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Macerich (MAC) to Make Athletic Lifestyle Resort in Phoenix

Zacks

Retail REIT Macerich MAC recently joined forces with privately-held comprehensive health and lifestyle company and brand — Life Time — for changing consumer experience at Biltmore Fashion Park in Phoenix, with an athletic lifestyle resort destination. This Biltmore Fashion Park is Arizona's luxury retail destination which already houses reputed retailers and restaurants.

Specifically, a ground-up, 80,000 square-foot resort destination will be opened at this upscale shopping center in the east surface parking lot. It will mark the first Diamond-level location for Life Time in Arizona and the company’s sixth club in the state.

The high-end destination will offer LifeSpa — a full-service salon and spa and LifeCafe — a full-service, fast casual restaurant and bar. It will also have a rooftop pool with bistro, group fitness studios, yoga studios, a Pilates studio, and a basketball court in addition to several other amenities.

These ventures with Life Time come at a point when mall traffic has been shrinking due to a change in shopping patterns, with online shopping taking precedence over in-store purchase. As a result, demand for retail real estate space has been diminishing of late, as the changing patterns are compelling retailers to reconsider their footprint, and eventually opt for store closures or file bankruptcies.

Amid this, mall landlords have decided to go to the mattresses. They are avoiding heavy dependence on apparels and accessories, and transforming their shopping hubs into swanky entertainment zones. The mall landlords are expanding dining options, opening up movie theaters, offering recreational facilities and transforming the former anchor spaces to create complete, resort-like healthy living and entertainment destinations.

Ultimately, the aim is to transform retail shopping centers in such a way that they appear as one-stop destinations, where people can not only shop, live and work, but also entertain, socialize and exercise and even visit their doctor or relax at the spa. These measures are likely to help increase traffic and drive sales.

Shares of Macerich have underperformed the industry it belongs to, in the year so far. This Zacks Rank #3 (Hold) company’s shares have dropped 8.5%, while the industry recorded growth of 10.5% during this time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



Better-ranked stocks in the REIT space include Franklin Street Properties FSP, Columbia Property Trust CXP and MedEquities Realty Trust MRT. All three carry a Zacks Rank of 2 (Buy).

Franklin Street Properties’ Zacks Consensus Estimates for 2017 FFO per share remained unchanged at $1.05 over the past month. Its share price has ascended 7.6% in three months’ time.

Columbia Property Trust’s FFO per share estimates for the current year have moved up 2.7% to $1.15 in a month’s time. Its shares have gained 4.7% over the past three months.

MedEquities Realty’s FFO per share estimates for 2017 increased 0.9% to $1.12 over the past month. Its shares have gained 3.5% in a month’s time.

Note: All EPS numbers presented in this report represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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