About Simon Property Group, Inc.

Simon Property Group is the largest shopping mall and retail center owner in the US. The self-managed, self-administered real estate investment trust (REIT) owns, develops, and manages regional shopping malls, outlet malls (under the Premium Outlet and The Mills brands), boutique malls, and shopping centers. Its roughly $25 billion real estate portfolio is composed of some 200 retail properties totaling approximately 180 million sq. ft. of leasable space. Its portfolio covers 35 states and Puerto Rico, though much is concentrated in the US Southeast, Midwest, and Northeast. The REIT also has stakes in outlet centers in Canada, Mexico, Europe and Asia. CEO and chairman David E. Simon is the son of Melvin Simon, who founded the firm with his brother, Herbert.

Operations

Simon Property's primary operations are the ownership, development, leasing, and management of its retail real estate portfolio. The extend of its involvement, and revenue generation, varies by its degree of ownership. In addition to owning some 150 properties in the US, it is a joint-venture partner in about 80, mostly international, properties. It also uses joint ventures to hold equity investments in several European real estate holding companies.

The extent of Simon Property's involvement in managing the properties is also influenced by its ownership stake. It manages the day-to-day operations of its owned properties as well as about 60 of its joint-venture properties. The remaining properties, all of which are located outside the US, are managed through joint ventures in which Simon shares, but does not have majority, control.

The company makes about 60% of its revenue from rental income, just less than 30% from tenant recoveries (reimbursements to Simon Properties for common area maintenance, real estate taxes, etc.), and the rest from overage rents, management fees, and other corporate revenue.

Geographic Reach

Indianapolis, Indiana-based Simon Property Group owns and operates - wholly or as part of joint ventures - retail real estate properties in the Americas, Europe, and Asia.

By far its largest market is the United States, where it generates over 95% of its revenue and holds nearly 95% of its long-lived assets.

Sales and Marketing

Simon Property enters long-term tenancy contracts with retailers to fill its properties. Its lease terms must be competitive to attract desirable tenants and its management services provide post-sale customer care to its lessees and also strive to pull consumer traffic into its properties with local advertising and special events (Santa Claus at the Mall, for example).

Although internet-based retail presents challenges to many of Simon's typical tenants, the REIT maintains the relevance of a brick-and-mortar presence. Still, it is modifying its store mix within its properties to include more entertainment and residency offerings, while still working with its long-standing clients to fill space in its retail properties.

Many of its properties are anchored by major tenants such as JCPenney, Macy's, Dillard's, Neiman Marcus, and Bloomingdale's and supplemented with smaller stores like Dick's Sporting Goods, Sears, Nordstrom, Kohl's, and AMC Theatres. Its Premium Outlets are home to a variety of popular retailers including Adidas, American Eagle Outfitters, Ann Taylor, Columbia Sportswear, Michael Kors, Tommy Hilfiger, and The North Face.

Occupancy for its US malls, Premium Outlets, and Mills-branded properties remain above 96%. No one tenant accounts for more than 5% of its consolidated revenue.

Financial Performance

The long-term trend in revenue and net income has been positive over recent years. Net income swooned a bit in 2012 - 2014 but remained above $1 billion annually. Revenue climbed steadily since 2012, growing from $2.3 billion in that year to just more than $5.4 billion in 2016.

Simon Property's 2016 revenue of $5.4 billion grew about 3% from 2015's $5.3 billion as a result of a higher rents, overcoming a slightly lower dollar-per-square-foot sales number from its tenants. Occupancy rates of over 96% remained near historically peak levels.

In 2016, net income from continuing operations was $2.1 billion, matching 2015's result. Depreciation and amortization along with a write-off of costs related to an abandoned project prevented the revenue increase from flowing to the bottom line.

Simon's cash balance at the end of 2016 was $560 million, a decrease of $141 million when compared to the prior year. The change arose from $3.4 billion generated by operating activities offset by just under $1 billion used by investing activities (mainly from capital expenditures, acquisitions, and joint-venture investments) and $2.5 billion used by financing activities (primarily for higher than usual debt repayments).

Strategy

The retail industry is encountering both cyclical and structural changes, including aging US demographics (and therefore less retail spending) and internet-based e-commerce. Simon Property is changing with the times by reformulating the tenant mix in its properties and addressing new and redevelopment needs in growth markets.

Acknowledging the changing retail dynamic, Simon is diversifying its properties away from apparel-heavy approaches by transitioning its tenant base to include residential space, hotels, entertainment options, restaurants, and wellness centers. The idea is to entice consumers to its property not only to shop but to be entertained and possibly even spend the weekend. Centers such as The Domain in Austin, TX and the jointly-developed Brickell City Centre in Miami, FL exemplify this new approach.

Simon is averaging $1 billion in annual investments to build new, or redevelop existing, properties. In 2016, Simon redeveloped the Stanford Shopping Center in Palo Alto, CA and the East Coast's largest shopping center, King of Prussia. At the end of 2016, Simon had $1.1 billion of redevelopment and expansion projects at nearly 30 sites, including at Woodbury Common Premium Outlet in New York City and La Plaza Mall in McAllen, TX. The company's approach is to start with the aesthetic and functional appeal and then to add on-site customer service and technology to make the shopping experience easier and more efficient for shoppers and retailers.

Mergers and Acquisitions

In 2016 Simon acquired with a partner a non-controlling 75% interest in an outlet center in Ochtrup, Germany and later that year purchased, with a joint venture partner, a luxury shopping center on the Las Vegas Strip for $1.1 billion. In that same year it divested two multi-family residential investments and several retail properties for about $82 million.

- Show Less + Show Full Description

Company News and Press Releases

- Show Less + Show More News and Press Releases

Simon Property Group, Inc.

225 W Washington St
Indianapolis, IN 46204-3438
Phone: 1 (317) 636-1600
Fax: 1 (317) 685-7270

Stats

  • Employer Type: Public
  • Stock Symbol: SPG
  • Stock Exchange: NYSE
  • Chairman and CEO: David Simon
  • Chairman and CEO: David Simon
  • President and COO: Richard S. Sokolov
  • 2017 Employees: 5,000

Major Office Locations

  • Indianapolis, IN

Other Locations

  • Anchorage, AK
  • Boaz, AL
  • North Little Rock, AR
  • Brea, CA
  • Cabazon, CA
  • Camarillo, CA
  • Carlsbad, CA
  • Folsom, CA
  • Gilroy, CA
  • Laguna Hills, CA
  • Mission Viejo, CA
  • Orange, CA
  • Palo Alto, CA
  • San Diego, CA
  • Santa Rosa, CA
  • Torrance, CA
  • Vacaville, CA
  • Westminster, CA
  • Alamosa, CO
  • Aurora, CO
  • Clinton, CT
  • Waterford, CT
  • Dover, DE
  • Boca Raton, FL
  • Boynton Beach, FL
  • Coral Springs, FL
  • Doral, FL
  • Estero, FL
  • Fort Myers, FL
  • Jensen Beach, FL
  • Leesburg, FL
  • Melbourne, FL
  • Miami, FL
  • Ocala, FL
  • Orange Park, FL
  • Orlando, FL
  • Panama City Beach, FL
  • Pensacola, FL
  • Port Charlotte, FL
  • Port Richey, FL
  • Saint Petersburg, FL
  • Sanford, FL
  • South Miami, FL
  • Sunrise, FL
  • Atlanta, GA
  • Buford, GA
  • Dawsonville, GA
  • Duluth, GA
  • Kennesaw, GA
  • Waipahu, HI
  • Cedar Rapids, IA
  • Davenport, IA
  • Alton, IL
  • Aurora, IL
  • Lincolnwood, IL
  • Orland Park, IL
  • Peoria, IL
  • Springfield, IL
  • Bloomington, IN
  • Edinburgh, IN
  • Evansville, IN
  • Greenwood, IN
  • Kokomo, IN
  • Lafayette, IN
  • Michigan City, IN
  • Mishawaka, IN
  • Muncie, IN
  • Noblesville, IN
  • Pleasant Prairie, IN
  • Topeka, KS
  • Lake Charles, LA
  • Boston, MA
  • Braintree, MA
  • Chestnut Hill, MA
  • Danvers, MA
  • Hyannis, MA
  • Lee, MA
  • Needham, MA
  • North Attleboro, MA
  • Peabody, MA
  • Saugus, MA
  • Wrentham, MA
  • Bowie, MD
  • Glen Burnie, MD
  • Hanover, MD
  • Waldorf, MD
  • Bangor, ME
  • Kittery, ME
  • Portland, ME
  • Ann Arbor, MI
  • Albertville, MN
  • Duluth, MN
  • Edina, MN
  • Saint Paul, MN
  • Independence, MO
  • Lebanon, MO
  • Osage Beach, MO
  • Springfield, MO
  • Smithfield, NC
  • Merrimack, NH
  • Salem, NH
  • East Brunswick, NJ
  • Edison, NJ
  • Elizabeth, NJ
  • Flemington, NJ
  • Hackensack, NJ
  • Jackson, NJ
  • Jersey City, NJ
  • Lawrenceville, NJ
  • Livingston, NJ
  • Rockaway, NJ
  • Toms River, NJ
  • Albuquerque, NM
  • Las Vegas, NV
  • Reno, NV
  • Central Valley, NY
  • Garden City, NY
  • Huntington Station, NY
  • Lake Grove, NY
  • Lakewood, NY
  • New York, NY
  • White Plains, NY
  • Yorktown Heights, NY
  • Ada, OH
  • Aurora, OH
  • Cleveland, OH
  • Lima, OH
  • Oklahoma City, OK
  • Tulsa, OK
  • Langhorne, PA
  • North Wales, PA
  • Philadelphia, PA
  • Pittsburgh, PA
  • Tannersville, PA
  • West Mifflin, PA
  • Whitehall, PA
  • Charleston, SC
  • Greenville, SC
  • Rapid City, SD
  • Sioux Falls, SD
  • Crossville, TN
  • Knoxville, TN
  • Memphis, TN
  • Austin, TX
  • Cedar Park, TX
  • Corsicana, TX
  • El Paso, TX
  • Garland, TX
  • Georgetown, TX
  • Harlingen, TX
  • Houston, TX
  • Katy, TX
  • Longview, TX
  • Mcallen, TX
  • Mercedes, TX
  • Midland, TX
  • San Antonio, TX
  • San Marcos, TX
  • Tyler, TX
  • Arlington, VA
  • Charlottesville, VA
  • Chesapeake, VA
  • Harrisonburg, VA
  • Leesburg, VA
  • North Chesterfield, VA
  • Winchester, VA
  • Kennewick, WA
  • North Bend, WA
  • Quil Ceda Village, WA
  • Seattle, WA
  • Tacoma, WA
  • Fond Du Lac, WI
  • Green Bay, WI
  • Greendale, WI
  • Johnson Creek, WI
- Show Less + Show More