The Macerich Company (MAC) Earnings Call Transcript & Summary

Let's get started here. Welcome to the Macerich Roundtable. Jack, I'll turn it over to you. Maybe you can make some introductions, the team up here. And I think you've got some opening remarks.

I have some prepared remarks. So good afternoon. It's a pleasure to be here. My name is Jack Hsieh, I'm the CEO of Macerich. I brought to my right, Doug Healey, our Senior EVP, Head of Leasing. On my left is Dan Swanstrom, our Senior EVP and CFO. I've got Brad Miller at the end, SVP, Head of our Portfolio Management Effort. Ironically, when we were here a year ago, I had just started last year at the company, we were focusing on beginning to outline what we could accomplish on our Path Forward plan. Today, I'm proud to report that we're either ahead of schedule or on track on all components of the plan and have significantly derisked the plan. This pace and confidence in achieving our remaining goals for a projected mid-2026 inflection point have enabled us to pursue new growth opportunities such as the acquisition of Crabtree Mall in June. Recall that our Path Forward strategy is built on simplifying the business, operational performance improvement and leverage reduction. We're solving for strengthening the balance sheet, fortifying our core portfolio, driving operational excellence and positioning us for growth. In May, we provided an update to our Path Forward plan, which included a comprehensive NOI bridge. This update also provided a road map for 2028 target FFO ranges and a path to our target 2028 leverage ranges. We also provided an update on the composition of our go-forward portfolio. Driving operational performance improvement begins and ends with leasing. Recall that we are targeting an average of 4 million square feet of leasing in 2025 and 2026. Through the end of the second quarter, we've already signed 4.3 million square feet, which is ahead of schedule on leasing volume and on target for our market rent assumptions used in the 5-year plan. I think by now, we're all familiar with our leasing speedometer and our signed not open or snow pipeline. These metrics best track our progress on driving a higher percentage of new lease deals versus renewals, which in turn drive higher spreads and incremental revenue to achieve our NOI targets. The Macerich leasing speedometer tracks revenue completion percentage for all new leasing activity in the 5-year plan and drives every leasing and capital allocation decision at our properties. Our initial goal on new deals was 50% progress by mid-2025 and 70% by year-end 2025. By hitting that goal, it will put us on track for 85% completion target by mid-2026, which would effectively complete the new leasing goal outlined in our plan. That also puts us on track for our ultimate opportunity to achieve the $130 million in cumulative snow potential. For new deal lease completion, we are at 66% today, and we have a large pipeline of LOIs, which puts us on pace to exceed our 70% year-end target. The snow pipeline has grown to $87 million when we reported Q2 earnings in August. That also puts us on track to exceed our snow pipeline target of $100 million by year-end. We're also making substantial progress in executing on planned dispositions as part of our Path Forward plan to improve the balance sheet and refine the composition of our portfolio. To date, we have completed approximately $1.2 billion of mall sales, which include the recent sale of Lakewood and Valley Mall 3 weeks ago. What we have remaining for mall sales are several additional Eddy assets for sale or loan givebacks we've identified over the next 1 to 2 years, increasing the total dispositions to $1.4 billion to $1.5 billion. The remaining $500 million to $600 million of dispositions in our plan represent the sale of outparcels, freestanding retail, non-enclosed mall assets and land. I'm pleased to report that we currently have approximately $120 million sold or under contract against our 2025 target of $100 million to $150 million. I mentioned Crabtree earlier. I'd like to close on that acquisition as it speaks to how much we have derisked execution of the plan and how positive we are on Class A malls in general. We acquired Crabtree Mall, a market-dominant Class A retail center totaling 1.3 million square feet in the Raleigh-Durham MSA for approximately $290 million. It's accretive to the Path Forward Plans 2028 target FFO range. It's a powerful entry point to one of the top Southeastern U.S. markets and it holds a dominant market position in a high-growth market with the top retailers in the country identifying it as either the #1 or #2 must-have location within the Raleigh-Durham MSA. We're excited about this mall as we have the perfect opportunity to deploy our operating leasing and marketing platform to reinvigorate leasing momentum, drive permanent occupancy closer to 90% by 2028 and capture the embedded NOI growth upside potential. Retailers are now elated that we own and manage the mall, and we've seen that reflected in the inbound indications of interest and negotiations already underway. We believe there are more opportunities out there to use the platform we've created with our Path Forward plan and our rigorous process to work with leading retailers eager to find the best malls to reach their consumers. In closing, I feel very good about where we are on the Path Forward plan and with the addition of Crabtree to our go-forward portfolio. I'm pleased that we're ahead of plan on leasing, on track with asset sales and dispositions and have a clear road map for hitting our deleveraging targets. Our team is working well together, executing nicely on the key components of the path forward plan and properly incentivized and aligned on shareholder value creation. I'll turn it over to you.

Great. Thanks, Jack, for that. I mean you're certainly well ahead of leasing when you compare it to your plan, you're certainly well ahead of leasing when you compare it to last year in both the sort of the number of deals and the square footage. Talk to kind of the changes that you've implemented, right, getting to that sort of progress. And I know you've talked really about technology enhancements in the portfolio driving the leasing capital allocation. Does it -- so what changes have you made as you've come to Macer that is sort of driving this leasing machine here?

I think what we're doing is very unique as it relates to being a mall landlord. It started with COVID, right? Macerich, before I joined the company last year was not positioned well going into COVID, obviously, from a balance sheet standpoint. It had to do a very large equity offering to kind of rightsize the balance sheet, so it didn't have to pursue other more toxic options, I would say. So what happened between that time and before I started was the company was basically kind of on an annual basis, trying to just kind of stay ahead of kind of quarterly earnings and guidance. The mall portfolio was generally pretty well leased, but we had over 30 vacant anchor locations within our centers. So I see like the first change that I think which is why we're seeing the success coming in was come up with a game plan on what are the assets that we need to own, first and foremost. What is the culture that we want our company to be. One of the principal ones is empowerment. I think this was a very top talent controlled kind of organization over the last decade -- number of decades. If you were to look at why we're doing what we're doing today, we have a leasing team, an asset management team, a property management team, legal team. The team is just going above and beyond historically what this company has performed in terms of these leasing targets. And so I think on the one hand, we're leasing really good space in really good centers where tenants want to be in. We're making capital decisions to kind of support that leasing, which is driving those spreads. We have a host of technology tools that we put in place and process tools that enable this company to communicate really efficiently, especially as it relates to tenants and leasing. The other thing that a big change was the empowerment of our asset management team. If you were to ask me, who is the owner of these assets? Who is the owner representative at Macerich before I got here, it wasn't really clear to me. So I said, look, asset management team, you guys are the owner. You guys are coming up with these 5-year budgets. You're going to hold the organization accountable to them. You're going to hold the organization to capital allocation, look at point-to-point IRRs, decide on whether we should sell or buy. And that [ candidly ] frees up leasing to basically green light and do what they need to do versus having indifference within the company. So I'd say it's a combination of very specific strategy, empowering our asset management team to kind of be the owners of these assets that are going to be accountable for these 5-year plans. We had a great leasing team. So they always knew how to lease. We just didn't give them the direction or the latitude to do it. And so I think that's why you're seeing us succeed in this way right now.

I guess, Doug, turning over to you. I mean, what are you seeing on the ground as it relates to the consumer? Clearly, they've been impacted with inflation. Retailers have been impacted from tariffs. I'm sure you're in deal review meetings, like what are things that come up and what are concerns from your retailers?

Well, there's definitely a lot of things going on between politically, the tariffs and other things in the macroeconomic environment. But so far, and I think I've said this on several calls, so far, we've seen no correlation with retailer demand. In fact, I think you alluded to it earlier, we have already signed as many deals in 2024 year-to-date than we signed in all of 2025 -- I'm sorry, '25 compared to '24. That's kind of what we've done in the past. What's more forward-looking is we have an executive leasing committee every other week that approves deals and those deals go to lease, they go -- they get fully executed, they go into our snow pipeline. We've already reviewed more deals in that committee this year, year-to-date this year than we did in all of 2024. And that's much more forward-looking in my opinion. So we're not seeing any slowdown at all at this point.

And just to put it into perspective here, when you think about '26 expirations, how much of that have been addressed versus where you were, let's say, last year?

Brad, do you have that exact number? I know we're ahead of where we -- we're ahead of where we're basically done with 2025, and we're ahead of where we were at this point for 2026.

'26.

And then talk to us about the Forever 21 space, right? I mean, clearly, square footage, but they didn't pay a lot of rent. So where are you kind of on those sort of, let's call it, under commitment? Where is it under LOI? Talk to us about those discussions that you're having.

So you're right. We had about 570,000 square feet with Forever 21 that we got back. That's a lot of square footage, but you're 100% right. They did not pay a lot of rent. And we kind of -- we foresaw this. We knew this was going to happen. So we've been actively leasing the space way before they filed bankruptcy, way before they closed stores. We're about 67% committed right now in terms of fully executed leases and leases out with another 18% in LOI. So we're trading paper on about 85% of the vacant square footage. And if there is a silver lining, in this filing and this liquidation, it's allowing us to take out what was a nonrelevant retailer, not paying a lot of rent and putting in tenants that are really relevant and will pay rent. If you think about replacing a Forever 21 with a flagship Zara or a Dick's House of Sport or a Uniqlo or a flagship Foot Locker, not only are you replacing with a better brand, but now you replace an anchor in what was probably a dead wing because Forever 21 wasn't doing the business with tenants that are going to drive traffic into that area, and that traffic is going to parlay into better leasing and more rent.

And then what's sort of the rent growth you'll see in these types of -- I mean, obviously, there's a capital commitment part you have to think about, right? So maybe on a net effective basis, what would be sort of the rent growth in that?

Yes. I mean on the Forever 21 spaces, we expect to double the rent, right, that we were getting from Forever 21 across...

2 to 2.5x the rent Forever 21 is paying.

And Doug, just to add on the 26 expiries, we had -- as of when we reported about a month ago, we had commitments on almost 30% of our expiring square footage and another 45% in the LOI stage. So pretty far along. And to Doug's point, certainly ahead of pace compared to last year.

And in terms of categories, as we think about retailer categories that are active as we're looking for -- as they're looking for space, maybe talk about that for the audience here.

It's interesting. We're seeing -- we're still seeing unprecedented demand almost across all categories. Luxury -- I'm sorry, legacy for sure, digitally native and emerging brands, international brands, think about Zara, think about Aritzia, think about Uniqlo. Food and beverage, for sure, grocery, medical, entertainment, health and wellness, I mean, there's demand from all of these categories, which is really exciting to me, and I think very intriguing is we always talk about some of these sexy emerging brands, whether it's Alo Yoga or Ferity or Brandy Melville, and they're great. We need to have them in our shopping centers. But we're starting to see some of these legacy brands really reinvent themselves. For example, The Gap, Old Navy, they've been irrelevant for a long time. They are extremely relevant right now. We've seen it with Abercrombie & Fitch and Hollister, Coach, Pacific Sunwear. So while we continue to reach out and accommodate these emerging brands, really good to see the legacy brands who are staple in our properties, reinventing themselves and performing very, very well.

I want to keep the conversation interactive. So if there's any questions, please. Okay. On the balance sheet front, I know you got one sort of remaining maturing loan in November right now. Maybe talk around that. And also, how are you addressing some of the '26 maturities at this point?

Yes. So on '25, we've got one at South Plains. We're currently in discussions there. so stay tuned. We're looking at a potential extension there, but more to come in the coming weeks. We've already attacked a lot of our '26 maturities through asset sales. Examples most recently, Lakewood, 3 weeks ago, we announced we closed on the sale of Lakewood for $332 million. That was probably our second largest maturity. Flatiron, we had paid down the debt on that. So we're proactively attacking the '26 maturities as well through a combination of refinancings, asset sale paydowns and then there's 1 or 2 where we'll have discussions with the lender and kind of see where those play out if it makes sense to get an extension or a potential give back.

In terms of asset sales, maybe update us on that. I know you did South Clark in April, Alice Park sold in July. So remind me.

Yes, Valley Mall, Lakewood.

Yes. So we just closed, as I said, on Lakewood for $332 million. Valley was similarly about 3 weeks ago, that was $22 million. That was an unencumbered asset. So in totality, if you just take a step back when Jack came on the outlined about $2 billion of asset sales as our target. We've incredible progress over the last year. With Valley and Lakewood, we're now at $1.2 billion of mall sales completed. And we've got another $200 million to $300 million where malls that we'll look at over the next 12 months in terms of incremental remaining Eddy dispositions or givebacks. And then really, the last chunk to get to the overall $2 billion target is $500 million to $600 million of outparcels, freestanding retail, non- enclosed malls. And on those, we had at the beginning of the year, provided guidance of $100 million to $150 million of what we thought we could sell in 2025. And as Jack alluded to earlier, we're pleased to report that we're currently at $120 million against that target. So ahead of pace on the disposition targets. And the team is aggressively attacking the '26 outparcel dispositions and lining them up as we speak now.

Maybe on that, just talk about the appetite from buyers for these mall assets, right? It feels like you're making good progress on that side, too. So maybe just kind of what does the transaction market look like? What does pricing look like?

Yes. I mean the financing market is thankfully opened up on sort of what I call what we would call B malls, malls that are performing in the 400 to 600 square foot in sales. They're probably looking at like 14%, 15% debt yields in terms of underwriting. So that's going to kind of put a kind of floor on cap rates for a while as it relates to just financeability of those assets. But I would say the -- there is -- we've seen a good buyer base of malls that we're selling. I know when we were competing for Crabtree, there were a number of private entities that we were competing against. So I would say that the market is starting to begin to function more holistically. And I think what that means is you'll see more malls, some that are special servicing, some that are lender controlled start to come to market. And there's a lot of equity to buy homes for that right now, I'd say, private equity. We've had a lot of success in selling malls within our portfolio into that group. And so it's just -- the buyer has to have his own vision as to what they want to do, like in each -- like Lakewood, we sold that to Pacific Retail. They have an institutional partner that's going to come alongside with them. There is an opportunity to generate return on that asset. It probably looks like a 6-year kind of, in our opinion, kind of back-ended horizon to accomplish that. And in our judgment, I'd rather put that money and put it immediately into a Crabtree that is generating 11% yield and is going to quickly increase based on kind of the things that we do really well. So I would say that the market is getting more functional as opposed to dysfunctional because of financing, equity sources there and now it's just a question of the product, the total addressable market. And I think you will probably start to see more come on in the market in the coming months.

I mean Crabtree feels like it was a very unique opportunity, right? It's like sort of a too good to be true where I mean it generates very high sales productivity. I mean 11% yield. And talk to us how that came about that opportunity for you.

Well, it was owned by a sovereign wealth fund for many, many years. And I think they had -- over that course of time, tried to sell the center. And obviously, they probably may have should have sold it earlier in a different kind of cap rate environment for that type of center. The financeability, I think, the way if someone wanted to get secured financing on that could only go so far and create so much flexibility. And the equity check required for a private buyer, like if we were selling that property, it was unencumbered, you would probably need $100 million to $120 million equity check into that. That's not for everyone, right? So I think size certainly kind of impacted some of the marketability of that asset. And for us, we -- once we saw it, we were kind of all ran to it. And we're happy to own it right now, happy for our shareholders.

And in terms of what you can do there, the opportunity set, what feedback are you getting from retailers from Crabtree. Talk about what is occupancy today? Where can you take it? Talk about that accretion.

The occupancy today is, Brad?

Mid-70s.

Yes. And we expect to take it to 90% by the end of 2028. What I can tell you about the retailers and they were waiting for the right buyer, and we were the right buyer. The previous owner wasn't investing a lot of capital into the property. They weren't investing a lot of capital into the retailers. The retailers wanted to be in that center. They wanted to invest in their stores, but if the landlord wasn't going to do it, then they weren't going to do it. So as Jack said in his prepared comments, they were elated when we bought it. And I'm not going to start naming names, but we have some key retailers that are expiring in the near future who have approached us proactively not only wanting to extend for another 10 years, but also expand, remodel, et cetera. And then those retailers that are not in the market where they might have gone to the competition, they're now looking at us. So it's been very, very well received by the retailer community.

The one topic I want to talk a little bit about was CapEx, right? I mean it feels like you get these boxes back going to require capital requirement. Maybe generally, as we think about the boxes you've gone back, Forever 21, et cetera. And how should we think about CapEx over the next several years in the mall business as a percentage of NOI?

I mean boxes are clearly more challenging. So we have 23 what I call anchors that have either been -- we've already signed deals, we've opened them or underway right now. 6 are under LOI right now. We've got one that we're prospecting. So we're going to target having 30 complete within a pretty short period of time. I mean the different options are sell the box with a little bit of TA or sell the box for a good number, have the tenant build. The other option is we -- if they sign a lease and we provide the capital for the tenant improvement, there's also landlord work associated with it, especially if it's an old Sears box. So there's not a one size fits all. I would tell you that the way I look at it is obviously, I look at the return on capital of just what like a Dick's House of Sport is going to go into a serious location. Kind of depending on the type of deal you structure with them, you're going to get a good rent, you're going to provide a decent amount of TA, and there's probably going to be some landlord work. But that's not the end of the story. And you'll get a decent return, hopefully, mid- to higher single -- mid- to single-digit return on that capital invested. But the real story is what does it do to the wing of that shopping center? Who else can you bring in? Does it drive traffic? Our business is really simple. Go to Tysons Corner, go to Queen Center, go to Scottsdale Fashion. We drive traffic. We drive sales, we drive rent big time, right? If I have a wing that's got a vacant anchor, I don't have that ability to create that tension. I don't have to draw. Someday, we'll start to show you statistics at Chandler. The prior -- the leadership had negotiated a deal with Sheils, pretty much gave the box to Shield Shiels some tenant allowance to get them to open that store. Sheils is going to do north of $120 million in sales. The trade area for Chandler has increased 20% because of Sheils. If you look at the tenancy in that wing, we just approved Alo in that wing to go into that swing in the center, it was virtually unleasable with too much GLA. Now that center is really thriving. So as you all think about the opportunity for Macerich, we are both the band-aid off leasing the way we should be leasing building anchors, that gets us the starting point in 2028. So yes, we'll hit our leverage target. We'll exceed or meet our FFO per share, but that's not the real story. The real story is going to be in 2029, 2030, 2031 renewals when we're starting to really drive traffic and sales. That's where the real power, I think, is in terms of opportunity. Because for a long time, I would say if I were a student of what happened in our portfolio, not a lot of offensive capital went in. So we got picked off by power centers, lifestyle centers. But there will be a time of reckoning when I'm going to be able to go back when I'm fully leased and be much more offensive as it relates to pulling tenants out of lifestyle centers around us. And let's see what happens then, right? So we haven't had that chance because if you think about the mall business, it has been very challenging like you got COVID, you got anchors, you got people not going to centers anymore. Well, reality is traffic in our portfolio year-to-date is up already. So versus the first 6 months of last year. And it's only going to increase with these 30 anchor stores and all of these flagship locations that are being built, which are demand generators when Haidilao opens, when Din Tai Fung opens, when Eataly opens, when Dick's House Sport opens, when Von Maur opens down the line, these will drive Level 99 Tysons, these are going to drive traffic. And if you've studied which you should know Gen Z is a big proponent of customer, the highest, fastest-growing customer foot traffic in our centers. Big spending. That's a big pot of money. They go to malls. What do they want? Well, I can tell you, we're trying to figure it out, right? They want certain tenancy, but as a landlord, what do we need to do today? What do we need to do 5 years from now, 10 years from now because that is going to be the largest segment spending population that will facilitate in our centers. So that's kind of like the newest committee that I've just formed, my Gen Z committee, which I don't qualify, but I'm getting the right people on it.

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Delevering is the most important thing that we can do right now because for some right now at our current leverage level, we're not investable for some. And I think that that's a core objective of the company. When we looked at Crabtree, I looked at 6 other opportunities for Crabtree. And I would just tell you, I offered on one other one, one of those other 6. And Crabtree was one that was the one that we needed to buy for -- as I've sort of mentioned. Will there be other ones? I don't know. We'll continue to look, but they've got a really high bar of what it takes to sold more than bought, so kind of a good feeling as to what we really need. But deleveraging is really critical. We're not going to buy a bunch of stuff and delay our deleveraging plan by any. We're just not going to do that.

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And the other thing about buying a Crabtree is it gives them the ability to maybe look at some of the Steady Eddy. Some of those are unencumbered, I can monetize them. The cap rates now are inflecting pretty close to where I might be able to maybe trade out a slower growing kind of go forward versus a Crabtree, which is a very high same-store NOI kind of property right now in our portfolio.

Jack, when I -- I mean this conversation we're having, it feels like, again, you're well ahead of all your targets. Leasing, S&O. I mean, you've done a good job on the leverage side. I mean this 180 that you put out is out there, but it certainly feels like moving even above that direction. Like help us understand kind of what are the biggest swing factors, right? Like it feels like -- is it asset sales? Like what's driving you not to push that 180 million above?

Yes. Look, and just for everyone's background, I think everybody has seen the Path Forward plan. But in May, we put out our Path Forward plan, which included a detailed look at a comprehensive NOI bridge, targets to key components of 2028 FFO targets and the deleveraging path. As you look at some of the variables on the NOI bridge, obviously, we talked about the asset sales and the timing of those. But from incremental NOI perspective, we've got the pace of NOI growth from the new leasing activity and the SNO pipeline that we've talked about, where we're driving good progress, completion of the major development and other redevelopments, the timing of which and when that comes online, obviously, affects when the NOI is realized. And then on the FFO, we provided key components on the expense side, the largest one being interest expense. We've put our assumptions in there. So obviously, interest rates and the variability of that could be a factor in that plan. But yes, I mean, look, as we've talked here today, we believe we've derisked that plan significantly. We're ahead of plan on leasing, which shows up on the leasing speedometer and the SNO. We had $87 million as of last quarter, driving towards that $100 million goal this year and $130 million ultimate opportunity, and we're on track on the asset sales. So I mean, I think we just put out the version 2.0 a couple of months ago, and this is kind of a multiyear plan.

Okay. We've got a couple of rapid-fire questions. But before that, any final questions?

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I mean the trouble with these cap rates, I think it's really hard to triangulate like we sold Lakewood for a mid-9 cap rate. Now that had a development component to it. I don't think there's like a uniform kind of cap rate price right now. I think some of it is affected by financeability. Some of it is a function of IRRs that people kind of model in. Some of that's based on where you can take NOI, how much capital is involved to get it there. I wouldn't kind of try to suggest that 11% cap rate is the cap rate because like we might show up with 1 at 13 or I might show up with 1 at an 8 and be able to show you defensively why that makes sense. So it's -- they're really -- I know Green Street kind of moderated all their NAVs, but the buyer base right now is basically private equity with operators, now us. Simon bought Brickell in a very unique circumstance, right? So it's -- I think it's a little -- I don't think you could sort of generalize kind of an overall cap rate. I think that, that was very attractive for us as a buyer. I'm very happy with that. Especially if you look at comps on open-air centers that have similar tenancy that are, I don't know, 400 basis points, 500 basis points inside of that. And that is a really defensible investment. That center is going to gain -- regain trade area again and customer traffic.

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I don't know too much about it except that obviously, it's a very strategic asset, high end. They were already a partner in it. So we weren't a partner in Crabtree. I haven't necessarily seen them buy out in the open market. That's not say it wouldn't -- I'm not in their shoes. But for us, we've sold enough assets at this point. We kind of understand the elements that really for us make a really good compelling investment. And so if they -- if it lines up and doesn't derail us from -- or delay us in any way in our leverage kind of goals, we'll certainly try to lean into it.

In terms of FFO, as we think about this year and next year, you sort of troughed in FFO, right? I mean it feels like you're going to inflect. What's the time frame? Do you think...

I mean we've talked about this sort of a lot of these components come around sort of a mid-'26 inflection point. I mean a lot of it is dependent on the timing of asset sales, right, and when those are realized in terms of the bridge. We've talked about all the leasing activity, which kind of gets you to like 85% plus by the mid-2026 time frame. Again, the NOI bridge kind of outlines a lot of this, but you can see the ramp-up in NOI from development coming online that really starts to ramp '26 into '27 and '28. So you can tell in the NOI bridge, we've provided sort of the CAGR over 4 years. It's 5.2%. And we -- based on what we said before, it really ramps in '26 -- the end of '26 into '27 and '28.

Okay. A couple of rapid-fire questions. So number one, when the Fed starts to cut rates, do you expect long-term debt -- long-term yields to decline, stay flat or potentially rise?

Sorry, can you just repeat the first part of that?

Yes. So Fed at this point, will probably likely cut rates, right? So what happens to the 10-year yield? Do you think the decline stays flat or potentially rise?

Flat to down.

Okay. Number two, last year, the majority of companies stated they are ramping up spending on AI initiatives. How would you characterize your plans over the next year? Higher, flat or lower?

It's flat.

Flat. Okay. Number three, this is for the industry. A mall sector, do you believe same-store NOI growth for the A mall sector will be higher, lower or same next year?

It's higher.

Okay. Thank you very much.

Thank you.