A rendering of Macerich’s Broadway Plaza in Walnut Creek, Calif.

The Macerich Company's Arthur Coppola said the real estate investment trust is starting to reap the benefits of some major changes.

The Macerich Co.’s chairman and chief executive officer Arthur Coppola said the real estate investment trust is starting to reap the benefits of some major changes to its portfolio, including the sale of 15 underperforming mall properties.

“We believe the company is at an important inflection point with outsized growth coming,” Coppola said. “Significant investments were made in the transformation of the portfolio.”

The focus for Macerich is clearly on top-performers, “winners,” as Coppola said. That’s where retailers want to be. “They are putting their revenue into A malls, outlet centers, flagship [locations] and omnichannel initiatives,” he added.

Macerich on Wednesday released financial results for the first quarter. Net income increased 38 percent to $24.6 million, or 15 cents a share, for the quarter ended March 31, from $17.8 million, or 13 cents a share, in the 2014 period.

Funds from operations for the first quarter of 2015 rose 11 percent to $135 million, or 79 cents a share, from $121.6 million, or 81 cents a share, in the first quarter of 2014. The results included an early extinguishment of debt of $2.2 million, or 1 cent a share, and $13.6 million, or 8 cents a share, of expenses related to an unsolicited takeover attempt.

Mall tenant annual sales increased 7.4 percent in the first quarter to $607 a square foot from $565 a square foot in last year’s first quarter. On a same-center basis, annual sales increased 4.3 percent to $604 in the 2015 period from $579.

Occupancy for the Macerich mall portfolio was up 30 basis points to 95.4 percent as of March 31, from 95.1 percent as of March 31, 2014. Average base rent at all regional shopping centers for the year ended March 31 rose 8.3 percent to $53.31 from $49.21 in 2014.

Store closures related to bankruptcies and downsizings included 52 locations with 132,000 square feet of space across the portfolio. “It’s an opportunity to increase revenues and maximize leasing spreads,” Coppola said. “We’ve made great progress with Coldwater Creek, Juicy Couture and Love Culture, which had 27 locations combined.”

“Another major initiative is operating margin expansion,” Coppola said. “We have the opportunity to increase operating margins this year and next by at least 400 basis points through efficiency projects and enhancing common areas.”

The ceo said Macerich will examine opportunities to monetize its assets through ventures and dispositions, and then redeploy the proceeds to its most attractive properties. “We’re talking to a number of very significant core type of investors about the possibility of doing joint ventures,” he said. “We’ll recycle out of some of our lower growth assets and ultimately redeploy the capital, which could be significant. It’s definitely in our playbook for this year.”

Coppola cited the joint venture agreement with Sears Holdings Corp. that was signed on Wednesday evening. In addition to contributing stores and leasing them back from Macerich, Coppola said the REIT entered into an agreement to recapture a 300,000-square-foot Sears unit at the Kings Plaza Shopping Center in Brooklyn. “This will jump-start the next phase of the Kings Plaza redevelopment,” Coppola said. “Two-to-three new anchors will be redeployed to that Sears square footage.”

Areas of strength include large-format and anchor retailers with notable deals such as Century 21 at the Green Acres Mall in Valley Stream, N.Y., and a Restoration Hardware RH Gallery at the Village at Corte Madera in Marin County, Calif. Brands such as L Brands, Luxottica and Kay Jewelers are expanding.

“There’s continued growth from foreign retailers,” Coppola said, citing H&M, Zara and Uniqlo. “We also see The Kooples, Garage, Camper, Kiko, Jo Malone and Primark” growing, and examples of larger retailers generating new brands include Gap Inc.’s Athleta, Ann Inc.’s Lou & Gray, H&M’s & Other Stories and Macy’s Inc.’s acquisition of Bluemercury. Soft Surroundings, Yellow Box, Jonathan Adler and Kendra Scott are in the market for stores, along with Anthropologie, Hannah Andersson, Vera Bradley and Kiehl’s.

Referring to Simon Property Group’s failed attempt to acquire Macerich, Coppola said, “While today’s focus is on business and financial operating results, we always seek to maintain open communications with shareholders. They want us to remain focused on the business to drive outsized results.”

Two activist shareholders are suing Macerich for blocking their nominees to the board. Macerich classified its board, where directors are assigned to one of three classes, each serving three-year terms, a move solely intended to protect stockholder value. “Our intent is to announce several changes in the near future demonstrating the board’s sound corporate governance,” Coppola said.