Macerich (MAC) is a REIT focused primarily on regional and community or power shopping centers. It either owns or has a stake in 52 regional shopping centers and 8 community or power shopping centers.
Regional shopping centers are generally enclosed malls with two or more anchor stores that are typically department stores. Regional shopping centers usually contain 400,000 square feet or more of gross leasable area.
Power shopping centers are also referred to as power strip malls, and are usually unenclosed with three or four big box retailers. They typically range between 250,000 and 600,000 square feet.
Macerich’s place in the industry
Macerich is in the second tier of large retail REITs, behind Simon Property Group (SPG) and General Growth Properties (GGP). As a player in the community or power shopping center segment, the company’s closest comparison would be Kimco Realty (KIM).
Macerich’s biggest tenants are L Brands (LB), The Gap (GPS), and Forever 21. Its biggest anchor tenants are Macy’s (M), Sears (SHLD), and JC Penney (JCP). Retail REITs are exposed to the fortunes of their biggest tenants, and both SHLD and JCP have been struggling as of late.
Simon Property Group (SPG) has made a takeover approach to Macerich, which it’s currently evaluating. Simon is considered a best-in-class operator and expects to be able to pull out synergies through more efficient operations.
Other merger arbitrage resources
Other important merger spreads include the Hospira–Pfizer deal. The Hospira (HSP) and Pfizer (PFE) merger is set to close in 2H15. For a primer on risk arbitrage investing, read Merger arbitrage must-knows: A key guide for investors.
Investors who are interested in trading in the REIT sector should look at the Vanguard REIT ETF (VNQ).