Simon Property Group suffers billion-dollar earnings hit

“I do frankly want to turn the page on 2020,” CEO says

National /
Feb.February 08, 2021 09:02 PM
Chief Executive Officer of Simon Property Group David Simon. (Alamy, Getty)

David Simon, CEO of Simon Property Group (Alamy, Getty)

In April 2019, amid a war with e-commerce, mall magnate David Simon told investors, “I think most of the bad news is behind us. But I can’t guarantee it.”

He sure couldn’t.

Simon Property Group had a rough year. The coronavirus pandemic accelerated store closures and devastated revenues for the mall landlord.

“I do frankly want to turn the page on 2020,” the CEO said during an earnings call Monday.

Over the course of the year, the REIT lost 13,500 shopping days across its portfolio to lockdowns.

The largest U.S. mall operator’s net operating income fell 17.1 percent for the year, thanks largely to rent abatements, uncollectible rent, lower sales-based rent and less ancillary property income. Simon agreed to $341 million in rent deferrals and $410 million in rent abatements during the pandemic.

For the year, Simon lost nearly $1.15 billion in lease income, management fees and other streams, and revenue dwindled to $4.6 billion from $5.76 billion.

In the fourth quarter, reported net income of $312.7 million was down from $590.4 million from a year earlier. For the year, consolidated net income was $1.28 billion, a dramatic drop from last year’s $2.42 billion.

“We worked our you-know-what off to mitigate that through cost savings,” Simon said. “We were pretty aggressive in running the ship as lean and as tight as we could.”

Simon noted that the company plans to sell properties.

Occupancy was 91.3 percent as of Dec. 31. As of Feb. 5, the company has collected 90 percent of its net billed rents for the second, third and fourth quarters combined across its U.S. retail portfolio.

Still, Simon has been investing back into its company.

Simon saved retailers Forever 21, Lucky Brands, Brooks Brothers and J.C. Penney from bankruptcy, and completed its acquisition of Taubman Realty Group.

“We’re optimistic that in the future our value will begin to be appreciated again,” Simon said.





    Related Articles

    arrow_forward_ios
    State Sen. Brad Hoylman and State Assemblymember Harvey Epstein (Getty)
    Lawmakers propose canceling restaurant rent, providing relief for landlords
    Lawmakers propose canceling restaurant rent, providing relief for landlords
    Columbia University
    Columbia University inks deals with 2 restaurants
    Columbia University inks deals with 2 restaurants
    Steve Witkoff and Ian Schrager in front of the iconic PUBLIC hotel escalators. (PUBLIC, Getty)
    EB-5 fund alleges Schrager, Witkoff siphoned money from Public Hotel
    EB-5 fund alleges Schrager, Witkoff siphoned money from Public Hotel
    Best Buy has closed about 20 of its big-box stores in each of the past two years (iStock)
    Best Buy lays off 5,000 staffers, increases store closures
    Best Buy lays off 5,000 staffers, increases store closures
    The Promenade on the Peninsula in Rolling Hills Estates, California (Google Maps, iStock)
    Landlords take on short-term debt to spruce up struggling assets
    Landlords take on short-term debt to spruce up struggling assets
    Ryan Serhant and Gary Barnett on Development Slowdown in Pandemic
    Coffee Talk: Extell’s Gary Barnett and Ryan Serhant
    Coffee Talk: Extell’s Gary Barnett and Ryan Serhant
    (Photo illustration by The Real Deal)
    Underwater hotel owners are walking away from their properties
    Underwater hotel owners are walking away from their properties
    Cushman & Wakefield CEO Brett White
    Cushman reports 10% drop in revenue in 2020
    Cushman reports 10% drop in revenue in 2020
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...