Type of tenants
As a strategy, most retail malls have two types of tenants—anchor and inline. Anchor tenants are the key tenants, with large stores and a big name in the business. Anchor tenants attract other smaller tenants and customers to the mall. On the other hand, inline tenants are small tenants, which benefit from the footfall that anchor tenants draw to the mall. Anchor tenants pay lower rents and enter into longer leases than inline tenants.
Macerich’s centers, excluding Great Northern Mall, derived approximately 74% of their total rent for fiscal 2014 from mall stores and freestanding stores under 10,000 square feet. Big box and anchor tenants accounted for 26% of total rent in 2014. Total rent includes minimum rent and percentage rent. The graph above shows retailers (including their subsidiaries) that represent the ten largest rent payers in Macerich’s centers, excluding Great Northern Mall, based on total rent in place in 2014.
The top ten tenants of Macerich (MAC) include big brands like the following:
- L Brands (LB)
- Forever 21
- Gap (GPS)
- Foot Locker (FL)
- Abercrombie & Fitch (ANF)
- Dick’s Sporting Goods (DKS)
- Sears Holdings Corporation (SHLDV)
- Golden Gate Capital
- American Eagle Outfitters (AEO)
- Express (EXPR)
These top 10 brands contributed around 17.3% to Macerich’s total revenue in 2014 compared to 16.3% in 2013. L Brands contributed 2.8% to the company’s total revenue in 2014, followed by Forever 21 and Gap, with 2.5% each, and Foot Locker, with 2.1%.
In all, anchor tenants accounted for approximately 8.5% of the company’s total rent in 2014, excluding Great Northern Mall, compared to 6.8% in the previous year. The iShares US Real Estate ETF (IYR) invests 1.30% of its portfolio in Macerich.
In the next part of this series, we’ll discuss Macerich’s development and redevelopment projects.