Please standby, we are about to begin. Good day, ladies and gentlemen. Thank you for standing by. Welcome to The Macerich Company Fourth Quarter 2012 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 fourth quarter 2012 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 industry. For a more detailed description of these risks, please refer to the company’s press release and SEC filing. As this call will be webcast for some time 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 that defined by the SEC Regulation G. The reconciliation of each non-GAAP financial measure to the most directly comparable GAAP measure is included in the press release and a supplemental 8-K filing 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; Tom O’Hern, Senior Executive Vice President and Chief Financial Officer; and Robert Perlmutter, Executive Vice President, Leasing. With that, I would like to turn the call over to Tom. Tom O’Hern: Thanks Jean. Today we will be discussing the fourth quarter results, capital activity and our outlook for 2013. Also most of you noticed in the supplement this morning, we have reintroduced the additional tenant sales per square foot by property disclosure. We’ve also stratify what percentage of our NOI comes from each major sales group. We have also added some additional joint venture disclosure and NOI by state. Looking at the operating metrics for the quarter, the fundamentals continued to be good in our business, retail sales had another good increase. We saw very significant increase in occupancy level 93.8% which is 110 basis point increase…

Thank you, Tom. First of all I want to review with you and welcome to our call, the results of 2012 and give you my outlook for 2013. 2012 remind you, was a great year for Macerich on many fronts. One year ago, we gave our Board of Directors a five-year plan on where we want to take the company and at Board meeting last week I told them that, frankly, I felt that in the last 12 months we had accomplished almost 80% of that five-year plan. One of the big things that we had -- that we wanted to address in our five-year plan was to make a material extension and lathering of our debt maturities, as well as to address the debt that was coming up in 2012, and Tom, and his team did a great job, you saw the significant more than $2 billion of refinancing that were done during the year at very attractive interest rates and we had the ability to layer out the maturities, so that extremely well spread out in over the next 10 to 12 years. The average maturity schedule was taken out significantly and we have an opportunity, obviously, this coming year to further add to the extension of our maturity schedule and to layer in some very attractive new debt. Another objective that the company had in 2012 was to increase the percentage of income that we get from wholly-owned assets. During 2012 we were able to do that by acquiring at an attractive price our partners’ interest and FlatIron Mall in Broomfield, as well as our partners’ interest in Arrowhead. Finally on the acquisition front, we were able to acquire two extremely attractive opportunities for us in the Greater New York area with Kings Plaza and Green Acres.…

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Thank you. Is it possible to get the breakout of retail sales by region?

Sure, Craig. The retail sales by region is for the trailing 12 months per square foot basis. The central region was up 7%, the North California of 6.6%, Southern California 5.3%, Arizona 4.0% and Eastern region 5.5%.

Okay. And the strength that you had mentioned in the Phoenix area, are you seeing that widespread throughout Phoenix or is it concentrated in certain areas of the city?

No. It’s widespread. As I indicated, probably the toughest hit area and all of the Phoenix was the area south, southeast of Gilbert, the Queen’s Creek in Coolidge area and that’s even got homebuilders. We own a piece of land that we thought was going to be a retail site. We’ve pretty much written off on our minds four years ago. We got homebuilders coming to us who want to buy just broad desert and come in and improve it to do subdivisions. We got old GM Proving Grounds east of Mesa that DMV owns the 5,000-acre track that they own there. They just had a half dozen homebuilders coming and buy big tracks of land to work there. So I mean, it’s across the board. You’ve got high end of luxury apartments being built throughout the year. We have a lot of urban infill. It’s happening around the around the Scottsdale Fashion Square area, a lot of action around Biltmore Fashion Square. Obviously, (inaudible) area is doing great. West Phoenix is beginning to rebound nicely which actually gives us confidence that our site out there in Goodyear is something that is going to be, something that we want to build on in the foreseeable future. So it’s the entire trade area of extending all the way down through the quarter going down to Tucson.

Okay. I’m going to turn it over to Jeff.

Thanks, Craig. Just one question, just, we appreciate the additional disclosure and I thought it was interesting from Group 3, your top 21 to 30 malls that’s where you saw the largest increase year-over-year in sales per square foot and listed by a couple of the malls, but I don’t know if there is anything there you want to talk about, anything by mall or by region in particular? Tom O’Hern: I don’t think there is anything necessarily profound in those numbers there.

Okay. Tom O’Hern: I don’t think there is anything profound there.

Okay. Thank you. Tom O’Hern: Thanks.

Thank you.

And our next question will come from Nathan Isbee from Stifel Nicolaus.

Good morning. Again, thanks for additional disclosure. As you look at your portfolio and how much of your sales are coming from the higher productivity malls, can you comment on what you believe is a reasonable internal growth rate from your portfolio? As I look at the ‘12 and ‘13 combined, even if you add back the redevelopment disruption, it’s about 6.5%. Some of your peers are trending better during that period.

Well, we have a long history of being able to attain same -- same-center NOI growth?

Yeah.

Okay. I mean, we have -- Tom, could even go through the history with over a number of years about what the same-center over a period of time has been. And I did want to give you color into specifically 2013 and that also applied to 2012 in my comment that I’m not -- I do know that look we -- if we’re redeveloping a center unless we’re shutting it down, it stays in our same-center NOI. And you could have drops in the income and significant at time as you’re taking it especially at high end center or a center where you got big rents. You can actually have a reduction in income from frictional vacancy as you’re replacing, moving tenants out and moving tenants in. And the advice I would give you for 2013 is that we are not doing that at the four or five centers that I identified or same-center growth for 2013 would easily be 4%. Tom O’Hern: Nate, everybody defines that same-center growth a little differently. It’s not a GAAP number. And so I think what’s important is, how it is relative to and how we done in the past as we’ve had the same definition. And 2013 as we’ve given guidance will be a higher same-center NOI growth rate since 2006. But it’s not what we aspire to. I mean, I understand your point that at two and three quarters to three and a quarter that appears to lag others. I understand that point, I get it.

Okay. No, because the color is helpful. Tom O’Hern: Yeah. Thank you.

And then just on the planned addition on the top floor at Santa Monica. What are you envisioning just there in terms of a credit tenant and how much capital you would expect to spend there?

It would be -- it’s a large project that involves something there as well as something on the promenade. And it involves a development agreement that we undergo shading hopefully with the city. So we’re not prepared to be more specific. It would be less than $50 million of the total project. It would have greater than 10% returns on it but much more importantly, it would be a huge traffic generator for the third level. It would be of use that it would be the most natural use to put on the deferred level with all of those restaurants and also to drive huge traffic up through the center. So you could speculate that in entertainment use and the city of Santa Monica is in desperate need of a first-class cinema. We don’t have one, haven’t had one for a number of years. It’s public knowledge in Santa Monica that AMC had plans to build a new theater at Fourth in Arizona and they backed away from that agreement a couple of months ago. So we’ll see where that all goes. We’ve always felt that the natural anchor would be of theater use and there is lots of political issues that have to be dealt with. But we’re fairly optimistic that everybody’s interests are aligned and that’s something that we can finally tap into over the next year.

Okay. Great. And then finally, to Tom, what does guidance assume in terms of the ATM during ‘13? Tom O’Hern: There is no equity assumption in 2013.

Okay. Thanks.

On that point, we were asked the question as to were we intending to reload our balance sheet after the $1.7 billion of acquisitions three months ago and our statements too was that, yes, we did intend to reload our balance sheet and that we felt that dispositions of non-core assets would be an excellent way to go. And we’re well into that process.

Thanks.

Thank you.

And we’ll now go to Christy McElroy with UBS.

Hi. Good morning to you guys.

Good morning, Christy.

I will join the fray and thank you for the disclosure. It’s really much appreciated. How long does INTELSAT have to decide whether or not the full 50% of Tysons office building? And are you not actively marketing that additional space because of that option?

They will be deciding in a couple of months. In an agreement like that you have backup people but I’m not sure what they’ll do. It’s actually when you look at the building, it’s about 520,000 foot office footprint the entire building. So they are just over 40% and -- but like I indicated, we are far along with another anchor tenant in the letter of intent stage and hope to be able to announce that soon that would take us up over 65% leased in after that. It’s just you have a whole bunch of tenants that are single floor, take the whole floor type of tenants. So we’re very bullish on where we’re headed with that and we are -- it is a go-project on all three towers at this point in time.

Okay. And then regarding the Fashion Outlets of Chicago, you’ve spoken in the past about forging sort of a link between the center and the airport through shuttle buses and bag checks, things like that. Can you talk about some of those initiatives that you are working on to drive tourist traffic from the airport? And will they be in place day one?

I believe it will be. As we get more color on that, I will let you know we have a TSA approved provider that is approved by the Department of Homeland Security to actually do the baggage claim checks and issue tickets of that nature at this center. So look it’s in progress. We think it’s an opportunity but we think the center is going to do terrific just from its regional draw through automobile and real traffic and mass traffic to the extent that we’re able to tap into the layovers or the people going to and from the airport. That’s a bonus but it’s a bonus that I think we’ll take it into extremely high levels of productivity. And we’re going to open up every door of opportunity that we can there.

Okay. And then just lastly, at North Bridge, I know the buildout isn’t costing you much but can you say what Eataly is paying in rent? So just trying to figure out what your sort of direct return on that investment is aside from sort of indirectly just driving more traffic to the center?

I’m sorry. I cannot.

Okay.

But it’s….

Have you given a return on that?

Pardon me.

Have you given a return on that project?

No. I think I did indicate the total project is under $20 million from all the efforts that we’re doing there, I would anticipate that will raise the NOI at least $5 million from that activity but I don’t really think it is being at 25% return but that will include Eataly area.

Got you. Okay. Thank you.

Thank you.

And we’ll now go to Cedrik Lachance from Green Street Advisors.

Hi, Cedrik.

I just wanted to add my voice to all of those that have already thanked you for significant additions to the disclosure package. It is very much appreciated and it’s very much going to help the work we do.

Thank you.

I guess, when I look at your asset disposition plans and those investments you have made in the fourth quarter, depending on the number of properties you are able to sell during the coming quarters. You may still have perhaps some equity that you may want to fill. Given where your share price are at this point, how interesting is it to issue more equity now?

Well, it’s not disinteresting. I mean, we did sell -- we did tap into the ATM at around $60 to $61 a share in September. So that’s some guidance but at this point in time even though we had a wide range on the dispositions, we think there are lot of people that have a lot of work on the buy side, the different private equity groups as well as a couple public companies. We need to let that hand play out and see where we end up. It’s possible that we can raise a $1 billion of equity from these dispositions. So we just really need to let the hand play out and sequentially revisit at topic as time plays it out a little bit. It’s not disinteresting, but right now I think we are inclined to let the hand play out. Look, if there’s significant slippage for whatever reason on the buy side and again, I’ll be the first to tell you. As a seller, I can never predict what a buyer will do. I can always predict as a buyer what we will do. But if there was slippage on that side of it, and then the idea of tapping into the equity markets either through the ATM or in a direct deal would be something that we would have to seriously consider given our overall goals to reduce our debt-to-EBITDA ratios. But more importantly just to raise the capital from the equity markets or dispositions to fund our development pipeline. That’s really what’s driving this. We’ve got this development pipeline here that we would prefer to fund with either rollover of asset sales or potentially common equity. On the refinance side, we have enough that we can refinance out of the three to four properties that are coming up this year. We can fund our whole development pipeline doing that. But that would tend to drive our debt levels up. And I think as I said in the last quarter, you can never have too much equity. You can never too little debt. And I guess I will add to that, you can never have too much disclosure today.

That’s good. And in terms of the potential buyers into the 17 properties you have in the market, is there anyone that would be interested, rather in a joint venture with you, or are those all outright sales?

If we opened up the idea to joint ventures, it would take the universe to a much larger group of people. Yeah. There is definitely where it be. Some of those folks would be interested. But if we opened up the ideas to joint ventures, there is significant amount of capitals from many sources that have approached us. But one of our goals at this moment in our life is to increase the percentage of income that we have wholly-owned asset. We just think that that’s a better goal for us at this point in time and it’s a goal that we can take advantage of at this point in time. And to some degree, a lot of these assets that we are selling are unencumbered and we could go and raise. There is tremendous amount of money just by encumbering the assets, but that kind of runs counter productive to pruning the portfolio and to the idea of just keeping our debt levels continuing to drive them down without a specific goal. But the only goal being, you can never have too little debt, you never have too much equity.

Great. Thank you.

Thank you.

And our next question will come from Michael Mueller from J.P. Morgan.

Hey, Michael.

Hi. I guess one question, looking at the tearing of the assets, how do you think about the lower productivity Arizona assets where, obviously, essentially you have a big stake in the market there, but you have a handful of assets that are lower, lower productivity. Are those properties that you hold onto just because of your concentration in the market, or are they assets that could make their way to other buyers at some point?

They fit different buckets, but I would say that overall, they could be assets that could be in the conversation to end up in other people’s hands, especially the lowest tier.

Got it. Okay. And then, Tom, just a couple of quick ones. Are there any acquisition costs in the first quarter? Tom O’Hern: There is a acquisition costs on Green Acres that is factored in the guidance, Mike.

Okay. And about how much is that? Tom O’Hern: It’s going to be approximately $2 million. And as I mentioned, we had about $2.5 million range in the first quarter related to Kings Plaza.

Is that in G&A? Tom O’Hern: That’s in shopping center expense that follows the assessment.

Got it. Okay. And then just last question. Just, what is the assumption on the transactional items for ‘13, if you think of like lease term or outparcel gains? Tom O’Hern: The least term is always the touch one to predict. We work on the light side on our assumption at $7.5 million, which is roughly where we ran this year. Over the last five or six years, we average $12 million but the assumption is in at $7.5 million for next year.

And I don’t think we -- we have nothing in for outparcel sales, do we? Tom O’Hern: No. See in our portfolio, Michael, I know that it runs through certain other folks’ numbers but that’s not something. You rarely see that come through our numbers, and a lot of it because we have predominantly urban centers that don’t have excess land to be sold.

Okay. Great. Thank you.

Thanks, Mike.

And next we’ll go to Quentin Velleley from Citi.

Hi, there. I will thank you guys for the disclosure as well. That’s the most fun that we’ve had at 6.30 AM in the morning for a long time. Just in terms of your bullishness on Arizona, does that bring the Goodyear development project potentially back onto the agenda?

It’s certainly something we’ll be heavily focused on this year. The department stores are telling us that they’ve got it in their sights. Retailers are warming up to idea. So we will be making a decision I think as the year progresses. I wouldn’t be shocked as we move into the latter part of this year if we were to make an announcement that we are going to go forward. It’s about a 33-months timeline from announcement to grand opening. So we are not making that announcement yet, but I wouldn’t be shock if we were to make it later in 2013.

Okay. And just going back to the…

You just have to remember just when you look at the market that when you look at the market, there are 700,000 people in the Goodyear trade area that do not have a regional mall to go to and it is the only place on the 10 freeway between Phoenix and Los Angeles that has -- the center wants to be built in the next 10 to 20 years. So it’s by far the most underserved portion of the market in Phoenix. You could argue that the southeastern portion is fairly well over served. But certainly the western portion of the market is extremely underserved. So, I mean it’s not a question of whether. It’s just a question of when.

Okay. Just in terms of the 2014 potential asset sales, is the demand or the level of interest sort of equivalent across all of those assets in terms of quality or productivity? Or is it sort of fair to say that there’s less interest in those lower-productivity, lower-quality assets in that pool?

Yeah. I mean, everybody wants to play the optic game, especially the public companies that are bidding. They just want to do high sales per foot and that’s what they are focused on. So with its low sales per footing -- if it’s got a great opportunity to make money, if it doesn’t meet the optics that they think that people want to hear then they don’t think they are supposed to do it. The private equity guys, I think are a little bit more intuitive about that and they are more value-oriented. And so their interest tends to be broader across the spectrum. We didn’t know which assets would be interesting through which teams. So again, when we put 14 assets out there, really wasn’t ours and we didn’t expect all 14 to go. And we certainly expect anyone person to come in and bid on all 14. But they are in different regions. There are different geographic concentrations and we find the real mix of bids. We have one group that bid on six and another group bid on five of them. The other group bid on four of them and another group like more than eight of them and it’s interesting. The overlap is not necessarily exact. Some people wanted just the only game in town, some people wanted high sales per foot and some people wanted bigger markets. It is an interesting mix. So we didn’t want to decide for them. We just said, look, this is what we are willing to expose. We exposed it. I would say that they’ve done a tremendous amount of work because we have indicated to them that we are not just putting our tow in the water, we are real about this. And that we are willing to take…

Perfect. Thank you.

And next, we’ll go to Alex Goldfarb with Sandler O’Neill. Alex Goldfarb - Sandler O’Neill: Hey, good morning out there.

Good morning, Alex. Alex Goldfarb - Sandler O’Neill: I guess I will join the crew. It was exciting to use Quentin’s term. It was exciting to see the return of the disclosure. Before I get to that, just two other questions. First, Art, to your comments on Prop 13, what do you think the impact would be to your tenants if suddenly they had to bear market rate property taxes? I mean, there’s no free lunch, so it may be a pass-through from your perspective. But clearly, the tenants have to be able to absorb it. What do you think the impact would be on them?

Yeah. So, I may have been talking rapidly but it would increase their occupancy costs by about 90 basis points from 13.3% occupancy cost as a percentage of sales to 14.2%. Alex Goldfarb - Sandler O’Neill: Okay. So from a sales productivity and a margin perspective, you would expect that probably the vast majority of the tenants will be able to bear that.

Yeah. I mean it’s about five bucks a foot my guess is what it would be because centers are averaging 500 bucks. I’m using very round numbers. 90 basis points is four and a half bucks. It’s about five bucks a foot in typical term. Alex Goldfarb - Sandler O’Neill: Okay. Okay. Then that’s helpful. Next…

And then the other thing, just when you think about it is that, look at Chicago, Chicago and Cook County, the big regional malls, they have taxes 26, 30, 35 bucks a foot. And yet those are great regional malls in Chicago are very well occupied. And you’re still getting decent rents. And what happens if the retailers interested, they accepted it’s a fact of life in places like Chicago, Minneapolis anywhere where they fund their entire budget from real estate taxes or they fund their school districts like in Iowa from real estate taxes. The real estate taxes can be quite high. But if you want to be -- if you are tenant and you want to be in Chicago and you want to service the Chicago market, you’ll expect the fact that taxes are high. And then you go there anyway. If that were to happen in California, I don’t think people are going to say, I want to do business in San Francisco. I don’t want to do business in Los Angeles. And in the meantime, their burden might be going from whatever, six bucks a foot to eleven bucks a foot. It’s still unbalanced, not that bad compared to other places. You did not expect it to happen, but it’s a very legitimate question. Look, the first thing that I thought other than what Phil Mickelson thought when they pass Prop 30, and increased our personal income taxes retroactively while they are making after Prop 13. And we met with the Governor’s office and they were very involve with the California Business Properties Association, which is the strongest lobbying group you and we’d be super hard for them to come after. Proper team walking, it’s in the drinking water in California. But even they did, I wanted to tell you. I don’t want to be a political progress indicator. I want to tell you what the impact would be if it happened. Alex Goldfarb - Sandler O’Neill: Yeah. I appreciate that.

For the large amount of income we have here. Alex Goldfarb - Sandler O’Neill: Yeah. I appreciate it. I mean, KIMCO mentioned a number of years ago when they bought the PNP and everything reset then the market fell out that some of the tenants suffered because they have the twin effect of taxes going up and then their sales going down. That’s why I was just curious. Second question is, Tom…

That makes sense. In that business if you are buying the strip centers at a low cap rate, you are dealing with tenants that are -- you are taking their occupancy costs from 10 bucks to 20 bucks a foot, that could hurt. Alex Goldfarb - Sandler O’Neill: Okay.

In a mall, if they are going from 55 to 60, it’s more manageable. Alex Goldfarb - Sandler O’Neill: Okay. That’s help. Tom, the preferred market -- a number of folks this quarter have been commenting about the attractiveness of pricing. Given that preferreds aren’t tied to the corporate, there is no default ability or whatever, would that be a market that you would look at to access for additional capital? Tom O’Hern: We keep an eye on that market, Alex. It was pretty heated up in the fourth quarter, cooled off a little bit. The calendar got kind of crowded whatever, but we keep an eye on it. I mean, it is still likely in the low 6% range, which is kind of pricey compared to the long-term financing we are getting. But we keep an eye on it. It’s not overly appealing but we do keep an eye on it. Alex Goldfarb - Sandler O’Neill: Okay. That’s great. Listen, thank you. Tom O’Hern: Thanks.

Thank you.

Our next question will come from Paul Morgan with Morgan Stanley.

Hi. Good morning.

Good morning.

I usually don’t like to pile onto these, but I think this is worth it. I really do appreciate going back to the disclosure on the sales and the NOI as well. And just kind of looking at that, I mean, if I look at some of the malls that have shown the biggest kind of compound sales growth in this window here, at least, some of them maybe because they fell a lot during the housing bust. But some of them may also signal opportunities for expansion. And I am wondering whether you might look at it that way, things like Washington Square or Los Cerritos or Corte Madera, which are up double-digit on a compound rate over this period -- are there more opportunities there? You’ve mentioned what you have got it your pipeline now, but do you look at things that way?

Yeah. There is a huge opportunity at Washington Square. We own excess land there that we are debating about how to handle it. Sears owns a very large building there. I think close to 250,000 to 300,000 square feet. I’m not going to predict if that’s going to come back to us, but if it did there’s a huge amount of FAR development opportunities and a huge number of tenants who would want to be there. We have -- at Cerritos, we have a huge development opportunity that we are not really talking much about right now because we’re pinning down exactly what it’s going to be. But we -- a year or two ago, we relocated Nordstrom from a older building to a new building and now we have that whole lane that we are deciding what to do with and again, a huge Sears store there. That’s clearly in the expansion horizon. If you look just at our top 10 centers, there’s something going on in each and every one of them. We are talking about a new anchor at Biltmore Fashion Square and or in expansion there at Corte Madera. Nordstrom is affectively tearing down their store, expanding it and we are looking at a modest expansion there that is going to have a dramatic impact. And I think Corte Madera fits that profile, Bobby of centers that, even though sales were on fire there we have been moving tenants around in preparation for bringing in some new more highly productive tenants that hurts the income. Tysons Corner, you know the story there. North Bridge, I have talked about, Santa Monica place, you’ve heard me talked about that. Cerritos is huge. Kings Plaza, we think that’s a fabulous opportunity. Tucson, we are talking to a specialty department store about the possibility of coming there. I mean, the list goes on. Broadway Plaza, we talked about that. Kierland Commons, there is an opportunity to add a significant anchor retailer there. As I’m going to list of the top 20, we’ve got an expansion plan that I could talk about in detail about everyone of them.

And so, then, kind of summing that all up, as you think about what your maybe aggregate or annual development CapEx over the next three to five years would be, do you have a rough number on…

I’m not really ready to revise that number. I mean, as we identify the opportunity, we will put the number out there. I did just mention that clearly Tysons is a full green light on all aspects of the developments. So we are moving forward there. We are finishing up Chicago. Niagara, it’s roughly $75 million to $80 million of expansion, double-digit returns there. As we and Broadway Plaza I mentioned a number on that today on the call, $220 million. Our half is one-tenth. Santa Monica place, it’s hard to know what the number is. It could be $25 million give or take. It could be $50 million including some other land that we might get involved within the city, but it would show a very nice return. So, we will work on identifying that pipeline. But I’ll preferred, I’ll just keep the tangible ones in front of us, the ones that are going to be opening in the next 18 months to two years. But there’s clearly opportunities and then there’s been speculation about obviously one or two anchors maybe going at a different direction and virtually every center that’s certainly are your best centers, virtually every center we would have a very interesting plan if that space were to come back at us. And it’s hard for me to update that pipeline for you. But it’s something we will be clearly working on over the next three months to six months.

Okay. And then just, lastly, you mentioned the 50 to 75 basis point hit to same-store NOI this year. As you look into 2014 -- I mean, a lot of this stuff is still going to be going on, then. Is it also roughly that same number below a baseline, or will we start to see this improvement? Or is really the improvement, the acceleration relative to what is coming out now more kind of ‘15?

In terms of that which we are taking out of service or having frictional vacancy on in ‘13, you’ll have tenants and they are paying rent in ‘14 in lots of these cases, which will probably result above average same-center growth in 2014.

Great. Thanks.

Thank you.

And our next question will come from Todd Thomas from KeyBanc Capital Markets.

Hi. Thank you. I’m on with Jordan Sattler as well.

Good morning.

Good morning.

Just following upon the asset sales to the extent that some of the buyers don’t comment or you’re not getting the pricing or really seeing the demand that you would like for the assets on the market. Is it joint venture of available option or is that off the table given your plan to try to avoid joint ventures at this point?

It’s clearly an option. And one of the options would be there is money sources that are out there that really want to invest in this category. Let’s go ahead that the mall category. The big issue usually is finding the right operator. If we would agree and our strategy usually is to build a little bit of a platform with idea of ultimately five to seven years out selling it or creating a new platform that will be a new operating entity whether it would be public or private. If we were to say through that to different sovereign groups that are out there, we’d love to pursue some like this that look would be an operator. But there is going to be an access strategy because this is not an asset class that we want to own forever and hang in there for five to seven years. There is many numbers of folks who would want to pursue that with us. But I think a cleaner approach for us would be a simplification and a reduction of head count and a pure recycling of capital, time will tell. That’s clearly something we could consider. We have not gone down that path because we have enough strong interest from the providers that will take out 100% ownership.

Okay. And then just wanted to clarify on follow to the last question about the same-store growth rate on sort of a more normalized basis. Are you employing that without some of this activity in the portfolio, the expansion or redevelopments which -- inevitably there will always be sound every year that the same store growth rate of the portfolio today would be around 4%?

I can speak year-by-year. And for 2013, I would say it would be closer to for. I think it’s possible we could hit fully this year. We gave guidance at the range that we gave it at, but we know that we have some of these best centers that are in here actually have income decreases and you say why do you have those income decreases. And the answer is always either frictional vacancy where, if you take it at 10 as 10,000 for tenant. And you’re not allowing them do renew the Queen centre and they are paying you 2,000 bucks of foot that’s $2 million a year the year you displacing and if you get six to nine months of down time, even if you’re replacing the new guy 3,000 bucks of foot it’s expensive. So your best centers, when you recycling tenants like Santa Monica Place, Tysons Corner, Queens, Washington Square, centers of that nature. Frictional vacancy really affects short-term results but doesn’t effect value creation. Value creation is huge. So I guess someone on the answer say that same-center NOI is also, on the optics side, a little to dimensional because it doesn’t take into account the value creation that income from being patient on same-centre NOI like for example not chasing occupancy as heard as you possibly can because you’re holding the rate, that can reduce the same-centre NOI. Look, it’s a goal of ours too. It’s probably our one number internal goal to aggressively manage and do better and better job at same-centre NOI growth. Because on a risk adjusted reward basis, grow in your income by an extra 1% a year. You make a lot more money than even building a new centre. So that’s our priority but there is in explanation for kind of the numbers. It’s heard to say what the number is, going to be, every year for the next five years but we were very bullish on our sales support very good rental growth and the things that we’re doing at centers are them for positioning them for strong growth.

Okay. That’s helpful. And then just, lastly, just a quick question on the new disclosures, which we appreciate as well. Should we expect to see this level of disclosure each quarter going forward at this point?

I don’t know. We will have to think about that maybe I don’t know. I would still -- Tom’s nodding yes. You could tell. I haven’t even talked about.

All right. Great. Thank you.

Thank you.

And next we’ll go to Ben Yang from Evercore Partners.

Yeah. Hi. Good morning. Thanks. Maybe, I have another question on the asset sales. I think you mentioned that you do not -- you don’t think you will end up selling all 17 malls that you are trying to sell. I’m sorry if I missed this, but does that $1 billion sales guidance assume you do sell all 17 malls this year?

No, it will be a lot more than that if we do.

Okay. So if you ended up selling all 17, it’s actually less than $1 billion in total value for those malls?

If we sold all 17 that would be way over $1 billion.

Okay.

$1 billion, in all depends on which malls they are, but $1 billion could be comprised of six or seven of them or -- there’s some-centre in there with 1 numbers and some centers that are in there that are worth 10 times that numbers so.

Okay.

There is a range.

Okay. Fair enough. And then, so it looks like you are not going to sell all 17 this year. And I am curious -- what’s the time frame for completing the reverse 1031 on these assets, just to get that tax benefit on the exchange?

We’ve already done pretty much everything that we need to do so we’re in good shape on that.

Okay. So there’s no urgency to sell in the next 18 months or so? You can, kind of, wait it out if you don’t get the price and the buyers is not quite there?

We’re taking care of the tax side that we -- look, it’s a disruptive the process to expose that many properties. So we are highly motivated to bring it to a head quickly and to either kind of get on or get off with the different folks that we’re working with. So that this is -- the noise of this is not persistent. So our expectation would be anybody that’s going of do a deal with us. If there would to say, say they wanted to close later than midyear, they had better have a very good reason. So in that’s why we gave midyear guidance, but we think that’s probably about when, on average, things will happen. So it’s coming to hit. It’s an awkward time to talking about it, given that we’re picking different routes right now. But obviously it’s something that we need to put in to our numbers given that is something that’s going to happen this year.

Okay. Great. Thank you.

Thank you.

And next well go to Tayo Okusanya from Jefferies.

Yeah. Good afternoon. Thanks for taking my call. First of all, congrats on a great quarter and, again, thanks also for the additional disclosure. I just want to talk about two particular assets, Santa Monica Place -- I believe last quarter, there had been some conversations about some potential changes in the tenant mix on the second floor and also the restaurant bankruptcy that happened. Could you just talk a little bit about the progress on those initiatives?

Sure. Well under way in the idea of recycling of first generation tenants into second generation tenants on the second floor, for example, we recycle sketchers out and brought in three people which is in more appropriate tenant. And there -- my guess is on that second level there will be significant recycling on the second level over the next couple of years where some of the more moderate-priced juniors would be replaced by other tenants. That we think will be more appropriate for the center. We had good occupancy gains on the first level. We had a -- we just recently opened an Emporio Armani store. Bobby, do you want to give some color on that. Bobby Perlmutter will add some color on that please.

What I would say is from a general description, what you’ll see at Santa Monica Place is the ground floor will continue to get deeper and its luxury presentations, that’s been an over performer to date at the centre. So Emporio Armani recently opened. Kate Spade recently signed a lease. So we’re going to bring additional luxury into the ground floor and improve the luxury mix away have there. The second floor, we’ll migrate more towards a traditional better mall tenant mix. Some of those as I mentioned like a free people but some of those tenants are currently located in the market on Third Street Promenade that we think are more appropriate for our customer base and our anchors and our tenant mix. So we will work to relocate them. Certain of those traditional better regional mall tenants are not in the market, so we’ll bring them into Santa Monica. And then last piece as was mentioned earlier, we have a large commitment to restaurants and food on the third floor. We want to augment that with an additional entertainment anchor. And I think to your specific question we did sign a lease with Redwood Grill, who is going to soon start construction on the third floor on the vacant restaurant space.

And they will be opening up midyear. There are restaurant operation out of Toronto that actually our partners’ Cadillac Fairview introduced to us and they wanted to be here for long time. This was a restaurant that recently went out of business is the Japanese sushi restaurant, Ozumo, and that’s right next door to the third level of Bloomingdale’s, where we would hope to put the new theater. So we got folks that would be interested there, but at this point in time, we’ve really focus on the anchor on the third level of the Bloomingdale’s and once that happens then we think that the restaurant presentation as supplemented by a first-class theater. We will get very robust and we would be in a good position. So there is the case where you’re essentially holding some space of the market because you know that you’ve strong belief that you have a very good announcement that’s coming and once you make that announcement the list is going to get really long in terms of the players that would want to be up there with the theater. The theater opportunity here in Santa Monica, given the visibility of this community to the people that run Hollywood and the people that work there, the directors, the producers and the actors at Malibu and Bel Air and Santa Monica and West Valley is massive. And it maybe the number one theater underserved quality market in the United States. So we think, its great thing that they do at the centre, and yeah, it will drive the growth. But we know that, between frictional vacancy there and just holding space off the market that the income at Santa Monica Place this year won’t be what it could be, if we just went ahead and leased it anyway. But the value creation of being patient and that’s why I say sometimes same-center quarterly growth can be myopic or two-dimensional. It’s very important that you have to think about value creation as being the primary thing to chase. And sometimes you have to sacrifice same-centre growth for value creation. We think that’s the better choice where appropriate.

That’s helpful. Could we get any similar commentary on your redevelopment effort at Atlas Park?

Not quite as robust but confident.

Atlas Park is obviously a much smaller project in terms of scale. And we made some progress. It’s basically more of a community open air center that we worked the leasing discussions along with Queens and now Kings and Green Acres. So that gives us very strong presence in that market. We recently signed a lease for Forever 21. We’ve made a lot of progresses. It’s primarily going to be some juniors, some convenience and some small-sized boxes within the center. So, I think the summary there is we got a slow start, but we are making a lot of progress at the centre and we’ll see some improvement in terms of the occupancy over the next 12 months.

Helpful. Thank you.

Thanks.

And at this time, we have no further questions in the queue. I’d like to turn the call back over to speakers for any additional or closing remarks.

Thank you very much for joining us and we look forward to speaking with you soon. And thank you. Bye

That does conclude our conference for today. Thank you for your participation. You may now disconnect.