“We kicked the crap out of ‘21”: Largest U.S. mall owner claims comeback

Simon Property Group beats earnings, revenue estimates as it leans into investments, redevelopment

David Simon (Simon Property Group)
David Simon (Simon Property Group)

Despite being the nation’s largest mall owner, CEO David Simon has repeatedly claimed that Simon Property Group is more than just “a mall company.”

Some of the REIT’s latest moves, detailed on its quarterly earnings call Monday, suggest he may be right.

SPG is redeveloping five of its mall locations. The Phipps Plaza in Atlanta will soon be joined by a Nobu-branded hotel and restaurant and a 13-story Class A office building, both expected to open on the property this summer. Construction also continues on redevelopment projects at the Falls in Miami, Roosevelt Field in Garden City, New York, and Stanford Shopping Center in Palo Alto, California.

In addition, the company has been scooping up bankrupt retailers, such as JCPenney, Brooks Brothers and Forever 21.

“Unlike other people who make investments and lose money, we make investments and make money,” Simon explained to analysts on the call, without citing specifics — though he did call JCPenney’s performance last year “impressive.”

As of December, SPG owns 232 properties comprising 186 million square feet in North America, Asia and Europe, along with an 80 percent interest in the Taubman Realty Group, which owns 24 malls in the U.S. and Asia. Additionally, the REIT owns a 22.4 percent ownership interest in Klépierre, a publicly traded, Paris-based real estate company, which owns shopping centers in 14 European countries.

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The company’s funds from operations hit nearly $4.5 billion last year, topping its pre-pandemic $4.3 billion in 2019 and setting an annual record.

Net income attributable to common stockholders was $2.2 billion, doubling the $1.1 billion reported in 2020 and edging out 2019’s $2.1 billion in 2019.

Occupancy hit 93.4 percent at Dec. 31, inching closer to the 95.1 percent occupancy reported at the end of 2019. Base minimum rent per square foot was $53.91.

The year represented a comeback for SPG after a difficult 2020 in which the lockdowns shuttered most of its malls and rent collection fell by nearly half. The REIT resorted to suing its tenants to claw back some of that cash. The company opened last year by reporting a billion-dollar earnings hit compared to 2019.

“‘22 is going to continue to be a transition year, like ‘21 was,” Simon said. “But we kicked the crap out of ‘21.”

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Simon Property Group's David Simon (Getty, iStock)
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