meaningfully in 2027 and 2028 as the SNO pipeline tenants continue to open and begin paying rent. We have a high level of confidence in achieving the total SNO opportunity of approximately $140 million.
The estimated annual contribution is $30 million in 2026, $40 million-$45 million in 2027, and $45 million-$50 million in 2028. This represents a clear, visible path to drive incremental growth. Turning to the balance sheet, we are making strong progress on the balance sheet initiatives contained in our Path Forward Plan. 2026 continues to be an incredibly productive year by the team in relation to our various financing activities. With respect to our capital markets activity, in August, we closed an upsized offering of $775 million of 2.25% exchangeable senior notes due 2031. The initial exchange price represented an approximately 20% premium. However, in connection with the pricing of the notes, we entered into a capped call transaction, which includes a cap price of approximately $34.06 per share, representing a premium of approximately 45%.
In September, we used a portion of the net proceeds of approximately $710 million from this transaction to repay the $370 million secured mortgage loan on Green Acres Mall that had an effective interest rate of approximately 6.6% and a January 2028 maturity date. Related to this transaction, we recognized a GAAP loss on extinguishment of debt of $10 million that is added back to our FFO as adjusted. We plan to utilize the remaining net proceeds to further pay down additional secured debt on our balance sheet. Stepping back, we are pleased to complete the convertible notes offering, which from a strategic perspective was a natural next step in our transition toward a more flexible, unsecured capital structure, with the net proceeds primarily used to pay down existing secured mortgage debt.
It also allows us to proactively address future debt maturities, capture interest expense savings, and better position the company to pursue an investment-grade credit rating down the road, and ultimately obtain access to the unsecured bond market. We recently closed on a new $550 million acquisition revolving credit facility. The facility is primarily available to finance acquisitions. It is currently undrawn. It has a three-year term with a one-year extension option and pricing of SOFR plus 200 basis points. The facility provides the flexibility to keep future draws fully funded and outstanding for a longer period, or to repay and redraw as we deem appropriate. Ultimately, we are pleased to have lined up committed debt capital with attractive terms in advance of future acquisitions. We greatly appreciate our bank group's support of Macerich and its Path Forward Plan.
The Macerich balance sheet and liquidity profile are materially stronger than at the outset of the Path Forward Plan just over two years ago. We currently have approximately $2.2 billion in liquidity, including $900 million of capacity on our revolving line of credit, $260 million of initial availability on our new acquisition revolving credit facility, and $372 million of unsettled forward equity proceeds. We intend to use the unsettled forward equity to fund acquisitions. Together, we have significant equity and committed debt capital in place and available to fund accretive external growth. From a leverage perspective, net debt to adjusted EBITDA at the end of the third quarter was 7.3x, which is over a 1.5 turns lower than at the outset of the Path Forward Plan. Inclusive of the unsettled forward equity proceeds, net debt to adjusted EBITDA is below 7x.
Importantly, we have outlined our strategy to further reduce leverage to the 6x plus or minus range. We continue to proactively address our debt maturities through a combination of potential asset sales, refinancings, loan modifications, or if necessary, property givebacks. With respect to our Twenty Ninth Street property, this $76 million loan at the company's pro rata share remains in default after its February maturity date. Effective October 6th, the $74 million loan at Fashion Outlets of Niagara Falls is in default. Effective November 2nd, the $325 million loan at Fresno Fashion Fair is in default. As we are currently in discussions with the lenders on the terms of these loans, we do not have any additional commentary at this time. We are executing on the dispositions we have outlined in our Path Forward plan.
During the third quarter, we closed on the sale of Pacific View for approximately $70 million, which had a loan on the property for approximately $70 million and a May 2032 maturity date. We also completed land sales totaling about $4 million. We have now closed on approximately $110 million in sales year to date, have approximately $30 million under contract, and have approximately $150 million of debt in default on properties not included in the Go-Forward Portfolio. We remain on track to achieve our 2026 objective to sell or give back $300 million-$400 million of assets, outparcels, and land. These sales transactions are consistent with our stated disposition plan to improve the balance sheet and refine our portfolio. We will continue to provide further updates on our disposition activities.
Overall, we are making great progress on our Path Forward Plan objectives to reduce leverage, refine the portfolio, and strengthen the balance sheet. With that, we will turn the call over to the operator.
Thank you. We will now begin the question- and- answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up the handset before pressing the keys. To withdraw your question, please press star then two. A reminder that we do ask that participants limit themselves to asking one question, and to ask further questions to please rejoin the queue. Your first question comes from Todd Thomas from KeyBanc Capital Markets. Please go ahead.
Yeah. Hi. Thanks. First question here, appreciate the commentary on the acquisition that is under contract. You indicated it will be accretive in 2028. Any commentary on 2027? Just curious whether that timing reflects the profile of the opportunity we are getting to the 9%-11% yield requires some combination of upfront capital, leasing, or time to stabilize. Then, just stepping back more broadly, has the profile of what you are underwriting changed at all in terms of acquisitions? Are you still seeing opportunities in that 9%-11% stabilized yield range on opportunities that you are underwriting, or have better mall fundamentals and the volatility in the financing environment either changed pricing or the returns that you are requiring going forward?
Thanks, Todd. Oh, shit, that was a lot of questions. Yeah, on the mall that we said we would not talk about, yeah, it will be accretive to 2027 and 2028, as we said. In terms of what we are looking for, if you just look at it, we have had more success in pursuing off-market transactions. I can just tell you, recently, our experience in fully marketed deals has not been as good. We have not won those opportunities, which sort of suggests that pricing remains pretty strong for enclosed super-regional malls that fit the profile that we are focused on. Right now, as I said in the past, we are targeting malls that fit in that A- to B+ range that we think we can really elevate. And we still think we can find them within that stabilized yield area, in the 9%-11% area.
But there is capital, there's a lot of interest in the sector. Interestingly enough, even with this recent increase in long-term interest rates, since the last several months, we haven't really seen it impact the things that we're pursuing at this point, from a price point.
Thank you. Your next question comes from Michael Griffin from Evercore ISI. Please go ahead.
Great, thanks. I was wondering if you could expand a little bit more on the leasing environment. Most notably, the new leasing in the quarter seemed to jump pretty notably, up about 17% year- over- year. Is this just a comp issue, or are newer tenants more interested in leasing space given the work that you've been able to do with a lot of these anchor tenants, giving them more confidence in the durability there? I guess any color there on the new leasing side of things would be very helpful. Thank you.
Sure. I'll take it first, and then Doug, I'm sure I'll let him have a comment after I finish. Just to remind everybody about this plan, at year-end 2024, our leasing speedometer was about 39%. What that meant was we had 525 prospecting opportunities that we were pursuing. If you look at it today, fast-forward, we're at 91% on the speedometer. We only have nine left in prospecting. Everything else is spoken for. So you could say, yeah, there's a lot of demand from tenants, but the team is not just leasing whoever shows up. I mean, there's merchandising strategies, plans. If you do one type of tenant that is of high quality, you bring a Dior, you're going to be able to make that next level jump. Maybe you get the Aritzia next. So there's a strategy that the team pursues.
It's not just lease whoever will pay the highest rent at any given time. There's generally plans on each of these. I think the most important point I'd mention, we said we have 500 more that are going to open. We only have eight anchors open. I went through painstaking detail to share some of that traffic information when we first started. We got another 22 more coming, and it's going to be amazing as it impacts the rest of these portfolios, the rest of the assets. Look, the leasing teams have the ability to talk to tenants about those plans, and so they know how this will affect them. So, I think the exciting part about what we're doing right now is, this is really, in my opinion, proof of concept that this plan is working now.
Sales is going up, traffic is going up, occupancy is going up, and now you're seeing NOI, and it's only going to accelerate. Doug, you might want to just share, because your teams are all over this and doing a great job, just how that discussion and pacing, how you manage pace versus patience on attacking the right merchandise.
Yeah, Jack, I think you were spot on. The only thing I would add is, look, we have a very healthy retailer environment, and we know it, our peers know it. We talk about the leases that we've signed, 30% more than this period last year. We talk about the tenants that we opened, 30% more than this period last year. Again, that's all great, and as I said in the past, that's sort of in the rearview mirror. What I like to look at are the deals that we approve in our executive leasing committee every two weeks, because for me, that's much more forward-looking. I can tell you to date, we're just about on par with where we were last year in terms of approving new deals. You got to keep in mind, last year was a record leasing year for us.
Last thing I would say is, as I've said before, the depth and breadth of retailers looking to be in our centers is unprecedented. We've talked about food and beverage, we've talked about entertainment, we've talked about emerging brands, we talked about Gen Zs. What I don't think we've really talked about enough are the legacy retailers, the real meat and potatoes of our portfolio, and they are just doing a fantastic job. They're reinventing themselves, they're investing in stores, they're modernizing, they're forming collaboration. So they really regained relevance, regained interest, which is fueling their growth. Just a few examples of what these guys are doing. The Gap is investing in remodels. They're introducing accessories and fragrances. A&F is introducing wedding dresses. Hollister is doing a collaboration with Target on home and dorm wear. Old Navy's rolling out beauties.
The list goes on, but my point is, these guys are really reinventing themselves, making themselves relevant again, given the impact they have on our portfolio, I think it is something that we need to talk about a little bit more.
Thank you. Your next question comes from Vince Tibone from Green Street Advisors. Please go ahead.
Hi, good afternoon. It sounds like most of the unsettled forward equity is going to be earmarked for the acquisition under contract, but how should we think about the most likely use for the $600 million, give or take, of cash that is currently on hand? Are you hoping to employ most or all of that into acquisitions, or could this potentially be used to grow the unencumbered pool and delever, like Los Cerritos, for example? Could you look to just unencumber that property? Just curious how you are thinking about kind of the current cash load and how you are planning to deploy that over the near term.
Hey, Vince. I will try to start it, and I will let Dan, if I miss something. So remember, the net proceeds that we have on the convert are about $340 million. So we are going to pay off an existing mortgage on that, but we are using those proceeds. As we said, the forward 372, a good portion of that is going towards this next acquisition opportunity that we have under contract. The $630 million of cash, I mean, we still have development commitments, we have got CapEx, TI, so we are going to be very careful with the use of that cash. Do not think it is going to be used for any acquisitions at this point. Dan, I do not know if I got that right, if you want to follow up on it.
Yeah, Jack, I think you are spot on. Just to put a fine point on that, Vince, on the $630 million of cash, to Jack's point about $340 million, $350 million of that is the excess from the convertible proceeds. So that is earmarked to pay down secured debt and to continue transition from secured to unsecured for those proceeds. Then to Jack's point, the balance of that $630 million is primarily earmarked for the rest of our funding for major developments, other redevelopments, anchors, and then lastly, as Jack noted, the $372 million of unsettled forward equity is earmarked for acquisitions.
Thank you. Your next question comes from Craig Mailman from Citigroup. Please go ahead.
Hey, good evening, everyone. I guess, Jack, you talked a lot about the Path Forward Plan, and you guys are majority of the way through that. I guess as we think about sort of the next leg of the evolution or however you guys are going to frame it, right, as you open up some of these DICK'S House of Sport and some other, and a lot of the anchor boxes that are just going to drive demand. I mean, as you guys are sitting through executive committee and looking at the value of your assets, I mean, how much more value do you unlock in phase two here from harvesting sort of better rents on some of these spaces that are next to like a DICK'S House of Sport, where you are seeing these significant increases in foot traffic?
I guess I am just trying to figure out what the timeframe on that next leg, how we should think about that value creation and earnings growth and same store coming from that piece going forward.
Yeah, thanks, Craig. I do not know if you remember last quarter, I was giving you some information on those later stage transformation kinds of properties like Kierland Commons, Broadway Plaza, Scottsdale Fashion, and Tysons Corner. Those are more mature and along the way in terms of store openings. Look, we were at Tysons last week, and there are still new stores opening there, and they are getting better, and they are continuing to upgrade. So, what I would say is, it is this compounding effect that we are experiencing. As better tenants are coming in with better stores, as Doug said, bigger stores, more traffic, more footfall, more vitality, there is just more demand for tenants to get bigger. What that means is, you are going to push someone out, you are going to push someone in. It is like a Rubik's Cube, right? So we have largely secured just call it 25% of our floor plan.
Of all available space, Path Forward deals with 25% new. As we are going through this next level of renewals and those decisions, so I am talking about 2029, 2030, we know that those 22 anchors that are on the way will be open. So we are already talking with tenants about that space, because we cannot deliver on some of the demand we have right now. The space too big, the tenant wants to be here at this part of the center, cannot deliver it. So the next opportunity to really drive rent and drive the same store NOI is going to be taking that next level when there is 2029, 2030, 2031. The teams are working on that right now, which is amazing because we did not have the ability to really do that as precisely as we can right now.
Thank you. Your next question comes from Samir Khanal from Bank of America. Please go ahead.
Good afternoon, everybody. I guess, Jack, given the higher rate environment that we have, I guess, how comfortable are you with the financing assumptions underlying your 2028 targets? I guess, how much sensitivity is there to those targets if borrowing costs remain elevated? Thanks.
Yeah. Thanks, Samir. Dan, you can follow up, but we had 6% as a base rate in our assumption in the model. Today looked a little better than yesterday, if you look at the 10-year. I would say, if rates were to go up, continue to increase, we would start to be eating into that 6% assumption. I guess the way I think about it is, going back to our $1.90, 6x debt-to-EBITDA target at the midpoint, as we talked about for 2028 in our June release, that didn't assume any acquisitions. That didn't assume any pickup in using the convert proceeds to pay down higher cost coupons. Obviously, that would suggest to you we have some cushion as it relates to increases in interest rates, slower RCDs, or changes in disposition assumptions.
Not suggesting there are any, but I feel pretty good that we've got real cushion, which is nice to have right now, as we think about the remaining things that we have to do. Dan, I don't know if you want to take on any more as it relates to, he specifically talked about 2028, Samir.
No, Jack, I think you summarized it well.
Okay.
Thank you. Your next question comes from Greg McGinniss from Scotiabank. Please go ahead.
Hi, thank you. I just wanted to dig in on a couple balance sheet considerations. Firstly, is the goal to be fully secured long-term? With regards to Niagara, can you hand that asset back because it is not part of the Go-Forward Portfolio, or does it end up in a similar situation as Santa Monica Place? If there is any update there, that would be appreciated. Finally, what is the benefit of the acquisition revolver versus just using the in-place revolver?
Okay, that is another one, a couple questions, but I will try to get a couple of them in. Dan will just. Let me start backwards. I think the benefit of the acquisition facility is it is just one more additional vehicle that we can have. We obviously fully funded with equity this acquisition we just talked about. The next one, we might use more leverage, all being leverage neutral to our target of $1.90, 6x, at or about $1.90, 6x debt-to-EBITDA in 2028. That particular facility has a little bit more flexibility than our revolver. I will let Dan talk because they did a great job of putting that together. It is a borrowing base kind of facility.
Dan, just take. On Niagara, I do not know if we want to. We cannot really talk too much about these mortgages that are in default, so lenders are listening or whatever. It is not really fair. Let us just say, we are in default. We are still having conversations, and we will let you know when we got more to say. That is what it is.
Thank you. Your next question comes from Alexander Goldfarb from Piper Sandler. Please go ahead.
Hey, good afternoon out there. The Path Forward and the signed but not yet commenced leasing obviously is you guys are in a really good spot. You also have the dispositions that you mentioned, some of which are give-backs or land. As we think about 2027 and that ramp, what's the magnitude of the growth as we think about offsets? Just trying to understand as we layer in the SNO, how much of that is truly accretive versus it gets offset by some of the other activities that you guys are doing as you position the company for 2028?
Dan, you want to try to take that one? Thanks.
Yeah, Alexander. I would just say, at the outset, we don't want to get ahead of guidance. We plan to put out guidance in February for 2027. Just bigger picture, to your point of the SNO coming in, with respect to your comment about dispositions, as we targeted for 2026 as an objective, $300 million-$400 million of dispositions, I walked through in the prepared comments, we're basically at about $290 million. So we're on track to be sort of within that range. That would leave, as we've talked about in the past, about $300 million or so of remaining dispositions in 2027. Those are largely in the outparcels and land component. We've provided some commentary in the past about those being an expected range of 7%-8% on disposition.
So that just gives you a little bit more specific commentary around how dispositions could affect 2027. Obviously, we're going to be providing guidance in February for the full year.
Thank you. Your next question comes from Linda Tsai from Truist. Please go ahead.
Hi. Thank you. The Go-Forward NOI growth rate of 4.7%, how much did Crabtree contribute to that growth? Are there any other items to think about as larger contributors, whether it is rent commencements, renewals, expenses?
I mean, we are not going to break down Linda, like the Crabtree. I think it is a combination of a lot of different properties contributing. Crabtree certainly did contribute, but we have some other assets that are also experiencing some real lift right now within the portfolio. So I would not say it is just one asset that contributed. We are seeing multiple assets kind of feed into this. That is kind of my comment about accelerating into 2027, 2028. You know, if you are seeing the early signs of it is just going to really carry through because it is happening across the portfolio that we are investing in, because there is major investment happening and realignment of new tenants. Dan, I do not know if there is anything I left out, you think?
No, just add to your commentary that you have made in the past around some of these later stage projects where we have invested the capital, we have got the anchors in place, we are starting to see the traffic, we are starting to see the sales, we are starting to see the NOI. Jack has talked about some of those at the later stage, being Scottsdale, as one example, Chandler, Tysons, et cetera. So those, to Jack's point, it is broad-based contributions across the portfolio from the NOI growth.
Yeah. One last thing, Linda, just on Crabtree specifically. I was not trying to like duck the question or anything, but it is just, there is a lot of assets adding. But, Crabtree is going to actually deliver better than we underwrote. Part of it is we merchandised the strategy a little differently. So originally, we were going to maybe have something different in the Belk's women's location. We have actually consolidated the Belk's men into that store. Belk's is, putting a lot of commitment to improve that store, add the wine bar, deal with the frontage. It is going to be a really nice store. They are under redevelopment right now.
We are putting in a Level99 in the former Belk's men's location, which was not part of the original underwriting and really materially is going to improve the trajectory of the NOI in that property, in addition to we are seeing really, really good leasing momentum in that center. So we are It is really exciting if you go down there because DICK'S House of Sport is now open and the common area renovations, the lighting, the handrails and things like that are really improving and we are going to get after the garages next. So, I mean, that center is going to turn out to be quite positive when you see the results.
Thank you. Your next question comes from Floris van Dijkum from Ladenburg. Please go ahead.
Yeah. Thanks, guys. Interesting, Jack, hearing you talk about competition for malls, which I do not think we have seen in the past. Maybe could you talk a little bit about the other parties that you are seeing on the certainly the marketed deals and how you think they are underwriting the business and how much of Is that a good thing for Macerich and the mall industry, or does that just create headaches because it is going to limit your ability to deploy capital in your view?
Well, first of all, thanks for the question. I mean, it's first and foremost, you know, if we do one property, maybe two a year, that makes a big difference for us. There's way more than one or two available out there. I don't feel like I think we're very comfortable with kind of what the universe of opportunity and what we're really focused on. I think it is interesting that the equity interest for these assets is quite robust. I would tell you that the lending, the advance rates, debt yields on these properties are really different than, say, open-air retail or, you know, other kinds of asset classes. You know, 14 debt yields, as you know, that's for a good standing property. You know, if you got one of the best properties to get investment-grade leverage, it's a 10 debt yield.
All of these types of deals that we're losing to, and they're primarily private, it looks like, buyers, it's a pretty meaningful equity check. I do think that that's long-term going to kind of create It would be a good thing for us. I think it's great that these assets are being recognized that way. Look, you know, Vince is going to keep lowering these, you know, cap rates on his, which is fine. Go ahead and do that, you know? It's great. But like I said, if we got one or two deals done a year, we're just fine with that. We're being pretty selective, pretty disciplined. There's no pie-eating going on over here. Thanks.
Thank you. Your next question comes from Haendel St. Juste from Mizuho. Please go ahead.
Hey, guys. Thanks for taking the question. Another one on the transaction market, maybe just from a different angle, I guess I'm curious, Jack, some of the observations that perhaps of the market here the last few months as rates have jumped around. Are you seeing sellers pull back from the table? Are you seeing any notable change in asset value to cap rates? I think earlier you mentioned the 9%-11% return for acquisitions, the minimum hurdle. I guess I'm curious if there's any scenario that you'd be open to doing acquisitions below that line if there are assets with perhaps maybe some really good long-term operating upside or a plus quality profile, higher productivity mall. Just curious on those. Thanks.
Yeah, look, I think. I do not want to say we would never go below 9% or 11%. That is not really good. I would say not all malls are the same. They do not all inflect in the same way. The trade areas are very different. I think we have been comfortable that we have been able to find this next asset that we are going to close on. I would just say maybe one observation, and I will go back to, we are not really in the open-air shopping center business, retail business. Even though we have some lifestyle centers. As you know, the debt financing and the leverage levels, debt yields are much lower for that type of product. Buyers are probably able to get better advance rates, less equity as part of the capital structure.
Smaller changes in interest rate on the upside, going up, affect IRRs. If you look at the mall space, you really cannot get that much leverage on these assets yet. They are just. Maybe if you go to a private lender, yeah, but you will have no cash flow after acquisition. I would say there is such a heavy equity component, it does not seem to be affecting people's IRRs necessarily right now. Obviously, that could change if leverage levels change, debt yields decrease. I would say for the time being right now, I think these, especially in the enclosed malls, they are just unique. They seem to be a little bit insulated right now from what we can tell on values, level of interest, and these increasing interest rates for the time being.
Thank you. Your next question comes from Omotayo Okusanya from Deutsche Bank. Please go ahead.
Yes. Good evening, everyone. Solid quarter, solid results. Jack, I am trying to reconcile a little bit again everything you were saying in regards to just how strong retailer demand is right now versus, again, I think we came off Q2 earnings for the retailers. Generally, I think the mood was not that great is probably what I would say the summary or the key takeaway was during our Q2 earnings around August. So I am just trying to reconcile a little bit versus how downbeat I think some retailers sounded then, and even a couple of retailers talking about slowing down store openings versus the general mood or retailer demand you are describing for your assets.
Yeah. I mean, look, I think as Doug describes, if you look at the tenancy that are primarily in our malls, I mean, as I said, they're international. They're large legacy brands coming back. It's quite diverse as it relates to the type of tenancy that we're able to target in these regional malls. I would just tell you that for new business today, we're talking about 2029. So if they want to temporarily slow, they're going into 2030, 2031. I mean, it's really I know you hear what you hear, but you also be careful as we're not dealing with discount retailers, other kinds of. These are all discretionary, primarily, types of retail users that we target versus non-discretionary. So I'm not suggesting that companies are focused and being selective, but they are expanding, but they're very selective.
If you have good properties in the right trade areas, right operators, and operating capability, there is demand. I can tell you that. But the demand is very selective, which is a good thing, I think, for the business.
Thank you. Your next question comes from Mike Mueller from JP Morgan. Please go ahead.
Yeah. Hi. I guess following up on the question or the comments about strong pricing in the marketed transactions, can you give us a sense as to how much lower comparable yields would be on a marketed transaction compared to some of the 9%+ one-off yields that you've been getting on off-market transactions? I mean, what's that delta?
I mean, look, I think the market's pretty efficient. When we're buying from people, they kind of know what the price is, and I think we provide a lot of certainty. I'd like to be able to tell you that on the deals that we've done to date and the one we're about to do, we've never really retraded anybody. We generally close as advertised, no drama. And having been on the other side, selling a lot of stuff, there is a lot of drama in selling these kind of things. People can't get. Different things come up in diligence. Lender is not comfortable with certain things. Maybe some of the guys' equity is not going the right way. Equity sources sometimes are moving around. Having been on the sell side of. We've sold, obviously, a lot of malls and given back. It's not easy as a seller.
I would tell you, if I had someone that, if I were marketing, someone preemptively came in, they hit my price that I was looking for, we would consider doing that. Because if you want to try to sell, there's a lot less brain damage than having going through a protracted auction process. That being said, there's a lot of bidders out there right now trying to buy these things.
Thank you. Your next question comes from Ron Kamdem from Morgan Stanley. Please go ahead.
Hey, great. Just a quick two-parter. I think a while back you talked about when you sort of took on trying to increase the permanent occupancy of the mall, which you thought was key to the strategy. I was just hoping you can give some updated thoughts on what your view is today, given what you're seeing on the demand side, what that permanent occupancy could be at the mall, and if maybe it's even higher than you thought previously. And then part two, just a really quick one. Just on recurring CapEx, maintenance CapEx, as you think about this 2028 plan, what's a good sort of run rate we should be thinking about in terms of just recurring and maintenance CapEx, whether total dollars or dollar per foot, whatever's helpful. Thank you.
Hi, Ron. On the permanent occupancy, this plan was all about trying to simultaneously get those 30 anchors committed and now opened, and finish the leasing in those wings that were really suboptimal for us. I think in our assumptions, we're always going to have some temporary occupancy in our business. If you looked at some of the things that we put out in our decks, we expect to get to 89% permanent occupancy and call it 6%-7% temporary occupancy. You always need some temporary occupancy in these centers. As I said, when X, Y, and Z wants a flagship store in this location, it's on us to try to move a tenant. It's on us to try to get a tenant out earlier if we can. In some cases, we have rights to recapture the space.
But we don't want them to leave the center, so we'll put them in other areas where I would call it more temporary occupancy. As we have all these anchors backfilled, that space that typically would be that temporary occupancy, pretty good space now. There's traffic, there's people. They're vibrant areas. So, I would say our temporary inventory is going to look a lot different in 2028, I'm talking about space inventory, than, say, compared to 2024. Then you couple that with all this increased traffic and demand, I think in the end, it's going to give us an ability to I'm not sure we'll ever fully reduce that temporary occupancy, but we're going to be able to maximize more efficiency price on the permanent side.
In terms of a maintenance CapEx per year, like $55 million-$65 million per year is kind of in our assumption as a maintenance CapEx.
Thank you. Your next question comes from Floris van Dijkum from Ladenburg. Please go ahead.
Hey, guys. Just a follow-up, more of a housekeeping question, if I can. What's your physical occupancy at the end of the quarter, and how much of the $30 million you said was going to hit by the end of this year, is that incremental or does that include stuff that's already hit, or is that all going to hit in the fourth quarter? Thanks.
Brad, sure, yeah.
Hi, this is Brad. I can take that one. As far as the $30 million of SNO, we've realized $20 million to date through Q3, and the remainder will show up in Q4. On our physical occupancy, we are at, hold on. We are about 91.5% physical occupancy versus the 96% leased occupancy.
Thank you. That does conclude our time for questions. I'll now hand back to Jack Hsieh for any closing remarks.
All right. Well, thank you very much for joining our call this evening, for those that dialed in, and a big shout-out to The Macerich team across the board that have helped us get to this point. Thank you.
That does conclude our conference for today. Thank you for attending. You may now disconnect.