Glenn Lyon, Chairman and Chief Executive Officer of Finish Line

Volume 46 | No. 3 | Fourth Quarter 2012 HAPPENINGS INSIDE: Refreshing Change | Union at Biltmore | Meet Eric Salo, Executive Vice President | Strategic Renewable Energy Macerich Happenings | Fourth Quarter 2012

We think creatively, At Macerich, we build our portfolio on the familiar notion plan concretely and that location is key, and is enhanced by our commitment always act strategically to operational excellence and relentless pursuit of strategic – all of which results in improvements that make our properties tremendous places our high-performing for retailers to do business. portfolio that just gets This fall, for instance, we announced our intention to better and better. purchase two well-situated New York properties – Kings – Art Coppola, Plaza in Brooklyn and Green Chairman & CEO

Refreshing Change: Targeted Improvements Enhance Key Properties

Targeted investments are yielding big The Mall at Victor Valley. “Today, very few properties ever get a double dose of department store energy and we want to maximize results across the Macerich portfolio. everyone’s success.”

From a stylish identity update for Paseo Nuevo in Santa Barbara to In some cases, a highly productive department store wants to do a focused mixed-use repositioning for Southridge in Des Moines, even more. This was the opportunity for at The Village the common thread among nine very different properties is that at Corte Madera, an upscale, fashion-focused open-air property in smart improvements are elevating each and every one. Marin County. Nordstrom is now fully redeveloping to add square footage for more brands and merchandise, as well as the signature “No two properties are the same and it’s critical to understand restaurant. The store remains open throughout the expansion the local market before a project starts,” said Randy Brant, process, which is set for completion in 2014. Executive Vice President, Real Estate for Macerich. “Our focus is on increasing popularity with shoppers and productivity for our “We facilitated the entire entitlement process with the Town retailers, which results in smart, targeted investments that drive of Corte Madera to help Nordstrom realize its vision for what performance of our properties.” it wanted this store to be,” said Skip Kuhn, Vice President of Development for Macerich. “At the same time, we were able to Setting the Stage for Department dramatically enhance the presence of the overall center with new Store Growth exterior signage, visible to hundreds of thousands of cars every day on the 101 – an invaluable benefit for all of our retailers.” Recently, The Mall at Victor Valley opened its doors for an expanded jcpenney and will welcome a new Macy’s in spring Signs of the Times 2013. As the dominant shopping center for the attractive High Desert region of Southern , this property is completing High-visibility new signage was one aspect of the important a targeted renovation to upgrade all four exterior entrances and updates just completed at Paseo Nuevo, an open-air retail add high-profile exterior signage. The new entrances include destination in the heart of Santa Barbara’s historical district. For new vestibules for shopper comfort for the variety of high-desert this beautifully situated property, reconnecting with the city’s weather conditions, plus appealing tile accents, added glass and Spanish Mission architecture helped drive a winning combination updated lighting as well as enhanced landscaping. of visual elements including new signage, locally designed outdoor furnishings and statement chandeliers, painted ceilings “We’re rolling out the red carpet for our expanded jcpenney – and on charming archways and more. The reconstructed Center Court new Macy’s – two incredible brands our community is thrilled now includes a new amphitheater, signature fountain and eye- to welcome,” said Liz Hewson, Manager, Property Management, catching new sculpture. Acres Mall on Long Island – For Macerich it was another earlier this month when recently we welcomed an that will add significantly to strong quarter with continued we announced a new Hyatt expanded jcpenney at the Mall our opportunities in the high- improvement of our Regency. In Chicago progress at Victor Valley, which also will density New York City region. fundamentals with occupancy continues on the much- add a brand new Macy’s this At the same time, selling gains, strong sales growth and anticipated Fashion Outlets of spring. We think creatively, non-core assets and making solid releasing spreads. In fact, Chicago, and at The Shops at plan concretely and always the most of the advantageous annual sales per square foot North Bridge, we were pleased act strategically – all of which financial climate has helped increased 9.4% to $511 year to announce the country’s results in our high-performing us do more of what we do over year. second and largest Eataly, sure portfolio that just gets better best: operate attractive fortress to be a major draw for food- and better. properties in great U.S. Relative to our developments focused locals and visitors. markets. underway, our high-profile Best regards, mixed-use expansion at In , we Our high-quality portfolio Tysons Corner center achieved continue to optimize our equates to strong results. another exciting milestone significant presence, most Art Coppola

At Scottsdale Fashion Square, Arizona’s luxury powerhouse, responding to the needs of well-heeled moms who shop with big strollers and carry lots of packages was at the top of the center’s “to-do” list. Here, adding an oversized, state-of-the-art glass elevator is part of a full Palm Court renovation that also includes new escalators – all good to go for the start of the 2012 holiday season.

“As much as we always pay attention to the needs of our shoppers, we also constantly focus on our retailers’ needs,” said Steve Helm, Assistant Vice President, Property Management, Scottsdale Fashion Square. “Adding the elevator required the removal of the Palm Court’s long-standing fountain which had the benefit of greatly improving the visibility and access to a highly sought after retailer, Sur La Table.” Paving the Way for New Retailers

Work at two Macerich centers focused on re-shaping site plans to welcome important new anchors. At Cascade Mall in Burlington, Wash. – just 45 minutes south of the Canadian border – construction began this November on a new, 25,000 square-foot T.J.Maxx, set to open in summer 2013. In an unusual move for this popular retailer of affordable, brand-name and designer fashions for the whole family, this new location will actually be part of the mall itself, with both interior and exterior entrances.

“We redemised some underperforming food court space to make way for T.J.Maxx, which will be a terrific draw for local shoppers as well as the 20 percent of our guests who travel from Canada, often specifically to go shopping,” said Taylor Long, Senior Manager, Property Management, Cascade Mall. New vertical transportation, Palm Court Scottsdale Fashion Square - Scottsdale, AZ Continued on Pg 4 3 Macerich Happenings | Fourth Quarter 2012 Nordstrom under construction Madera, CA Madera - Corte Village at Corte jcpenney grand opening - Victorville, CA The Mall at Victor Valley

Continued From Pg. 3 new fast-casual food destination to its Target wing. Additionally, a new Ulta next to the property’s high-performing Costco will At , what’s new is a major shift in the center’s enhance Lakewood’s already wide-ranging retail mix. appeal thanks to a new Target, which opened in July 2012, as the retailer’s first location in this community. “Target changes up the Mixing it up is also behind the strategic changes now happening shopping patterns for Capitola customers and gives added reasons at Southridge in Des Moines, which will emerge as a unique, for people to make daily trips to the mall,” said Merrie Ann Millar, indoor-outdoor mixed-use destination. This long-established mall Senior Manager, Property Management, Capitola Mall. “This type will better serve its community with more neighborhood retail, of use for an enclosed retail property is becoming more popular big box retail and other non-traditional uses, including a new and creates a ‘one-stop shopping’ experience.” career academy of the Des Moines Area Community College, opening in fall 2013, as well as a major new fashion anchor. Entertaining New Options “Macerich continually assesses the capital priorities of each At , an asset in suburban Los Angeles that’s been property in the portfolio,” said Eric Salo, Executive Vice President, part of the Macerich portfolio for more than 35 years, thinking Macerich. “By also understanding shopper preferences in each creatively about space is attracting some exciting new retailers and community and staying connected to what our retailers need added energy. First, a new Round1 bowling center about to start in order to be successful Macerich makes sure the capital we construction is taking the place of a less productive, second-level ultimately reinvest into the properties creates long-term value for food court. The mall also is adding a new children’s play area and the real estate.”

A More Perfect UNION

The notion that retailers are UNION – an inspired collection of local, “Phoenix has a wealth of smart retail independent retailers gathered under entrepreneurs with strong local better together than they are one roof. followings,” said Mary Boyd-Williams, apart has been the guiding Senior Manager, Leasing for Macerich. With 18 different concepts coming “Our goal in creating UNION was to force behind shopping together in a single, 7,200 square-foot bring this extraordinary boutique energy centers for more than 50 building, UNION – opening 100 percent together in one place as a complement to leased this November – is a shopping the fashion and dining Biltmore Fashion years. experience within a shopping experience. Park already delivers.” In a design that marries industrial chic At Biltmore Fashion Park, Macerich’s to softer elements of warm, reclaimed Located on the east end of the shopping iconic open-air destination in the heart woods, custom-designed chandeliers and center between Stingray Sushi and of one of Phoenix’s most established lots of natural light, UNION is set to be a Seasons 52, UNION will offer shoppers a neighborhoods, a new take on this is singular draw for Biltmore Fashion Park. mix of small, distinctive boutiques ranging “Regional shopping centers are the best venue for brand activation that exists,” said Salo. “So, if there’s an emerging brand or a successful overseas retailer Meet Eric Salo, ready to enter the U.S. market – or even a powerful dot-com Executive Vice President – eventually a bricks-and- mortar strategy becomes a for Macerich critical component of growth. The best retailers in the world understand this. That’s why our well-situated, market- The strength of but finding that balance is predominantly driven by dominant properties are an a Macerich strength. “We retailers’ needs to reach a Macerich’s coast- invaluable part of building may not always agree, but we particular market,” said Salo. awareness and brand loyalty to-coast portfolio always find a way to move “Beyond that, we invest in with their consumers.” forward.” said Eric Salo, dozens of high-impact, low extends beyond Executive Vice President for cost capital projects every A leader at Macerich for more the quality of the Macerich. year across the portfolio to than 25 years, Salo has always valued the daily variety that’s With the company’s focus ensure we are providing the real estate: it’s also part of his role. “On any given on continually creating best possible environment day, I can be involved with found in the quality value that’s reflective of for our retailers’ success and every operating discipline in each local market, Salo a convenient, enjoyable, safe, of the relationships our company, who are the explains that Macerich’s close well-maintained shopping best and brightest in our developed with connections with retailers center for each community.” industry,” Salo said. “Because retailers, partners, and local shoppers can Salo underscores that every our properties are tuned to prompt everything from the investment Macerich makes is their individual markets, no local communities, addition of a single retailer, driven by the overarching goal two centers are alike and no and shoppers alike. to a comprehensive re- to bring more people through set of opportunities are exactly merchandising program to a the doors, which gives retailers the same. It’s this mix of great “We work closely with key major renovation or expansion the opportunity to do what people and great possibilities stakeholders to establish of a property. each of our properties as a they do best: convert shoppers that makes me optimistic centerpiece in its community.” “We’re extremely disciplined into buyers. about the future of shopping Balancing the competing about major capital centers and of Macerich.” interests can be challenging, investments and they are

in size from 200-500 square feet, as well as Retail concepts at home in UNION retail community in Phoenix. Gallo, in the new casual eatery, Trattoria del Piero. include everything from women’s partnership with Boyd-Williams and a activewear and vintage-inspired clothing to multi-disciplinary group from Macerich, Central to the UNION experience is jewelry, linens, distinctive gifts, handmade helped shape the UNION experience to a 750 square-foot outdoor patio that papers, signature olive oils and even a ensure that the local spirit would prevail. will be activated with live music, chef custom furniture maker and Arizona’s demonstrations, tastings – even a twice- only micro-haberdashery. A florist, bicycle “Authentic and local were the filters we monthly farmers market – all designed shop, eyewear collection and bake shop used for every major decision about to engage the local community and drive round out the eclectic, local mix. UNION – from choosing the local traffic for the property all year long. architect and design partners to sourcing Of UNION’s 18 separate concepts, two the very best local retail concepts,” “UNION will be that modern touch that are start-up businesses. All the rest are said Boyd-Williams. “Even the name a traditional center like Biltmore Fashion new iterations of exceptionally successful, came from a hands-on, after-hours Park needs to compete in a very special already established independent stores brainstorming we held in the raw space way,” said Anne Park, Owner of Cornelia across Phoenix. with some of the region’s most creative Park. “UNION will be blessed to have the retail visionaries.” strength of wonderful, established retailers Helping the Macerich team bring to help them as they build their new UNION to life is consultant Lew Gallo, If the initial leasing success is any customer base.” a well-regarded local retail entrepreneur indication, a more perfect UNION with deep ties to the independent is hard to imagine. 5 Macerich Happenings | Fourth Quarter 2012

Getting More Shoppers to the Finish Line An Interview with Finish Line’s Chairman & CEO Glenn Lyon

Who says slow and steady Happenings had a wide-ranging talk with business is in women’s sizes – and this Finish Line Chairman and CEO Glenn offers an excellent way for us to reach this wins the race? This year Lyon about the department store, digital important demographic. Finish Line – a leading natives and the differences between runners and just about everyone else. We bring to Macy’s our strong vendor retailer of premium partnerships and deep assortments of the athletic shoes, apparel and Q: Finish Line will now be the exclusive most iconic athletic shoe brands. Both athletic shoe provider for Macy’s – please Macy’s and Finish Line are leaders in accessories with more than tell us about this. omni-channel retailing, which is one of 640 mall-based stores – the key reasons this partnership makes so A: This is an exciting partnership on much sense. propelled its brand forward both sides. Starting next spring, we will begin the rollout of 450 Finish Line Q: You talk a lot about aligning all thanks to a major new shop-in-shops inside Macy’s department customer touch points as an omni- partnership with Macy’s, stores, and we will manage inventory and channel retailer. What does this mean for among other innovative procure product for an additional 225 Finish Line? doors, as well as online at Macys.com. strategies. The primary Macy’s customer is female A: Our core customers are males, and that is a different market for us. 18-29. This is a generation of digital Right now, only about 20 percent of our natives who live on the Internet, they

A Look at What’s New Some of the most recent openings across our portfolio

Arrowhead Towne Center at Salisbury Deptford Mall Kierland Commons Center Men’s Warehouse Red Robin Gourmet Burgers Ann Taylor Chipotle Mexican Grill  Soma  Shoe Palace The Village at Eastland Mall Lakewood center Corte Madera Zumiez  Francesca’s Collections Book OFF the shops at Atlas Park Splendid Moe’s Sneaker Spot Fashion Outlets Cross County Niagara Falls Angl Biltmore Fashion Park Shopping center Tim Horton’s  Puma Soma Intimates  Union Vans  Sarku Japan Teriyaki & The shops at Sushi Express  BGR The Burger Freehold Raceway mall north bridge Chandler Joint  Six  Perfumania  Things Cinnabon  Auntie Anne’s  Carvel Bose  Jimmy John’s  Eataly Fashion Center Remembered Cotton On  lululemon  Michael Fresno the Oaks Kors  H&M Danbury Fair Angl LOFT  The Art of Shaving Vera Bradley  Lucky Brand Jeans live on their smartphones and they are as well as a place to buy products. Our reasons. So this is really a different always connected. Finish Line has a customers use their smartphones and customer. This strategy is actually clear strategy for omni-channel that we other devices to gather information quite similar to what we are doing with have been developing, which aligns the that they then use in the stores. Even Macy’s – broadening and deepening our experience for our customers wherever in our new store prototype, we’re not relationships with new sets of customers. they happen to be: in-store, on the web, reinventing the ambiance. Reinvention mobile, or connected through social comes in the utilization of technology. Q: So we have to ask – how many pairs of media. We can be the most relevant sneakers do you have in your own closet? omni-channel retailer by providing our Q: In addition to new Finish Line stores, you also continue to grow your specialty A: I do have a closet full of sneakers, customers a high-quality experience with including some great retros from Nike Finish Line regardless of the channel. running store brand, The Running Company. and Adidas. But my sons’ closets are a Q: Adding new Finish Line stores also lot more interesting than mine – can is a strong part of your growth strategy A: The Running Company venture is a you imagine two boys growing up with a – you’ve announced plans to add 25-30 great complement to our core Finish Line father in the sneaker business? After 30 stores in the current fiscal year. brand. The vast majority of Finish Line years in women’s apparel, let’s just say I customers are driven to performance became a pretty cool dad. A: That’s right. Great stores in great malls products for fashion reasons, while have huge growth opportunity for us. The customers in the running segment are mall has evolved as a social experience, driven to products for performance

Queens center South plains mall Chipotle Mexican Grill  Encore Shoes  Premier Solstice  Teavana Cinemas

Redmond Town Center Southridge

Pinkabella Cupcakes Rue21 Photo courtesy of Virginia Rollison

Rimrock Mall WhiteHouse|Black Market Shoe Palace Eataly, the largest artisanal Italian food and wine emporium in the world, will open it’s second – and largest – U.S. location at Tysons Corner Center The Shops at North Bridge. The 60,000 square-foot location Emporio Armani C Wonder  Tesla  Sparx  with a prime address on Wabash Avenue and Ohio Street, will  Sperry La Madeleine soon become the ultimate culinary destination in Chicago, SanTan Village Chipotle Mexican Grill  Valley Mall offering visitors the opportunity to shop, taste and savor at seven Brighton Collectibles Dick’s Sporting Goods  full-service eateries, as well as a café, wine shop, bakery and Tilted Kilt patisserie, and a culinary educational center. The Eataly Scottsdale concept is a collaboration among Joe Bastianich, Mario Fashion Square Batali, Lidia Bastianich and Oscar Farinetti, who founded Peek, Aren’t You Curious Angl Eataly in Turin, Italy, in 2007. Targeted opening is 2013. 7 Macerich Forms Strategic Renewable Energy Partnership with Panasonic

The forecast for Macerich’s program is environmentally responsible, renewable energy and energy efficiency and importantly, it’s also good business.” projects. comprehensive sustainability efforts: sunny and clear. The solar power initiative is part of Sunny Side Up Macerich’s fully-integrated sustainability This fall Macerich launched a new program established in 2008, which At each of the 12 Macerich shopping partnership with Panasonic on a solar focuses on water conservation, centers, pursuing solar energy benefits power initiative at 12 shopping centers in green cleaning requirements, waste won’t detract from the physical appeal of Arizona, California, Connecticut and New management and energy efficiency. the properties. For the most part, elements York. These solar installations are expected Macerich strives to conduct its business of the installations will be located on to yield 10.2MW to 12MW of clean energy in a socially responsible manner that property roofs – out of sight while working – enough power for approximately 10,000 balances considerations of environmental hard to produce clean energy. and social issues while also creating long- homes. “Macerich is an ideal client for Panasonic’s term value. “Installing clean energy technology at our end-to-end solar solutions,” said Jim properties aligns with our commitment to The first phase of this new program will Doyle, President, Panasonic Eco Solutions be a good neighbor in the communities come online in 2013. North America. “The company’s where we operate,” said Jeffrey Bedell, demonstrated commitment to long- Macerich’s partner, Panasonic Eco Vice President of Sustainability for term sustainability, combined with its Solutions North America, is a division Macerich. “Our partnership with national portfolio of sizeable commercial of Panasonic Corporation of North Panasonic on this large-scale solar properties, provides the right environment America and a leader in the design, for these solar projects to succeed.” implementation and financing of

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