Good afternoon, ladies and gentlemen and thank you for standing by. Welcome to the Macerich Company First Quarter 2008 Earnings Conference Call. Today's conference 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 and I would now like to turn the conference over to Suzanne Karpick, Vice President of Investor Relations. Please go ahead.

Thank you everyone for joining us today on our first quarter 2008 earnings call. If you don't have a copy of our earnings release you may access it at the company's website www.macerich.com. 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 filings. Management will also be discussing certain non-GAAP financial measures as defined by SEC Regulation G. The reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is included in the press release and supplemental 8-K filings for the quarter which is posted in the investing section of the company's website. Joining me today are Art Coppola, President and CEO; Tom O'Hern, Executive VP and CFO; and Tony Grossi, Executive VP and COO. With that, I would like to turn the call over to Tom.

Thank you Suzanne. We will be discussing the first quarter results, recent capital transactions, status of our developments and redevelopments, upcoming opportunities and our outlook for the balance of 2008. Focusing on the operating metrics, generally they remain strong in the second, in the quarter, with continued high occupancy levels, strong releasing spreads but with some softening in retail sales during the quarter. Total mall sales per square foot for the past 12 months came in at 468 that was up 3% from the same statistics a year ago and down slightly from the year end number of 471. Total same center tenant sales for the period were down 1.1% and looking at that by a region, Southern California was down 2.1; Northern California down 1%; the Eastern region was up 4.2%; Central region up 1.5% and Arizona down 5.4%. Occupancy levels have remained high with quarter end occupancy at 92.7% that compared to 92.8% a year ago, on a same center basis occupancy was at 92.5%, down from 93.0% a year ago. Leasing activity continue to be robust in terms of both volumes and spreads, we signed leases for mall shops 336,000 square feet, new rent came in at 44.71 per square foot, positive releasing spread of 24.3%, that's on a cash basis, excluding any straight line of rent impact which would have increased that spread. Average rent per square foot in the portfolio was up almost 5.6%, to 40.36, compared to 38.22 at 3/31/07. The FFO for the quarter was up 13%, compared to the first quarter of last year. That put FFO diluted per share at $1.09 for the quarter, compared to $0.96 for the quarter end March 31st of '07. That was a $0.01 less than the mid point of our guidance and a couple of…

Thank you Tom. And welcome to our call. Our first quarter started off with a bang with the acquisition of North Bridge Center in Chicago. We talked about that in the last call. So I am not going in to the detail on that but it's a great center. We are already seeing strong leasing demand on some of the releasing that we planned at the center again this is the center anchored by Nordstrom, the second highest Nordstrom volume center. Nordstrom store in the U.S. gives us probably 5 of the top 10 Nordstrom stores in the U.S. by sales volume are in our portfolio now. And it is a center which is $839 per square foot adds to those premium centers that we have that exceed over $700 a square foot. As Tom went through, we had a great quarter in terms of fundamentals in spite of an obvious tough economic times and in spite of the fact that from my view point that we are in a recession. Our first quarter leasing spreads at 24% remember compared to 28% in 2007, 19% in '06, 20% in 2005, and between 20 and 25% in 2002 through 2004. So this remains a very consistent trend. Our leasing for the year is virtually complete. We are already working on 2009 releasing. Our occupancy levels remain very solid during the quarter; this is consistent with our history over the 17 years that we've been reporting occupancy levels and is really a function of the quality of the real estate that we have highly productive centers in locations with extremely high barriers to entry. Our redevelopments are coming on terrifically. The Oaks is scheduled to open with the major enclosed malls redevelopment opening up and being completely re-merchandised by fall of this…

Thank you. [Operator Instructions]. We'll go first to Lou Taylor with Deutsche Bank.

Thanks. Good morning guys.

Hi Lou.

Tom, can you talk a little bit about the Wilmorite gain in terms of was there any economic gain there from the transaction?

No, Lewis. It's purely an accounting gain and results from some very complex accounting rules. But its non-cash, non-economic.

Okay. And I know there was a little bit in terms of share price differential between what it was in January 1 or what was in April of '05, did that influence your share count or anything along those lines?

No, no change is share count.

All right and then next question just pertains to kind of the financing discussions you've had, I know you've got life companies, you got new relationship banks. Are there any other newer sources coming into the discussion whether it be future CMBS lending or is it really just the two main sources right now. Is it broadening out at all?

Well, we haven't seen it broaden out yet Lou, it stands a reason that it probably will. It doesn't appear to have much CMBS activity but in this point I think there may have been one deal that got done, but we've seen a pretty strong appetite from our bank groups and in the life companies we've been able to line-up attractive financings. So we haven't really had to seek alternative sources, but I think there are probably some starting to surface.

Okay. Then last question with regard to the kind of items that slipped from Q1 that you expect to receive... I am sorry, slipped from Q1 to Q2. What were those items, lease term fees, land sales, what were...

Well, all of those... when we go into the year those two areas are really just a guess in terms of timing and they tend to flow unpredictably through the year, but we looked at our assumptions for both way and sales and lease termination payments and we're comfortable with those. We expect to see some pick up in 2Q that we didn't get in the first quarter.

Great. Thank you.

Excellent.

Thanks Lou.

We'll go next to Paul Morgan with FBR. Paul Morgan - Friedman, Billings, Ramsey & Co.: Good morning.

Hey Paul. Paul Morgan - Friedman, Billings, Ramsey & Co.: Where are you at now in terms of the percentage of your rents that are on CPI leases?

We're at about 55% now, Paul and virtually every lease that gets signed these days has that feature in there. Paul Morgan - Friedman, Billings, Ramsey & Co.: So how do you kind of done the math to see where... what the contribution of the CPI bumps is to your same store NOI?

Well I think these reset January 1st of every year and I think on average the CPI rates that was used was at about a 2.4% rate. So if you apply that to roughly half the portfolio, that's 1.2% or so of that 3.5%. And obviously we're looking forward to getting our whole portfolio on CPI, so we get the full benefit of that. Paul Morgan - Friedman, Billings, Ramsey & Co.: Okay, great. Could you comment on the plans for the Mervyn's portfolio in light of reports the about Mervyn's financing issues?

Sure. We're receiving significant demand in interest from third party owners of centers where we now own in Mervyn's building. If you remember the Mervyn's transaction was purely... was a real estate price transaction. It does show a nice return for us, but the price at which we allocated to the portfolio and to the individual assets were prices that not to wish anybody ill will, but prices that we would be extremely happy to take over the real estate and in fact that if you just look at our portfolio alone, if we were able to recapture all 11 stores from Mervyn's, the profit that we could make from that alone would have paid through the entire acquisition of all 40 stores. So, it's very much is a real estate deal that enjoys a good return in the meantime. Paul Morgan - Friedman, Billings, Ramsey & Co.: Are you making any efforts to proactively recapture some of the face now or is it basically just kind of the... you got the lease for the duration and see what happens?

No. We did recapture one space and that was in Mesa, Colorado. But the stores that we brought are all stores that Mervyn's is showing up four wall profit on, but they are doing a good business in. And they are not interested in getting in even that. So, we should try and which is certainly... it was in our game plan. But these are all stores that Mervyn's is happy with and considers to be long term keepers for Mervyn's. Paul Morgan - Friedman, Billings, Ramsey & Co.: Okay. Now I have a question on the sales and any implications per percentage rents. I mean I know you don't have great visibility. It is going to be depending on sales. But the year-over-year number was down a 1 million. How should we think about kind of a full year percentage rent if the comps kind of persist like we're seeing in the first quarter?

In terms of percentage rent, Paul. That was an expected rotation from percentage rent into minimum rent which happens when leases roll and it also happens in certain cases, the new developments where tenants go from percentage rental and they starting to pay minimum rent. So far we haven't seen anything that's changed our view and our guidance for the year. We still think we're going to be in that 3.5% to 4% same center growth. And it is hard to draw any conclusions from changes in percentage rent. Because, quite often it really is a function of rotating from percentage into base much more so than in the actual sales activity. We've got less than 6% or 7% of our tenants that actually pay percentage rent. So, we're not real sensitive to quarter-to- quarter fluctuations there. Paul Morgan - Friedman, Billings, Ramsey & Co.: Okay, thanks.

Thanks Paul.

We are going to David Toti with Lehman Brothers.

Hi everybody. Just a couple of questions with regard to your pipeline. Have you changed any of your yield assumptions or timing assumptions around some of the projects, I know it's not visible on the schedule but just wondering what your perception is there?

Theyield assumption everything is still online and on target in terms of the deals where we're actually are doing re-leasing and then on the timing assumptions they really reflected in just comparing the current 8-K versus the previous 8-K and to a great extent it's really just better and clearly disclosure that you have credence and recognition to the fact that on an open-air center in particular the open-air regional that we open. They tend to open in phases as compared to all at once.

Okay and then any change in to the temperature of the pre-leasing environment?

Our pre leasing environment on mall pre-releasing remains extremely strong because of the product that we are offering to people. I think in general if you take a look at pre-leasing today the big box anchored center its weaker than it was six months ago clearly and we're to great extent taking that in to consideration and being prudent in terms of the openings that we're looking at in particular at Prasada.

Okay and then just relative to potential pull back on you shadow development pipeline. Does that impact any of the prior numbers that you have put out relative to investment spending over the next three years?

No because none of those members that... we've never talked to you about any of those numbers to-date, so these are really the opportunities that we're working on that would really have a begun to talk about in terms of quantifying with you at this point. It's really just... I bring that up in the context of recognizing that in a capital constrained environment how do you manage your company in an environment like that and one other thing that we do is an environment like that we really go back and rescrutinize everything that's in our pipeline for the very high standard and high bar in terms of performance for the development to get capital allocations to it and its really just a prioritization that we do in times like this to recognize the preciousness of the commodity or capital.

Great. Thank you very much.

Thank you.

We go next to Christy Mcelroy with Banc of America.

Hey good afternoon. Tom, other than the key one shortfall to be made up in Q2 have your quarterly guidance assumptions changed for the back half of the year. I think you previously talked about 24% in Q3 and 32% in Q4?

No those haven't changed. As we have mentioned we've got a lot of seasonality that comes through in the fourth quarter that's really a bulk of the percentage recognized that's also where we get a disproportionate share of our temporary tenant revenue activity comes in that fourth quarter somewhere we still expecting that this year.

Okay. And then just a follow up on the pre-leasing question. What percentage pre-leased as your ground of development pipeline currently and then with regard to Art I think you touched on the malls but then with regards to the power centers have you found a incrementally tougher to lease up this space given some of the pull backs and expansion plans and start closings among the big box retailers?

Yes on the power centers there is clearly been some pull back and I think that's you know that's great extent what I mentioned before that is the reason for being a little prudent. We can decide when we want to deliver those power centers and so to... on some of them we will face them and some of them we will move them back a little bit in particular Prasada. On the mall pre-leasing the only one that they ground up opportunity that we are in the pre leasing process of right now, is the Estrella Falls and that is at a very high level of pre-leasing activity and doing extremely well. We've given ourselves plenty of time in terms of the opening of the center, but we anticipate that that center will easily be well over 90%, leased at opening without any question. We've got virtually every retailer that joined us at SanTan and Gilbert wants to have a store with the Estrella Falls in Goodyear. So I am very confident on that. That is center that at one point we were going to open up in 2009 and just to give ourselves a little bit more cushion to make sure that in this environment that we could open up very high percentage of our retail is all at once. We moved this to 2010 and it could be as pre-leased as we would choose it to be at this point in time but it's in very good shape that way.

Okay, so you are kind of holding back on some of the commitments there hoping that the environment improves over the next year or two?

No, we are not holding back, we're leasing that in the ordinary course of business and it's coming along very well.

Then what kind yields are you projecting in your power center development project, specifically?

Generally on the power centers, we anticipate yields of 9% to 11% on cost.

Thank you very much.

Thank you.

We go next to Jay Habermann with Goldman Sachs.

Hey, good morning, here with Tom Boban [ph] as well.

Hey Jay.

How are you?

Good.

Question on, Art you mentioned same store occupancy, I think down 50 basis points year-over-year, any surprises in there, I guess by geography or is that pretty much what we've been reading about in the papers?

Tony here Jay. No there is no consequence to that occupancy ties any retail fall out, if you really want to look at our bankruptcy picture, we've got about 150,000 square feet of storage in formal bankruptcy, its not 80 stores with us. We've dealt with over 60% of that right now and a big part of it is Disney wasn't really an economic driven bankruptcy, and our store closing, we have a great handle on that as part of pour normal course of business, we are not surprised or alarmed that what's been reported to us in the media and the voluntary closures, really its minimal and the largest impact being pack, sign and demo stores and we had a virtually no impact to Talbot's men's or baby, it nearly has one store with them, so that activity is very manageable. So I can't say that the direct tie to that 50 basis points differential in our occupancy.

And you mentioned the comfort with a sort of 3.5% to 4% NOI growth this year is that really a function of just the 90% leasing you've done year-to-date of these expiries?

Yeah it's largely driven by that, I mean we've got pretty good visibility into deals that are in the process right now and it's a function of what we've got rolling obviously very good releasing spreads and that was evidenced by the deals that were signed in the first quarter and we expect that to continue through the year.

Okay and just following on that are you also mentioned sort of recapturing space in some of your top malls. Can you just give us some examples there and is this really pushing out weaker retailers are they month to month or you haven't actually go in sort of proactively buy them out.

Generally you don't have to buy them out but I wanted... its something that may sound incongruence to most people that why would a landlord in a recessionary environment seek to get an early termination of a lease, while the reason you do it is because in times like this if you have an unproductive tenant, I mean just... so, I mean if you got a tenant within $700 square foot center and tenants doing $300 a square foot then one or two things have to happen. The tenant has to get smaller or get out. Now, in better times, the tenant maybe able to limp along and survive an environment like that. But in tougher times it could be an opportunity where we can work together with the tenants. Many times we just entered into an option agreement with them as opposed to a buy-out where we say look, we know times are tough for you, give us with the option to early terminate your lease and when we find a replacement centre to replace you, we'll let you off of your lease. And a lot of tenants are happy to do that for us, so it's really just something that I wanted to bring up that... it relates to the subject of how do you manage your business during a recession and during a recession there are opportunities that may not otherwise occur to people and that's a big opportunity.

Okay. And for Tom that 2.5 million run rate in lease term fees, is that a good number for the rest of the year or do you expect that to pick-up in Q2?

I think our assumptions for the year, I don't have it in front of me, Jay is 10 million for the year.

And I think Tom has one question.

It will pick-up.

Hey guys just a quick question on the acquisitions front, one of your competitors recently put an asset on the market in the Stanford Connecticut area, just curious what your thoughts are with regard to that particular asset and if its something you would consider performing due-diligence on in the future?

Well, we don't really comment on acquisitions until they're complete. So I really... I don't have a comment on that.

Okay and thanks a lot guys.

Thank you.

Thank you.

We'll go next to Michael Bilerman with Citi.

Hi this is Ambika Goel with Michael. You mentioned that some of the luxury tenants are slowing down their expansion plans, how does that impact your redevelopment program?

Tony, do you want to go that?

Hi, this Tony. The level of quality that we had in terms of our redevelopment of Santa Monica Place or Scottsdale fashion that's anchored by a Barney's. The luxury retailers today is globally minded. They don't have a choice necessarily of cities but they have choice amongst countries. So, our quality that we're introducing in Scottsdale and Santa Monica Place ranks really up there in terms of the global quality. These are truly global locations and they attract the attention of that luxury player that typically in any year they really open between three and five locations. They are very, very choosy and we're quite happy with their level of interest in both those sites.

And I really brought that up in the context frankly of the fact that you may not have really seen it so much yet but over the next six months you're going to begin to see anecdotal evidence from the luxury retailers, that is consistent with all retailers where they're beginning to see cut back a little bit on their expansion plans. But I bring that up in the context that even though that's going to hit... that noise is going to hit the press, it's not impacting the leasing that we're doing at our luxury centers.

Okay, great. And then on the occupancy, on comp occupancy. In the fourth quarter, you had mentioned that you got back a fair amount of space at Biltmore and that bankruptcies remain low so far. So I guess could we assume that occupancy, comp occupancy would start to be trending in a positive year-over-year or should we assume like the same negative comp throughout the year?

You're referencing Biltmore only, Ambika?

Just, asset similar to Biltmore where you took back space.

Yes, well in Biltmore we're remerchandising and we walk in together with a lot of folks around this call and you saw the work that we're putting forward there and so, work in progress and there is a lot of deals opening up later this fall in that site. As it relates to bankruptcies, I spoke about the 150,000 square feet, half of it has been dealt with... some of that will come at us in Q3 and Q4. As we work through some of these negotiations, as some of the smaller ones, some of the smaller bankruptcies really today are still trying to figure out what they want to do. But it's not going to be significant.

So, then on comp occupancy, what do you expect? Down 50 basis points year-over-year?

It's too tough to tell because we... I'm not sure how these smaller bankruptcies are going to through.

And there are so many small Items that can affect occupancy. Until you see 2 or 3 or 400 basis point movement, to me there has not been that much change and we've never seen that kind of a movement in our occupancy levels. We've reported occupancy levels over a 17-year period and if occupancies change 50 to 100 bases plus or minus per year, that would be a lot. 93% give or take, 94% occupancy levels, that's kind of like in a macroeconomic environment, that's kind of like full employment, given the frictional vacancies and slippages on occupancies that you have from time to time. So, that's a very-very solid, solid number that we've been able to put up in great times and recessionary times.

Okay, great. Thank you.

Thank you.

We'll go next to Michael Mueller with JP Morgan.

Hi. I know the power centers aren't that big part of the business but going back there for a second. I'm curious, how close was demand, was it close enough to the point where if you wanted to move forward with the centers, you could or there was just too wide of the gap and so, the only choice was to push them off?

We are not really pushing them off. We are really phasing them more than anything and so, I don't want to overstate that but I do want to recognize that if there was a weakness in... if there is a weakness in demand for new space in the retail world today it is in the big box arena, can't deny that, it is true. The big box development that we do is as you know it's always a precursor to a mall. And so, the fact that we may... that we would decide to only open up virtually 100% occupied levels and then phase the future development is really just an exercise of judgment and prudence and not any broader statement than that. And certainly I wouldn't use the word pull back or anything like that. It's really just building to the demand.

Okay.And then similarly looking up at the Oaks where a portion of that was pushed off. Was it push off or is that just the disclosure of the phasing?

That was just improving disclosure. We found again the 8-K pipeline report has been a long time coming. Our first one was three months ago and we found that the protocol we were using was that we were basically using the grand opening date even though it may have been phased some of the openings and we'd began to look at it, oh, wait a minute for the analytical community in order for them to better model their numbers, they really need to see when the dollars are coming into place and so, in particular on the open air centers like Estrella Falls and/or The Oaks expansion. It's not at all a typical for that to open it up in phases. So we are just trying to give you better visibility and transparency into the pipeline, so that you can do your financial models.

Got you and last question. Looking at the 2010 components, it's about 270 million, is there a room for that number to grow or is that a pretty good number for this point?

That number could grow.

Okay.

Yes.

Okay. Thank you.

Absolutely, absolutely. Thank you.

We'll go next to Rich Moore with RBC Capital Markets.

Hello, guys. Curious for your thoughts on your equity needs are for the next 18 months, let's say and how you might go about meeting those, I mean would it be primarily dispositions or are you thinking about joint ventures or the public markets. I mean, how do you view that?

Rich, I don't think we've got any equity need. As I walk through the various financings that we're in midst of, we will get our line of credit down below 800 million or so which gives us quite a bit of capacity and in most of these projects that we're talking about we're seeing decent yields 9%, 10%, 11%. Obviously they are going to be valued at a much lower cap rate when they are done for this kind of built in equity there. So I see no need to do anything on the equity front. We are having no real difficulty financing our ground up development as evidence by a couple of the recent project loans that we've put on the power centers, so I see no need for that any time soon.

Okay. Have you guys had any discussions or a thought about potentially joint venturing some of your existing assets or is that not really of too much interest to you?

Well there has been huge amount of interest from our... both our existing partner base which we enjoy great partners with people like the Alaska Permanent Fund and Cadillac Fairview and Northwestern Mutual, people like that and other Walton Street. But we've got great current partner base that would love to do more with us but generally we've really been doing partnership deals really more on new acquisitions as opposed to... of an existing asset but to the extent that we would want to bring partners into existing assets, there is a huge amount of pin up demand both from our existing partner base and from other people that would like to be partners with us.

Okay, very good, thank you, and then what day did Tom did North Bridge close. Was that January 10?

I believe that's right Rich.

Okay, good. Alright, thanks guys.

Thank you.

A follow-up question, Michael Bilerman with Citi.

I just wanted to come back to the Mervyn's stores, for the 31 sites you are holding, sort of held for sale that are not in your centers, I think you'd spoke previously last call about $250 million of value that you describe to those, where are those rents if Mervyn's was not a tenant?

Well, in some cases, from my view point if the buildings were to be re-leased as is, we were confident when we looked at it, the demands that we are attributed to the Mervyn's building could it be replaced with another tenant if the building was to be released as is or demised. The really big opportunity is in the regional malls where Mervyn's has locations, we are most likely in our case for example, and I know in many, many of the other regional malls in which we now own Mervyn's stores. The landlord would undoubtedly use the opportunity of getting Mervyn's back to recapture FAR. So they wouldn't be trying to lease out a big box, a big box type of rents, that be cutting up that FAR into smaller pieces and instead of running it out $8 or $10 a foot renting it out even though they would be rebuilding. So that's the really big opportunity in the regional mall location is the recapture of FAR.

And are you actively marketing any of these sites today in terms of just having met with brokers and --

We are in the process of actively marketing about a dozen of them in the next month or so. We've also had active conversations with several of the counterparty owners of centers of which we now own Mervyn's and several of them have shown a significant amount of interest.

And you have this is not a master lease situation you have individual leases on each site?

Yeah, individual leases on each type but we have the full faith in credit Mervyn's overall.

Okay thank you.

Okay thank you

And having no further questions, I'd like to turn the conference over to Art Coppola for any additional or closing comments.

Okay well, again we appreciate your being with us. We feel we are in very, very good position here in terms of our balance sheet. We think that's extremely important it today's environment we feel that we're in very good position in terms of the way we're managing the company. Through this recession we've got a lot of experience in doing it, I feel very good about not only our redevelopment pipeline the new development pipeline as well as opportunities that we have planed for the future that are not even in our current 8-K pipeline. We are going to be prudent and we're going to be balanced and we're going to use judgment in terms of how we allocate capital to new developments that are not currently underway, but all of the developments that are listed in our 8-K right now that are all solid on track on target and that we're very bullish and optimistic about that. So look forward to seeing many of you in the next couple of weeks either at the shopping center show or at NAREIT in New York. So again thank you very much for joining us and look forward to talking to you again soon.

This does conclude today's conference, thank you for your participation. You may now disconnect.