Good day, and welcome to the Macerich Company Fourth Quarter 2019 Earnings Conference Call. Today's conference is being recorded. And now at this time, I would like to turn the conference over to Jean Wood, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining us on our fourth quarter 2019 earnings call. During the course of this call, we will be making certain statements that may be deemed forward-looking within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of risks, uncertainties and other factors. We refer you to today's press release and our SEC filings for a detailed discussion of forward-looking statements. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the earnings release and supplemental filed on Form 8-K with the SEC, which are posted in the Investors section of the company's website at macerich.com. Joining us today are Tom O'Hern, Chief Executive Officer; Scott Kingsmore, Execute Vice President and Chief Financial Officer; and Doug Healey, Executive Vice President, Leasing. With that, I would like to turn the call over to Tom. Tom O’Hern: Thank you, Jean, and thank all of you for joining us today. It was a solid quarter with good operating metrics. Sales per foot were up 10% to $801 per foot. That's our 12th consecutive quarter of sales growth. Occupancy was 94%, up 20 basis points from September 30, but down from 95.4% at the end of 2018. This was primarily due to the 2019 bankruptcies. Average rents were up 3.3%. We continue to experience strong leasing volumes across a wide variety of categories with 2019 leasing activity up nearly 20% compared to the prior year. The leasing in 2019 included a significant amount of leasing to mixed-use in nontraditional retail uses that are or will be bringing heightened consumer traffic to our high-quality town centers. This includes 4 hotel deals, including Caesars Republic at Scottsdale Fashion Square, 5 co-working…

Thank you, Tom. The fourth quarter reflected good financial results matching both company and street expectations. Here are some highlights for the quarter and for the year. FFO for the fourth quarter was $0.98 per share and 2019 FFO was $3.54 per share, both matching consensus per first call. The $0.98 in the fourth quarter represented an $0.11 decline from FFO of $1.09 per share in the fourth quarter of 2018, given primarily the following factors: One, higher leasing expenses of approximately $5 million, driven by the new leasing accounting standard; two, lower lease termination income of $2.6 million; three, higher interest expense of $2.1 million; four, a favorable tax appeal during the fourth quarter of 2018, totaling roughly $3.5 million at one of our New York assets. This ultimately created an unfavorable comp in the fourth quarter of 2019; and then lastly, lost anchor rents from Sears the bankruptcy of $1.5 million in the fourth quarter. Same-center net operating income was flat during the quarter and finished up 0.65% for 2019, which fell within our 0.5 to 1.0 same-center NOI guidance for 2019. As we had mentioned on prior calls, we anticipated growth in the second half of 2019 to be lower than the first half of 2019 as a result of the bankruptcies, including Forever 21, and that was in fact the case. During 2019, the impact of both 2018 and 2019 nonanchor bankruptcies had an approximately 2% dilutive impact on 2019 same-center NOI growth. EBITDA margin showed significant improvement in 2019. The EBITDA margin increased by 90 basis points from 62.7% in 2018 to 63.6% in 2019. This morning, on to guidance, we did provide a detailed 2020 earnings guidance, and we direct you to the company's Form 8-K supplemental financial information for more details about those…

Thanks, Scott. In the fourth quarter, sales remained strong and leasing momentum continued. Portfolio sales ended the fourth quarter at $801 per square foot, which represented a 10.3% increase from $726 per square foot at the end of 2018. Economic sales per square foot, which are weighted based on NOI, were $916 per square foot, and that's up 7.9% from $849 per square foot a year ago. 2019 year-end occupancy was 94%, and that's up 20 basis points from last quarter and down 1.4% from year-end 2018. This is primarily due to 450,000 square feet or 2% of our GLA being rejected and closed through bankruptcies in 2019. Temporary occupancy was 6.3%, and that's unchanged from December 31, 2018. Trailing 12-month leasing spreads were 4.7%, and that's down from 11.1% from year-end 2018. In addition to affecting occupancy, the 450,000 square feet or 2% of our GLA that was rejected and closed through bankruptcy, also put downward pressure on 2019 leasing spreads. So at this point in the business cycle, and as Tom stated, we believe the opportunities to drive occupancy and increase cash flow are more prevalent through leasing velocity and vacancy backfill. Average rent for the portfolio was $61.06 and that's up 3.3% from $59.09 1 year ago. Leasing volumes remained extremely strong throughout 2019. During the fourth quarter, 233 leases were signed for nearly 1 million square feet, bringing the 2019 totals to 938 leases signed for just over 3.5 million square feet. And this represents 18% more leases and 19% more square feet than what was accomplished in 2018. And this excludes Fashion District Philadelphia, which we'll discuss in a moment. We continue to leverage the strength of our powerful portfolio by executing on several key packages of deals. They include 4 deals with Amazon for…

[Operator Instructions] And we will hear first from Craig Schmidt with Bank of America.

I wondered if you could give us expected incremental NOI increase coming from Scottsdale Fashion Square and Fashion District Philadelphia for 2020.

Yes, sure, Craig. This is Scott. Start with FDP, incremental NOI, if I were to look at our pro forma, you can probably triangulate to 4.5%, 5% or so. But again, bear in mind that capitalized interest offsets, right? So as I mentioned in my opening remarks, it's only modestly accretive in 2020, while we anticipate significant accretion in '21, '22 and beyond. Scottsdale Fashion, for the most part, is sitting in our same-center. The expansion space that includes restaurants and fitness is not in our same-center. So that is accretive. I currently don't have a number. It's certainly above our portfolio average given all the leasing activity. I don't have the figure for you offhand though, Craig.

Okay. That's helpful. And then, I guess, I just wondered what is the potential impact if Prop 13 would pass for Macerich? Tom O’Hern: Craig, Prop 13 has been challenged many times in California over the last 30 years or so. Apparently, they've got enough signatures, it's going to be on the ballot, but we know it's not polling well. So for a variety of reasons, we think it's a long shot that, that initiative to turnover Prop 13 or converted to split tax rolls probably will not be successful. But in our case, we structured our leases, almost all of them, as fixed CAM, but we have continued to build property taxes on a triple net basis. So we don't think it's going to have much impact. We realize that, that's going to put some incremental pressure on occupancy cost as a percentage of sales, but we don't think if it were to pass, which again, we think is a long shot, we don't think it would have any immediate impact on FFO or same-center NOI.

And now we'll take a question from Alexander Goldfarb with Piper Sandler.

First question is just, Scott, just going over the same-store pool, I didn't hear you guys talk about Forever 21. So one, just confirming that it's still your prior guidance of $0.08 impact. But two, when you guys go through your same-store guidance this year of 0 -- of 0.5% to 1%, how much is already reflected, not in that number, but how much of the portfolio is already having drag from closings last year? Meaning, are you starting the year off with like 50 basis points of 2019 closings? And then does the 50 basis points -- sorry, does the 100 basis points of bad debt -- sorry, that's what I meant, does the 100 basis points of bad debt, does that already include what you know has closed to date, meaning like Forever 21 and, therefore, there's 100 extra? Or is the 100 already includes stuff that's already closed this year?

Alex, I'll take all those. I'm not sure I can remember all 5, but I'll try and do my best here. 2020 same-center guidance embeds within it, as a result of the 2019 bankruptcies, approximately 200 to 225 basis points reduction of same-center NOI. That includes the general 1% budgeting reserve that I mentioned in my opening remarks. Same-center also includes the impact of Forever 21. I'll just refer back to the comments that we made in the third quarter call as to what the impact there is. We said roughly $0.08 was the impact on an annualized basis and that roughly $0.02 of that would be felt in 2019 and the balance in 2020. All of that will hit same-center. In terms of what is and is not in our same-center pool, Fashion District of Philadelphia hits our same-center pool in the final quarter of the year, Q4. Our Sears boxes are not in our same-center pool. And again, that does have some bearing on the first half because we did receive some rent in the first half of 2018 that we certainly are -- excuse me, first half of 2019 that we're certainly not receiving this year. The expansion area for Scottsdale is not in our same-center pool. And then lastly, One Westside is pretty inconsequential given the fact it was closed pretty much most of 2019, but that is also out of our same-center pool. So hopefully, that answers all your questions.

Yes. And then, Scott, on the 100 basis points of credit reserve for this year. Is any of that already being used? Or is this all incremental, meaning, whatever you may have gotten notices for so far this year, is that in part of that 100 or that's incremental to the 100?

It's incremental, Alex.

Okay. Then the second question is asset sales. Last time you talked about possible, I think, about $80 million of -- I think it was like apartment sale in the fourth quarter, then maybe some additional sales aggregating about $280 million. Didn't hear anything like that, but certainly noticed in your dividend composition from last year, you guys earned $1.35, you had gains of $0.65, but you still maintain the full $3 dividend. So as we think about everything for this year, are we still thinking about asset sales. And for that, you're still planning on keeping the dividend? Or are the asset sales no longer part of the calculus as you think about your 2020? Tom O’Hern: Well, Alex, as we look at 2020, the focus has shifted to selling noncore assets. And in those, we typically don't have the same elevated tax gain or capital gain as we would if we sold one of our top 10 assets or top 20 assets. So to some extent, there were tax considerations in 2019 that don't exist in 2020.

Okay. But you're still going to maintain the same dividend payment despite that it's a pretty good source of capital. And the market sort of pricing -- they're not pricing you on the current dividend, they're pricing on something less than that. Tom O’Hern: Okay. Let me see if I've got this one right. But if you're asking about the dividend, that's a Board action. It's not my decision. So I can't speak for the Board here, but I will tell you that last week, the Board did approve and we declared a dividend of $0.75 per share, which was consistent with prior. And that's a Board decision and if the Board addresses it quarterly before they declare the dividend, then they're aware that there's room of about $1 a share in terms of the nontaxable part of the dividend that could be used if they deem it so appropriate. But to date, the Board has not been interested in making that change, but it's their decision.

You will now hear from Christy McElroy with Citi.

Just to follow-up on Alex's question on asset sales, $300 million, that includes the $82 million for the 50% interest in Vita, which hasn't closed yet. Just in regard to the other $200 plus million, you mentioned the noncore mall under contract and then another noncore asset in negotiation. Do those 3 assets comprise the entire $300 million? Or is there an expectation for others? And is the noncore asset under negotiation a mall or a non-retail asset? Just maybe some color on that. Tom O’Hern: So those 3 will get fairly close to $300 million. And there maybe 1 or 2 other small assets that are noncore for us that may be dispositions this year. And other than the apartment tower at Tysons Corner, the other assets are noncore malls.

And can you give a sense for cap rates on those noncore malls? Tom O’Hern: No. And if I could, I'm not so sure that they would be very relevant because a lot of those assets don't have a lot of EBITDA, but they do, in fact, have some pretty good real estate value and the potential to do other things like multifamily.

And then just in regard to your capitalized interest guidance of $25 million in 2020, I would have thought more of that would have started to be expensed as you delivered Scottsdale and you continued to stabilize Fashion District, how should we be thinking about the moving parts of that number as more of the interest related to those 2 projects are expensed, but is there anything else that's sort of being added to CIP or added to the pipeline beyond what you've listed in the development schedule that would impact that number?

Yes, Christy. Yes, certainly, bear in mind that our projects, all of our Sears boxes are going to be factored in there. We've got a couple of large-format uses that we feel very good about the opportunities on, couple Forever 21 boxes. And those will be in the numbers. One Westside is, obviously, we're throwing hammers, and that's going to be factored in there. Bear in mind, Scottsdale was a multiphase project, and so a lot of that was already placed into service throughout 2019. Certainly, the wing that now features Apple and Industrious was fully in place for all of 2019. So you don't have much of a decline there year-over-year. Fashion District, frankly, is the biggest year-over-year decline. But again, there's continued reinvestment back into the portfolio in our high-quality Sears boxes, One Westside. Like I said, a couple of larger format Forever 21 stores that we are at lease on right now, and we feel very good about.

So those Forever 21 boxes will go into CIP, but they remain in the same-store pool?

Yes, 2 different concepts. We typically carve-out of same-center our major redevelopments. But when it comes to repurposing boxes and spending development capital to the tune of that order of magnitude, GAAP allows that to be considered construction in process that allows you to recognize capitalized interest. So they are really 2 different concepts, Christy.

And Jim Sullivan with BTIG has the next question.

Yes. Scott, thanks for providing that reconciliation in terms of the items that gets you from the same-store guide to a per share number, the midpoint of the per share got $3.45. I just wanted to clarify, because you listed the Sears box, as you said, that was not included in same-center and then you itemized, I think, 1% $0.06 a share for kind of a loss reserve. So when you report the same-store, however, you typically will reflect any credit loss in the same store, is that right or no?

Yes, that's correct. Really, the 1%, Jim, is just budgeted rents that we're carrying a reserve against for potential fallout. We'll continue to assess that throughout the year. That's a bit different than the notion of bad debt where we're writing off uncollectible receivables. Also inherent within our guidance is a bad debt expense estimate of $7 million, and we provided that on Page 10 of our supplement. So in addition to that, $7 million of uncollectible bad debts, we have an additional 1% of general reserves against potential fallout that we'll monitor as we progress.

And that $7 million number you gave, yes, that was indicated I know on the guidance page. But I guess, it's -- I guess, the issue is between the same-store number and those items. I know lease term is excluded in 1 or 2 of those other items, but I would have thought that the reserve would have been the same. It would already be the 0.5% to 1%. In other words, would be the same as maybe when you start the year with in each case, no, i.e., $0.06 would be incremental?

Well, the $0.06 is -- so maybe -- maybe we're not speaking the same language here. The $0.06 is embedded within our thinking for the 0.5% to 1% same-center NOI guidance. But the -- I think, Alex's question was, is any of that Forever 21, for instance, or other known bankruptcies, inherent within that $0.06 or 100 basis points of general reserves? And the answer is, no. It's all incremental on top of what we know today.

Okay. Now, I understand that.

Exactly.

Okay. Yes, maybe we can follow-up on this off-line, but we're just trying to -- I'm just trying to connect the dots from, obviously, the '19 result, adding some $0.03 to $0.06 of positive contribution from the same-store guide, and then making the adjustments that then take the number back down to $3.45. So we can follow-up online on that or off-line on that. I also want to talk about the refi proceeds. I know in between -- the consolidated assets between 4Q maturities and 1Q maturity, you've got about almost $600 million of maturities. And you had talked, I think, in your prepared comments, about financing on Danbury and Green Acres and another mall. And I think you mentioned something like $400 million in proceeds. So I guess, the question is Fashion Outlets of Niagara, what are you anticipating there at this point to the extent you're comfortable talking about it? And number two, on Danbury Fair and Green Acres, are you anticipating excess proceeds to the maturity or no?

Yes, we are. Danbury Fair is a 10-year maturity. And given continued investment and progress and value creation at that asset over the course of a 10-year period, there's certainly the opportunity to extract extra value out of that one. And we do anticipate excess proceeds. Green Acres is very much the same way, even though we've only owned the asset for about 7 years. I recall we did build a very substantial power center adjacent to the project. And frankly, the performance of Green Acres mall is well beyond our expectations. And I do think there is the opportunity to extract excess proceeds. The third asset I mentioned, not by name, but I did describe it as unencumbered. And so I do feel very good that, that asset, which performs extremely well, will result in some excess proceeds. I think the last question you asked was Fashion Outlets of Niagara. We're still evaluating that one. It's very possible at this time, we may unencumber that one, but we'll be reporting back on that one over the course of the year.

Now we'll take a question from Todd Thomas with KeyBanc Capital Markets.

Just first follow-up on the same-store forecast. Scott, I think you commented that Fashion Outlets of Philadelphia comes into the pool in the fourth quarter. Things like that could have an impact on the full year forecast. And just given the ramp you're expecting to experience in occupancy, and I presume rental income, what's the impact that Philly has on the full year same-store growth forecast?

Sure, Todd. Well, given the fact that it's only 1 quarter, it's not going to be a massive impact. What I can say, though, is as we look into 2021, Philadelphia will certainly be a major contributor as well as lot of these larger boxes that are going to be coming online. One of the consequences of getting this real estate back, leasing it up, prepping the space for tenant delivery and, ultimately, building out the store, is it takes about 18 to 24 months for that income to come to fruition and actually to get those tenants to open and operating. We are looking at -- towards the end of this year and the beginning of '21, having a significant inventory of that space coming online, which is the figure that Doug mentioned earlier. So we do feel good about the contributions in '21. Circling back specifically to your question, though, the '20 contribution from Philadelphia in the fourth quarter, there certainly is one, but it's not very significant in light of -- it's a single asset for 1 quarter.

Okay, got it. And then, Doug, I apologize if I missed this, but I think temp and short-term leasing contributed to about 640 basis points of occupancy last quarter. Can you share where that was at year-end? And can you comment on how you expect that to trend throughout the year? Tom O’Hern: Yes, Todd, this is Tom. I think the number at year-end was 6.3%, so pretty consistent with the third quarter. And I think that was flat with last year, but there's a pretty strong initiative here to convert temporary space to permanent space because there's a significant pickup in rent between a temp tenant and a perm tenant. So that's going to be a big push this year.

Okay. Can you quantify that a little bit? Do you have a sense for where rents are for that bucket? How much of a lift do you see on average when earning short-term leases to permanent? Tom O’Hern: It's usually a 50% pickup in rent when you convert. And the goal of this year would be to knock that down by 75 or 100 basis points to take it closer to 5% from 6.3%, it's at today. And we've got a team of people that specifically focuses on converting temps to perm.

Okay, got it. And just one last question also on leasing. You discussed some of the leasing activity in '19, the progress that you've made on the 2020 expirations. Can you just comment specifically on the leasing spreads in the quarter in the consolidated portfolio. They sort of -- they came in sharply this quarter. I was just curious if you can discuss what that's attributable to?

Yes, it's Doug. So it all really depends on the property and the market. In our top-tier centers, as we look to execute on the 2020 business, we're executing at positive decent spreads. However, in some of our lower tier centers, it may be more of an occupancy play. Obviously, when we're working to drive occupancy, it does come at the expense of rate, which affects spreads, but I wouldn't say that's the case in the majority of our properties.

Now we'll move to a question from Steve Sakwa with Evercore ISI.

I guess, first, there was an article yesterday about Intelsat filing for bankruptcy. And I know that's a large office tenant you've got in Tysons. Any just sort of commentary you can provide around that tenant, space needs and how you think that might play out? Tom O’Hern: Well, they were one of our original tenants, Steve. And around the time they went public was about the time we opened Tysons Tower 5 or 6 years ago. And they've been an anchor tenant there with, I think, 3 or 4 floors. That being said, that market is pretty strong today. We're actually considering doing more office there. And we don't think it would be too difficult if it came to that. We don't believe it will, but if it did come to the situation where they did file and we had to make some decisions, there's a much stronger office market today than there was when we originally did that deal. And we, in all likelihood, would get a rent pickup as a result of taking that rent to market if it comes our way.

But there's nothing baked into the 0.5% to 1% for any kind of dislocation or disruption from that. Is that correct? Tom O’Hern: That's correct.

Okay. Secondly, can you just, broad picture, give us -- maybe I missed it, kind of the funding needs that you have for developments, redevelopments in '20, '21 and '22? Tom O’Hern: Yes, on average, Steve, we're going to be $250 million to $300 million, and that's about what we were this year. And Scott went through the refinancing liquidity that we generated, and that was roughly $550 million. So there was liquidity well in excess of our capital needs generated this year. On top of what may come out of the financing pipeline, we're also deep in either contract or negotiations to sell some noncore assets, which will generate some additional liquidity. And we very well could continue that game plan as we move forward into 2021 and beyond. It's long been a goal of ours to sell our noncore assets if we can do it cost effectively and without a big earnings impact. So that's an avenue we're going to continue to pursue in terms of generating liquidity to cover our very accretive redevelopments.

Okay. And then just maybe one for Scott, just in terms of how you think about assets going in, going out of the same-store pool. I guess Fashion District of Philadelphia is obviously still ramping and really doesn't even stabilize until -- it sounds like it's in the 80% range and gets into the 90s, even a year from now. But it sounds like that's going into the pool in the fourth quarter of '20, although it's not really stabilized yet. I just -- is it just a strict definition of 13 months and the asset goes in? Or is there something a little bit more specific as to how you think about that or the new wing in Scottsdale when that gets added?

Yes, you're pretty much spot on, get 4 full quarters, and then it gets into the same-center pool. The fourth quarter of this year happens to be the anniversary for Fashion District. Let me just expand a little bit on the occupancy because the stats can be a bit deceiving. We do anticipate occupancy, as I mentioned, roughly 80% by year-end 2020. But bear in mind that there are 3 major spaces at that property that happened to be unique that are carrying into '21. Primark, we expect to be a spring '21 delivery. It's roughly 50,000 square feet, 2 levels on market. It's going to be a great flagship anchor for us. In addition, there's 2 destination spaces on the east side of the project. And collectively with Primark, that's nearing 15% of the space. So it's a bit deceiving when I say 80%, but the core of the mall is certainly going to be more occupied than that, but there just happened to be 3 distinct spaces that are going to trickle into '21 that are going to drive some significant financial results in '21 and beyond.

Now we'll hear from Linda Tsai with Jefferies.

Could you tell us how much Intelsat was paying in terms of rent since that is included in your credit loss, if I heard that correctly? Tom O’Hern: Linda, we don't provide specifics on how much each tenant pays. It would be very detrimental to the leasing negotiations in a lot of cases. We don't provide those specifics.

Okay. And then since you sold the multifamily at Tysons, would you consider selling the office at some point? Tom O’Hern: Certainly. I mean when we built those, it was our stated intention that we didn't necessarily plan to build them and hold them forever, but as long as we own them and could control the development and how they were oriented towards the 2 million square foot powerhouse mall, we were going to do that and that's been done. The transit station has been built there and both assets are doing quite well. And that has actually turned that location, that entrance to the mall, into the number one location. But we do have an open mind going forward, and that could possibly be a candidate to be sold along with our other noncore dispositions.

And then can you discuss what drove your decision not to JV 1 or 2 of your top 20 assets? And what it would take for you to revisit that concept? Tom O’Hern: Well, I'm sure this is no surprise to you, but today, retail real estate, particularly mall real estate, is out of favor with institutional investors. Even the very high-quality assets including the 2 or 3 that we exposed to the market, there's just not strong demand right now. We like those assets. We're glad to hang on to 100% of them. They are core assets for us. And we will generate liquidity through selling noncore assets, as I mentioned.

And then just one last one. What's driving the lower occupancy cost ratio on your unconsolidated centers? It looks like you ended the year at 10.8%. And then last year, it was 11.5%. And in 2017, it was 12.7%. Is there kind of a target ratio you'd like to achieve? And just what's driving that? Tom O’Hern: Well, I mean, you've got a lot of factors. Sales have been up. In some cases, you've got some bankrupt tenants that had a high-occupancy cost as a percentage of sales that are coming out of the equation, so that's pulling that number down. And I suspect that's the biggest reason for the drop versus the prior year.

Next question comes from Michael Mueller with JP Morgan.

You talked about the temp to permanent leasing goals, but where do you see the overall 94% occupancy level going by year-end '20?

It's Doug. I think between our temp to perm efforts and our focus in 2020 in leasing the vacant space that we've gotten back to us, I think we could see our occupancy increased by 100 basis points, from 94% to 95%.

Now we'll take a question from Jeremy Metz with BMO Capital Markets.

Sorry if I missed this, but I just want to go back to the asset sales. The $300 million, it was a net number, assume that those include some debt that's going to go away, making the gross proceeds higher. So maybe you can just quantify the gross expectations there? And then just to be clear, it sounds like those will be outright sales as opposed to any sort of JV, is that right? Tom O’Hern: In all likelihood, they will be outright sales. There's a couple of possibilities where it may stay in for a small JV interest, and all those assets that we're considering in this group of noncore dispositions are unencumbered.

All right. Helpful. And then just in terms of the percentage rent, you had pretty good uplift in 2019. I guess, there's 2 parts in that. First, as part of that lift you saw just being driven by converting some tenants to percentage rent, and that's helping kind of push it higher. And then I guess, second is just how we should think about that here for 2020? Obviously, I think there's a desire to convert that to base rent, but maybe that's on the market on the cards. Any color there?

Yes, sure, Jeremy. I don't think conversion to percent of sales deals is what's driving that. It is a positive sales environment. Positive sales doesn't necessarily translate to each and every tenant. But we do have some tenants that have surpassed their breakpoints that I can't mention properties or tenants specifically, but that's what kind of drove the result uniquely. Percentage rent as a whole really has not been impactful to our entire rent structure. So I don't think that's going to be a significant driver. It's certainly nothing we point to, to say that's something we can do to drive 1% same-center growth by any means. But it's not a -- or it's not a function of converting to grow skills.

And now we'll take a question from Haendel St. Juste from Mizuho.

So I guess, thanks for the color on the planned refinancing activity for this year, the $400 million of incremental liquidity you outlined. But that is new debt after all and your debt EBITDA sits here around 9x. So I guess my question is, as you consider the 2020 outlook today, the development NOI coming online and the refinancing activity planned this year, I guess I'm curious when we could start to see that EBITDA figure improved? Where do you think that will be by year-end and perhaps year-end '21? Tom O’Hern: Yes. So there's obviously 2 sides of that equation. And the debt that's being incurred with the refis and also the additional EBITDA that's coming online from assets like Fashion District Philadelphia, Scottsdale Fashion Square as well as the Sears projects. And then I think we're really going to see that start to decline as we accelerate same-center NOI. Going forward into 2020, we certainly expect that to be a stronger year for same-center growth than this year when we're still absorbing some of the bankrupt space. So we think that's going to come down gradually naturally. And I think there's actually a chart in our investor deck, which I don't have memorized, but if you take a look at that, I think you'll see what our expectation is for debt-to-EBITDA going forward.

I do recall that chart, but if I recall correctly, I think that chart did not include a Forever 21 bankruptcy or some form of the challenges that they see now to get more updated perspective. But I do appreciate those thoughts. And what is the unencumbered NOI today or as of the fourth quarter for the portfolio?

Unencumbered NOI, I'd tag it roughly 15% to 20%.

Okay. And then lastly, Corte Madera, looking at your top 20 malls, looks like sales per square foot are up across the board with the exception of Corte Madera, your #2 mall. Sales per square foot there looked to be down 10% year-over-year and 15% from last quarter. Can you discuss what's going on there? What that's attributable to? Is that a temporary blip? Or is there something more meaningful we should be aware of? Tom O’Hern: Yes. Corte Madera, we had a couple of tenants that are moving around, just as part of some redevelopment activity. And I think that's really what's driving that. We have some high-octane tenants that are experiencing some temporary downtime as they relocate that happen to shift out of the sales pool and they'll be back into the sales force. So I think that's a temporary disruption in the figure.

Okay. That's something that you think is 2021 of that perhaps to get -- see the sales migrate back to where they were? Or is it going to take a bit more time? Tom O’Hern: Yes, I would think so, Haendel.

And that's all the time we have for questions. I will turn the call back to Tom for closing remarks. Tom O’Hern: Thank you, Jake. And thank you, everyone, for joining us today. We look forward to seeing you and speaking with many of you over the coming months.

With that, ladies and gentlemen, this does conclude your conference for today. We do thank you for your participation, and you may now disconnect.