Shopping center owner Macerich is increasingly optimistic that the worst of the pandemic is behind it as it sees strengthening retail sales and foot traffic at properties across the country.

The landlord said it signed 220 leases throughout the first quarter of 2022, over 20% more than the 181 leases it signed for the same time last year. The Santa Monica, California-based real estate investment trust reported a 14.5% jump in tenant revenue for the first three months of the year compared to the same time in 2021 and 11.5% higher than the first quarter of 2019, prior to the pandemic.

"Retailer demand is at a level we haven't seen since 2015," Macerich CEO Tom O'Hern said on an investor call Monday. "The depth and breadth of leasing demand gave us a very strong start this year. Many retailers have strengthened their balance sheets and are financially in a much better position to expand their store openings than they were pre-COVID."

Because the company's portfolio spans nearly 50 million square feet across 44 properties, a majority of which are concentrated along the West Coast, around New York City and near Washington, D.C., its results are seen as a bellwether of the nation's mall activity. Its gains show that after a deluge of store closings, retail bankruptcies and operating restrictions, some retail landlords across the country are benefiting from customers returning to brick-and-mortar stores.

Doug Healey, Macerich's executive vice president of leasing, said the upswing is just beginning.

"Given the mood and health of retailers, the resurgence and importance of brick-and-mortar stores, and the depth and breadth of uses that we have to choose from," he said during the call, "there's no reason to believe this will end anytime soon."

Improving financial conditions, coupled with factors such as rising foot traffic at retail properties and the end of pandemic restrictions, also resulted in a $15 million increase in minimum rents through the first quarter this year across Macerich's portfolio. That was largely because of the elimination of pandemic-driven rent abatements that weighed down the landlord's year-earlier results.

Rising tenant revenue is also setting the stage for potential rent increases, an issue most mall landlords haven't touched since the pandemic's outbreak in early 2020. Average asking rents in malls across the country trail those for regional shopping centers, stand-alone retail properties and strip centers, according to CoStar analysis, and mall rents have only increased by about 3.5% over the past year compared to the nearly 4.5% increase among other retail property types.

"There is opportunity to push rents given the elevated levels that tenants continue to achieve," Macerich Chief Financial Officer Scott Kingsmore said on the investor call.

While concerns such as inflation, rising interest rates and supply chain delays could slow Macerich's recovery, those factors haven't been enough to counter record levels of demand among consumers eager to return to brick-and-mortar shopping and retailers scrambling to accommodate them.

"March was the first month since the pandemic that online sales declined from the same period a year ago, while store sales rose," Healey said of the shifting customer habits bolstering the landlord's recovery. "We remain confident given the healthy retail environment that exists, occupancy will continue to increase throughout 2022 and 2023."

Since hitting its lowest point in decades in the second quarter of 2020, retail leasing has regained momentum across the country to surpass pre-pandemic levels of activity, according to CoStar data. It reached its highest level in four years in 2021, with landlords signing deals for more than 240 million square feet, a 30% bump compared to the multidecade low reported at the onset of the pandemic in 2020.

That momentum has carried into 2022, even with a bevy of global economic concerns potentially slowing progress. Retail leasing activity reached pre-pandemic levels, with nearly 63 million square feet of space signed during the first quarter, according to CoStar data. That is just slightly below the roughly 67 million square feet of of space leased for the same quarter in 2019.

The strong leasing environment has been fueled by a diverse set of retailers hunting for brick-and-mortar space. While the pandemic sidelined some tenants such as gyms, boutique fitness operators, fast-casual restaurants and hotels, Macerich said they're coming back "with a vengeance" to bolster the landlord's outlook for the years ahead.

Some of the most active categories in the first three months of the year included health and fitness, food and beverage, sports, entertainment, coworking, hotel and multifamily operators, the latter two often coming on to fill space left behind by bankrupt department stores.

What's more, Healey said, digitally native brands that pumped the brakes on their physical retail expansion in the early days of the pandemic are now back and leasing up space in another sign of the sector's continued recovery.

"Our executive leasing committee has approved 52% more deals to date, and 10% more square footage, than in the same time frame in 2021, and that was a stellar year," the leasing executive said of demand that is stretching beyond the landlord's record first-quarter results. "This is one of the strongest leading indicators of what's to come that speaks to a forward-looking view of leasing velocity."