Good afternoon ladies and gentlemen. Thank you for standing by. Welcome to the Macerich Company third quarter 2008 earnings conference call. Today’s call is being recorded. At this time all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. I would like to remind everyone that this conference is being recorded. I would now like to turn the conference over to Jean Wood, Vice President of Investor Relations. Please go ahead, ma'am.

Thank you everyone for joining us today on our third quarter 2008 earnings call. During the course of this call, management will be making forward-looking statements which are subject to uncertainties and risks associated with our business and the industry. For a more detailed description of these risks, please refer to the company’s press release and SEC filings. As this call will be webcast for sometime to come, we believe it is important to note that the passage of time can render information stale and you should not rely on the continued accuracy of this material. During this call, we will discuss certain non-GAAP financial measures as defined by the SEC Regulation G. The reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is included in the press release and the supplemental 8-K filings for the quarter which are posted in the Investor section of the company’s website at www.macerich.com. Joining us today are Art Coppola, CEO and Chairman of the Board of Directors; Tony Grossi, Senior Executive VP and COO; and Tom O’Hern, Senior Executive VP and Chief Financial Officer. With that I would like to turn the call over to Tom.

Thanks Jean. Today we are going to be discussing third quarter results, recent financing activity, the status of our redevelopments and our outlook for the balance of 2008. The operating metrics generally remains strong in the third quarter with continued high occupancy levels and strong releasing spreads. Total mall sales per square foot for the 12 months were up 0.65% to 463 a foot compared to 460 a year ago. The occupancy level remained high with quarter end occupancy at 92.8% that was down 10 basis points sequentially from last quarter and down from 93.5% a year ago. Most of the reduction versus a year ago relates to big box spaces with Steve & Barry’s accounting for 20 basis points and Comp USA representing another 20 basis points of the decline. Those were both very low rent payers; Steve & Barry’s average rent was $4 a foot, Comp USA average was about $11 a foot, both well below our portfolio average of $41 a foot. The leasing activity during the quarter continued to be robust with strong releasing spreads. We signed 266,000 square feet of leases, average starting rent of $43.47 a foot that was a 21% positive spread versus the expiration. Average rent per square foot in the portfolio is up almost 8% to $41.36 a foot compared to $38.40 a foot a year ago. Focusing now on results for the quarter, FFO diluted was $1.16 for the quarter that compared to $1.15 for the quarter a year ago. Consensus was 1.19, our guidance midpoint was 1.21 and the primary difference between the forecast and the actual results was almost entirely attributed to a forecast gain on sale of un-depreciated assets of $5 million and that compared to an actual result of 600,000. During the quarter same center net…

Thank you, Tom. I’ll be brief with my prepared remarks and then we’ll jump into Q-and-A. I want to make it very clear that we are well aware of the global liquidity crisis that we are facing today, that is really unprecedented. Here in the US we have not only have had impacts of that global recession, but we even find ourselves in a situation in Arizona where it actually begins to feel like a depression, but in spite of these global facts and the global economic condition, as well as the illiquidity that we find in the capital markets, we’ve continued to be able to put up very strong operating results across the board, as measured by leasing results and same center NOI results. Today in my prepared remarks I want to talk about Macerich’s access to capital, about our development activity, as well as about where we stand on the Mervyns portfolio that we bought about 10 months ago to-date. Any company whether it be a real estate or otherwise needs two things to survive in today's global liquidity crisis: one is a very strong balance sheet, which we had as outlined by Tom, but more importantly is access to capital. Access to the capital is required not only to run our business, but is also required for us to be able to be opportunistic. If we didn’t have a strong balance sheet as well as access to capital, for example Tom would not have been able and we would not have been able to go in and buy those convertible debentures at the price point we were able to buy them. So as you can see, in the increased and improved disclosure that we have on our maturity schedule, we have got plenty of access to capital…

(Operator Instructions) Your first question comes from Lou Taylor - Deutsche Bank. Lou Taylor – Deutsche Bank: Are can you just expand a little bit on Mervyn? Of your locations, that I mean the 41, are you going to have to bid at auction to get full control over this space or are you going to get it completely back and have freedom to negotiate?

If there’s no other bidders the answer is we get it fully back, but if you think about it as a sandwich we’ve got the ground leasehold position or the building withhold position on the one end and then we are protecting ourselves at the auction to make sure that we control the identity of the ultimate assignee and we are bidding in a percentage of our rejection damages which are really somewhat soft dollars or future dollars and in terms of dollars those are bids. So we have controls of the real estate not only through the sale lease back, through the REA’s that we have, that encumbered these promises, but we also do have a shadow bid sitting out there for all of these locations. I would be shocked if anyone of these locations end up in the hands of the retailer that we would prefer to have had another retailers take, so we are in very good control position. We have a senior executive on the credit risk committee, the seven men and women credit risk committee of Mervyn’s and adding myself are very close to and have a working relationship with the Board of Directors of Mervyn. So, we feel that we are in a unique position to control our destiny, which was the really the business plan a year ago, when we bought these 41 stores. Lou Taylor – Deutsche Bank: Are all these stores subject to auction? I mean as the process under winds or is it just some smaller percentage?

Those stores which have not been spoken for by the auction date will be subject to auction, but I suspect that there will be a significant number of stores that will end up being sold to a major retail player prior to the time that they go auction. As many as my guess is 37 stores up to 40 stores will be acquired by major retailer and/or retailers, before they ever get auction and actually about the way that I suspect it will play out, than a major retailer and our retail spoken for over half of the 41 stores that we have with Mervyn, before they ever hit the auction block. Lou Taylor – Deutsche Bank: Great and then second question is for Tom. Tom in terms of the 2009 and 2010 debt maturities, what’s the profile of the current note holder in terms of Life Company, CMBS or bank. I mean, I figure with the banks and the credit lines, but in terms of the property level mortgages, what percent are CMBS versus Life Companies or others?

It’s about 50-50 Lou, that’s not an exact number, but it is a combination of Life Companies and CMBS for most of these. We are well on our way in conversations on the 2009 maturities. I mentioned the one deal that we already have under contract, but we’ve probably got at least half of the others where we’re in deep discussion with lenders on those. So, obviously we are very successful in the 2008 in the assets we are refinancing and 2008 were good asset, but not at the same quality of what we are looking at in 2009. So, we feel that financing plan that we put in the supplement is reasonable and on the low end frankly conservative. Lou Taylor – Deutsche Bank: Okay and then our last question and I’ll get back to Art; in terms of just the Scottsdale Fashion Square, are you hearing anything from retailers that are asking you to may be slow down those projects, maybe open more in 2010 or a little bit later given just the status of the Arizona economy.

Well Scottsdale, the expansion wing is opening in fall of ’09, so that’s set in timeframe and we are virtually 100% leased in the expansion wing there today. Austria, we currently have targeted fall of ‘10 as our opening date. It is possible, well as a matter of fact it is likely, that we will open Austria fall in phases, with some phases opening up in 2010 and the balance opening up in ‘11 and ‘12, but from a retailer perspective, we have department store commitments that are all focused around our 2010 opening and we’ve got pre-leasing at Australia falls, so that is well over 60% of the space that is already accounted for. We do have the ability to gauge exactly when we want Austria to open up and it is possible that we could voluntarily make the decision to get the most bang for our buck with an opening in spring of 2011 at Australia. Likewise for example at Santa Monica Place our original plan was to open up the expansion of Santa Monica Place in the fall of 2010, but because of the fact we have Bloomingdale’s taking over the Macy’s store at Santa Monica Place, we all of the sudden are faced with a situation where in November and December of 2009, both the May company building and the Macy’s build will be dark. So, we are currently going through our process and even though the fact that we are well over 60% timed and committed in our smaller shops spacing, over 80% of total GOI is committed at Santa Monica Place. It is possible that we will end up moving the grand opening date for Santa Monica Place to coincide with the Bloomingdale’s opening date which currently looks to be February of 2010. So it’s barely even a full season we’re talking about, that’s between a November opening date for Santa Monica Place. It’s a major first phase to February, so that is something that we could decide in the next three to four month to move the grand opening date of Santa Monica Place of February of ’10 versus the November of ‘09 that is shown in the supplement that is filed today.

Your next question comes from Christine McElroy - Banc of America.

What types of lenders do you see as most likely to issue new debt to take out your CMBS coming due in 2009, 2010? Are the Life Companies willing to have those types of discussions today?

Well Christy, there is no question. I mean we’ve had quite of few conversations, we are very active this year and primarily this has been Life Company deals, we did do two pension fund loans and depending on the type of asset, it’s been a recent redevelopment or if it’s got a construction component we’ve done some bank financing, but generally speaking for the take out on the CMBS, it’s going to be Life Companies.

And in the financing plan disclosure that you provided, can you discuss kind of a general assumption that you used when calculating the new loan amounts and your low and high refinancing scenarios including cap rates and loan to value?

We could be here all day deferring that in debating cap rates, but suffice it to say its conservative underwriting and the existing loans almost for anybody’s underwriting assumptions or under 40% leveraged today. So, it’s conservative underwriting and each individual property has a different set of assumption, but it’s been very conservative and I think our results in ‘08 speaks for themselves, when you look at what we’ve done there, ‘09 isn’t a stretch all.

Are there any contingencies, rate changes or costs associated with exercising any of the expansion options you outlined in our ‘09 and 2010 debt maturity?

No, they’re almost all at the election of the borrower as long as the loan is not in default.

Okay and then just lastly on Mervyn’s, can you comment on what types of retailers or what retailers specifically you’re looking to take over in that space and the two thirds that you said you have interest on.

Sure. Kohl’s has got a very high level of interest in some of the spaces, there are sporting good operators that have shown interest and then there are other retailer that have shown interest in taking over stores, some of which are really kind of new to market in terms of size, but we are very pleased with the level of activity and interest that we see in these stores. You have to remember, this is interest that is being expressed while the retailer landscape in general is at the weakest moment, but it’s been out in many years, so again that’s testimony to the strength of the real estate that Mervyn’s is located within at the centers as well as the centers where we entered into sale lease back. I would say in most cases it’s going to be a national chain.

And those 40 stores that will probably be acquired by a major retailer or is that forever 21.

That’s the one that’s working on 40 stores, yes.

Your next question comes from Jay Habermann - Goldman Sachs.

It’s [Joanne] with Jay as well. Looks like you’re proceeding pretty much on track with your current development schedule for ‘09 and ‘010 deliveries and we are just trying to get a sense for how you’ve been thinking about future development projects versus trying to preserve capital in this environment and maybe even how you’re return requirements might have changed when you think about underwriting new projects.

Sure. No problem. This is Art. I’m glad you asked that. There are no funding obligations that we have in anyone of our development projects that could not be funded from the current annual cash flow that we have within the company, but the reality is that we are funding our development pipeline with excess proceeds or refinancing proceeds from centers that we’ve owned for a long period of time. So, the process is very simple, that we have properties that mature, we go ahead and we refinance them, we take out a lot of dollars and then we either use that money to take down our line of credit and we fallback into a development or redevelopment. So, again I want a emphasis that not only we have a very strong balance sheet, but we also have a very, very strong access to capital in today’s markets. Certainly the thought of preserving capital is not in our vocabulary for one today, because while we are respectful of the demands that capital has and the hurdle that the capital requires; the fact that we’ve been respectful of the demand and the hurdles that capital requires for our entire history and clearly our last 15 years as a public company, that is the absolute reason that we have a strong balance sheet and that we have access to capital. If we were not respectful of capital then we could be in a position where we were using the word preservation, but that's not in our vocabulary at 401 Boulevard.

Okay and then would it be fair to say that you are still sort of targeting yields on new developments in that 8% to 10% rate and then maybe a couple of percentage points higher on redevelopments?

Every piece of chocolate tastes differently in this case, but the range is generally a range of 9 to 11 on new deals, and 6 to 10 on redevelopments and part of the reason I have the lower end of the range on the redevelopments and expansion is that any time we do a major redevelopment we kind of go through a punch list of items that are required to bring a property fully up to date and a lot of those expenditures are not income producing but it is part of being a good steward in terms of owning your properties than making sure they have brought it to date. Our hurdles for returns remain fairly constant in terms of what we see. We are very demanding though I would say, from a disciplined viewpoint to make absolutely certain that the projected returns are hit and there’s a big difference between sending out a pro forma and talking about a pro forma and meeting a pro forma and so there’s a great deal of focus on that and we have a tremendous track record of bringing in projects on time and on budget.

Okay and then just one more question, it looks like your same store NOI for the quarter was about 2.2% over the prior year and with this specific region, is it still sort of Phoenix that’s driving a lot of that moderation and then again what would be your projection for year end NOI at this point?

We don’t really look at that regionally, that 2.2 is a blended rate across the whole portfolio. The guidance we gave originally for the year was 2.5% to 3%. We are currently at 2.9%, so we are right in the middle of that guidance range. You will probably note that my conversation about guidance, part of the guidance was a reduction relating to percentage rent and we have moved that down a little. So we still feel we’ll finish the year on same center NOI between 2.5% and 3% and we have factored that into the revised guidance.

Tom just to add on to that we are aware of the fact that and are happy to disclose to you that the items that will drive NOI growth throughout the portfolio in the fourth quarter of this year and throughout ‘09, at the end of the day, half of it is CPIs, because we have over half of our leases subject to annual CPIs. So, that’s kind of a built in insurance policy for same center growth, but beyond that you have to really look at releasing spreads and occupancy levels and our Phoenix releasing spreads are consistent with the rest of the balance of the United States. They have been exceeding 20% just as the United States has exceeded 20%. So, while there are lows in the marketplace on mainstream in Arizona for the home builders the fact of the matter is that the pricing power that we have in Phoenix in particular is so strong that we are able to maintain 20% spreads on leasing, in spite of the fact that we are experiencing a regional depression in the Arizona marketplace and not only have we been able to meet those leasing spreads to date, but we are already well over 80% committed for 2009 across the board and that includes Arizona.

Your next question comes from Mike Bilerman - Citi.

Thank you for asking that. We are going to act in our own and lightened self-interest on all of those stores and make as much money as we can on each and every one of them.

I love that answer. Okay and so I mean if you’re releasing these potential new tenants, then I’m just wondering what the potential CapEx spend could be when you’re doing that?

I would say the minimums. All of the deals we are work on are as is with deals with retailers. So, I would say across the board its the minimums.

So, would there be a rental down time at all, a rental avoid?

Well, we had three months of letters of credit that protected us and one the spaces are no longer paying rent and while spaces have announcements they’re going to GOB sales and Tony you can help me on the process on this, but even though they announced a GOB sale we’re only just completing GOBs on 26 of the 171 stores and I think they’re getting ready to start the GOB process on the other 145. Generally a GOB goes on for around 90 days, it can be 60 to 90 days and at that point in time the store becomes dark and then it goes to an auction. So, as we see it, before the auction date hits, we will have identified virtually across the board replacement users; does that answer your question?

Yes and Art, just going back to the other landlords, what rights would they have in terms of potentially blocking you from being able to put in a replacement tenant, to be able to maintain your rental stream and I guess you sell that box back to them to elevate that?

Well, we are friends with all the other landlords and I don’t anticipate any problems there.

Just another one on the leasing that you’ve done for ’09; you said that 80% of your leasing was up for redevelopment to development. I’m just wondering what kind of tenant incentives or rent raise you had to give in ‘08 for that same increase?

Quentin, this is Tony. Before you ask it, that was too much of a soft ball. We don’t use the word give away. We consider it to be an investment in our retailer’s futures. So Tony, if you can jump in now.

Sure. At this point, the quality still is being priced much. As we talked about in prior quarters, you see it in our spreads and actually the amount of TAs out the door if you track it, as the amount of effective rent, actually it’s been going down over the last four quarters. So, the quality of the deals that we’re doing continues to improve and especially on the better assets we are not finding that there’s an erosion in the business trends. Now the retailers are taking a little longer to run it through their process and they do have fewer stores they want to open, so they want to make sure when they do, their due diligence, they take the risk out of store opening. So you could see a little bit of a delay in terms of the number of stores or a little bit of a time lag in terms of getting these retailers to commit in this environment.

Your next question comes from Michael Mueller - JP Morgan.

Basically can you go through and quantify where you think the refinancing rates will be when you look out to 2009. I mean what sort of terms are lenders putting out there? I know you did the 6% mortgage on Washington Square, but I’m assuming that was negotiated a little while ago?

Mike if I could tell you where rates were going be by 2010, I’d be retired and probably very liquid and sitting on a beach in Hawaii somewhere. Given that I can’t do that, I’ll tell you what we’ve been seeing and you can make your own judgment as to whether that continues. Obviously, the rates have been bouncing all over. We’ve seen good interests and the lending levels most comfortably are between 50% and 60%. Probably I’m more conservative with underwriting than we’ve seen in the past, but nonetheless, quite effective for us and it should allow us to continued see refinancing proceeds in excess of the debt retirement and generally speaking, they’ve been about 250 over the treasury. I will say that when the treasury dropped significantly 30 days ago. It started to either increase or flow started to show up, but it’s not too far from traditional underwriting. I’d say a good A mall today at 50% to 60% leverage is going to be treasuries plus 250. I mean we have been going with seven-year financings just because the yield curve was fairly steep between seven and 10 years, the 10-year money is available also. Again it is for high quality assets and good sponsorship.

Okay and then maybe one question for Tony. When you take a look at them, I know you guys don’t have 2009 guidance out, but based on the leasing you have seen for 2009, does it feel like you are going to hold the line in terms of occupancy or any erosion will be minimal at this point?

Yes, we are in the process of planning right now and we are typically out anywhere between 12 and 18 months in our leasing and there could be some occupancy pressure on bankrupt sales that we know of today; it is not going to be significant, but we were seeing so far that occupancy should hold in and around the levels that we have today and the pricing as I mentioned in the last question, we still have that same view on pricing on the quality.

Your next question comes from Steve Sakwa - Merrill Lynch.

Just I guess two questions. First for Tony, when you’re talking to retailers I guess you’re looking at different productivity levels and they’re thinking about store openings and store closing. I mean how are they thinking about I guess productivity in a mall and you got clearly a range of that here in the portfolio from 350 up to 800. I guess has the first down marker have been moved in terms of where they want or maybe stores or locations that are under more pressure today?

As a retailer, the conversation is really about the longer term. Productivity is an important measure for them in terms of how they measure success. So, if they were to look at this season and they are very, very concerned about this season and totally focused on Christmas and trying to get their business model out, keeping their margins full, productivity is important. It drives their affordability on rent, but they do take a longer term view of it, especially on the better assets where really occupancy remains high on those assets and to get an opportunity for the right location in those assets, regardless of the fees and regardless of the time, they are going to be very keen on trying to establish their business in the better malls.

But I guess you are not seeing them driving a harder bargain and say mall that do sales less than 400 a foot?

In any time those deals are far more creative. Those centers for us, we do have them, but they don’t really drive our business. Our top 50 assets really drive over 80% of our business, so that’s our focus in trying to drive the business on those assets.

Okay and then Tom maybe sort of a related question, how do the lenders look at properties obviously at an 800-foot mall, it seems to have no issue, but what about properties doing suite 25, 370 a foot. I mean, how are lenders looking at those today?

Well I think to a large degree, it’s the quality of the sponsorship Steve. I mean if you look at what we did in 2008, those centers averaged about 450, but there are a couple of centers in Phoenix that we just closed on October 1 and one was doing 300 bucks a foot, one 400 and they look for the quality of the tenants and they still see national credit tenants and even if the sales are only 300 or 400 a foot. We got both of those transactions financed of about 250 over the treasuries and that was done with the pension fund and deals can still get done. I will tell you they’re picking their spots and look heavily on the sponsorship.

I mean not to dwell too much but if you look at Chandler, basically the debt maturing was effectively equal of almost the new loan proceeds. Where you look at something like Victor Valley you almost double the loan proceeds and…

I think that there’s a store behind Chandler. We have a partner in Chandler loom and the partner has a major tax disadvantage if they were to refinance at levels above the current debt; if that’s the one you are referring to.

Yes, there were some tax considerations there Steve that generally imply on the other transaction, I don’t think you can really draw a comparison between those two.

But a good example Tom would be North Bridge mall and Paradise Valley mall. I mean, Paradise Valley I don’t have it in front of me, but let say it’s the high 250 to 370 a foot center. You got strong refinancing interest in that and that’s going to generate some very substantial refinancing proceeds.

Actually now you mentioned paradise valley, there’s been a tremendous level of interest in paradise valley. There’s only $20 million in debt there and we are going to put a loan substantially in excess of that. At least $100 million in excess of what’s maturing there and there has been a very high level of interest there.

Your next question comes from Mike Bilerman - Citi.

I just wanted to come back on the convert buyback, just understand how you thought about that while having capital capacity to do it. Given the fact that when you did it you had a cap call which put the convert price at 130, so effectively this was more trading like a bond and you effectively retired it at 3.25 coupon, so you effectively got it at a 6% cost relative to you and you I guess thought about it perspective of 2012, will be [Inaudible] so why not buy at a discount today?

Michael, from an investor standpoint those bonds were trading close to 25% yield and maturity. September 30 they were trading in the neighborhood of 85, and as a result of the turmoil with the convert funds they’ve permitted and we had a very unique opportunity to retire debt at under 60% of face value. So from our standpoint we have just created a tremendous amount of value. It was a very, very attract opportunity anyway you look at it.

But the nominal cost that you had on that debt was in the threes, at least today. So, even if you bought it at a discount effectively it’s basically a push from an earnings perspective, at least initially?

Well, it was the economics that were incredible. I mean we created over $50 million worth of value and you can’t be driven solely by what happens to your interest expense because as you know there’s some new accounts rules that would have driven that 3.25 up anyway. So, you got to look at what is good cash economics and I think anybody on this phone that could retire their mortgage at $0.55 and $0.57 on the dollar would jump at that all day long and that’s exactly what we did.

And your $0.47 to $0.52, that is your net number for the gain on the buybacks of the convert plus potential charges you may have on other debt retirement?

Right. In this market if you’ve got the opportunity to get a financing put in place, then it means you’ve got to deal with a little bit of a prepaid penalty here and there. We feel it’s prudent to do it and we expect to have some of those between now and the end of the year.

Your next question comes from Paul Morgan - FBR.

Do you consider that a one time event with the converts or would you still be pursuing that?

Paul, there are some size limitations in terms of what we can do according to our counsel and another consideration is liquidity, so we kind of balance the two. We just closed on the South Town financing and so we had just generated $90 million in cash and we felt we had comfortably given what was on our place in terms of future financings and developments etc. We felt like we can comfortably spend $70 million or $80 million and take advantage of that opportunity and I suspect after this call, the closure to the pricing on that is probably going up.

Have you worked through or have I missed that you provide any detail on the accounting change on the impact for next year for the way it will show up for you?

No, we haven’t done it, Paul. Everybody has been kind of in the same boat, but I suspect that rather than using the 3.25 face for those converts it will be more or like 4% or 4.25% or something like that. It gravitates to your average interest rate.

And the amount currently outstanding is?

It is in the ballpark of $810 million, something like that $810 million to $820 million.

Your final question comes from Ben Yang - Green Street Advisors.

Art, you made a comment earlier in the call that Arizona feels like a depression. In light of comments like this can you re-institute the practice of providing regional sales differences within your portfolio?

Actually, I have no reason not to.

Can you tell us that now?

Yes, absolutely.

Ben, it’s Tony here. I will provide some color and direction on that. The consumer has been struggling all year and the confidence really was stripped in September. As Tom reported our sales were up a tad, 463, but when you break it down, our eastern region is still doing quite well on the heels of Tysons and Queens. Our Central region is still well. These are substantially in the positive territory; Eastern is up 14%, Central is up 5%. Northern California is flat; Southern California were up almost 5% for the quarter and Arizona is the trailer and we are off 9% in that region.

And you said that’s for the quarter; right?

Yes.

Okay and then have you published a list of the 41 Mervyn’s that you acquired last year? I don’t recall seeing one?

Yes we have and I’m happy to do so. I know it’s in the public domain somewhere.

Okay. I mean would you guys mind making that available to us?

No problem.

Thank you.

That was our last question. We really appreciate you being with us. We look forward to seeing many of you in a couple of weeks at the May conference here in San Diego and again thank you for joining us and we look forward to seeing you in a couple of weeks.

Ladies and gentlemen, this will conclude the Macerich Company’s third quarter 2008 earnings conference call. This does conclude today’s conference and you may disconnect at this time.