Strong 3Q Results Lead to Dividend and 2021 Guidance Increases for Simon Property Group

Third-quarter results for no-moat Simon Property Group were slightly ahead of our expectations, though we didn't see anything in the quarter that would lead to a material change to our $149 fair value estimate. Occupancy improved for the second straight quarter, up 100 basis points sequentially to 92.8%. Re-leasing spreads saw another large decline, with new rents 22.3% lower than expiring rents, though that is slightly better than the 25.2% drop we had anticipated. Domestic property net operating income improved 24.5% year over year, mainly due to malls being fully open in 2021, whereas many were closed for periods in the third quarter of 2020.