Published on Wednesday, April 22, 2026
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Why a tighter set of KPIs is replacing legacy metrics in underwriting.
When Jackson Hsieh took the helm of Macerich in 2024, he inherited a portfolio with strong assets but a problem familiar to many mall owners: the metrics that once defined success no longer matched how value is actually created in bricks-and-mortar retail.
Hsieh, a self-described "recovering banker" after more than three decades on Wall Street, found a company that had spent years talking about densification and mixed-use – office, hotel and multifamily layered onto mall sites – even as its balance sheet sat at more than nine times EBITDA and physical occupancy in its centers hovered at roughly 83%. That environment, he concluded, offered little rent tension, weak vibrancy and limited pricing power.
"What is our true north star?" he recalled asking on a recent CBRE podcast. For Macerich, he decided, it would not be ground-up densification or entitlement execution. It would be creating "thriving retail centers" – whether open-air or enclosed – and underwriting them with a tighter set of performance indicators that speak directly to productivity and risk.
For institutional investors trying to separate future winners from eventual obsolescence among the roughly 250 enclosed Class A malls left in the U.S., that recalibration of KPIs is increasingly the real work of underwriting. These assets are difficult, if not impossible, to replicate at scale. The question is not whether they should exist, but which ones warrant new capital and which ones simply won't clear the bar when the new scorecard is applied.
Sales productivity remains central, but the thresholds have shifted. Where $500 per square foot once defined a Class A mall, today's top centers are commonly expected to produce $800 to $1,000 per square foot or more, backed by weighted-average tenant health and a tenant mix that leans toward "elevated" brands and concepts. Green Street and other analytics firms now blend sales metrics with demographic and income data into composite trade-area scores that give investors a faster read on the depth of the spending pool surrounding a property.
Those trade-area scores matter more as retailers abandon the old strategy of "carpet bombing" markets with eight or ten stores and instead focus on a smaller number of highly productive locations.
On the CBRE podcast, Hsieh and Todd Caruso, who leads retail services for CBRE in the Americas, described tenants such as Aritzia, American Eagle, Gap and newer Gen Z-facing brands as explicitly seeking "the best centers and the best locations within the real estate," not broad market coverage. That retailer selectivity effectively magnifies the importance of being in the right trade area and performing at the top of it.
But the more significant change may be the shift from viewing occupancy as a simple percentage to treating it as a quality-driven, dynamic variable. At 83% physical permanent occupancy, Hsieh argued, a mall has neither vibrancy nor leverage. The dark wings, temporary tenants and underperforming anchors that often lurk behind that number erode the experience and undercut rent growth.
Macerich's internal target is to move its portfolio into the 89% to 90% band – high enough to create price tension but not so full that there is no flexibility. Some vacancies are intentional, preserving the ability to relocate tenants, build out new flagship stores, and continuously refine adjacencies. In an enclosed mall with 400,000 to 600,000 square feet of fully occupied in-line space, Hsieh described that flexibility as a competitive advantage, the equivalent of a three-dimensional chessboard where the landlord can move pieces to upgrade entire wings.
Leasing velocity and build-out execution are now explicitly part of that value equation. To attack dark anchors and underperforming in-line space, Macerich modeled "every single space" in its portfolio, then embarked on an 18‑month sprint to re-lease roughly 25% of its total space – about 1,000 units and more than 7 million square feet. The effort, supported by CBRE, has generated commitments for new anchors such as Dicks House of Sport and a range of aspirational and experiential tenants.
The underwriting implication is straightforward: a Class A mall's risk profile is no longer captured by a static rent roll. Investors need to understand a landlord's demonstrated ability to push deals from LOI to opening on schedule, at or above pro forma rents, and to execute dozens or hundreds of these moves in parallel without overtaxing capital and construction teams. Leasing velocity that materially outpaces the market and a high conversion rate from signed leases to timely store openings are differentiators that belong in any forward cash-flow model.
Dwell time, once viewed primarily as a marketing or merchandising concept, is also migrating into the underwriting toolkit. Caruso described how CBRE uses mobile location data to track not only footfall but how long visitors stay in specific wings or zones. Underperforming quadrants – with both lower traffic and shorter stays – become candidates for anchor repositioning, infill with entertainment or food-and-beverage concepts, or more radical interventions such as subdividing legacy department boxes.
The best owners are using those insights to prioritize capital, not just to justify a new entertainment lease or sponsorship program. A wing anchored by a concept such as Dave & Buster's or a high-engagement sporting goods format tends to drive longer visits and higher cross-shopping across the asset. In underwriting terms, dwell time becomes a leading indicator that links merchandising decisions to NOI growth assumptions, rather than a soft measure to be left to marketing teams.
Overlaying all of this is the cost of capital and balance sheet capacity. Hsieh was blunt that a highly levered REIT cannot afford multi-year, capital-intensive densification strategies if it defers earnings growth and extends risk. In his view, the path to deleveraging runs through NOI expansion driven by leasing and merchandising – a forecast $140 million in incremental revenue from the current leasing wave, with an estimated 80% flow-through to NOI – rather than through large, long-dated development bets.
For institutional buyers and lenders, the new underwriting challenge is to distinguish between owners that still underwrite these irreplaceable malls as quasi-bond investments and those that have embraced an operating-company mindset backed by rigorous, performance-based metrics. The assets may look similar on a map, and many sit on entitled land with theoretical mixed-use potential. The spread in outcomes will depend on a smaller, sharper set of KPIs: high and improving sales per square foot, strong trade-area scores, intentional occupancy in the high‑80s to low‑90s, measurable gains in dwell time in formerly weak zones, and a proven record of leasing velocity and execution.
In a market where only a fraction of the country's enclosed malls are truly Class A, that set of indicators may be the clearest line between centers that compound value and those that simply age in place.