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
    Wharton Properties’ Jeff Sutton with 1551-1555 Broadway
    Jeff Sutton faces foreclosure on Times Square American Eagle store
    Jeff Sutton faces foreclosure on Times Square American Eagle store
    U.S. Treasury Secretary Janet Yellen
    NY gets more federal rent aid — but only 6% of need
    NY gets more federal rent aid — but only 6% of need
    Commissioner of the Division of Housing and Community Renewal's RuthAnne Visnauskas (Getty, NY Gov)
    Rent stabilization complaints piling up at agency
    Rent stabilization complaints piling up at agency
    Beanie Babies founder Ty Warner and 57 East 57th Street (Getty Images, MBandman, CC BY 2.0 - via Wikimedia Commons)
    Owner’s feud with Four Seasons leaves Midtown hotel in limbo
    Owner’s feud with Four Seasons leaves Midtown hotel in limbo
    WeWork CEO Sandeep Mathrani (Getty Images, WeWork)
    WeWork stock has taken a WeDive. Will it resurface?
    WeWork stock has taken a WeDive. Will it resurface?
    Cartier's Cyrille Vigneron and 653 Fifth Avenue (Cartier, Linkedin, Getty)
    Cartier betting on appetite for luxury with US retail expansion
    Cartier betting on appetite for luxury with US retail expansion
    Gale Brewer (Getty, Gale Brewer)
    City takes aim at landlords’ empty retail space
    City takes aim at landlords’ empty retail space
    SL Green chairman Marc Holliday and One Madison Avenue (Getty Images, SL Green Realty Corp)
    Franklin Templeton takes 347K sf at SL Green’s One Madison Avenue
    Franklin Templeton takes 347K sf at SL Green’s One Madison Avenue
    arrow_forward_ios

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

    Loading...