Company Reports

Simon Property Group has reported same-store net operating income growth of at least 4% every year for the past five years, with the figure accelerating to 8.5% in the second quarter of 2026.

Simon Property Group, the largest mall real estate investment trust, manages one of the top retail portfolios in the country. It owns and operates Class A traditional regional malls and premium outlets in markets with dense populations and high incomes; these malls frequently have domestic or international tourist appeal. The high-quality properties will continue to provide consumers with unique shopping experiences that are hard to replicate elsewhere, and as a result, we think Simon's portfolio will be sought after by retailers that are increasingly pursuing an omnichannel strategy.

Simon Property Group reported funds from operations of $3.15 per share and same-store net operating income growth of 8.5% for the second quarter.

Simon Property Group reported funds from operations of $2.91 per share and same-store net operating income growth of 6.7% for the first quarter.

Simon Property Group, the largest mall real estate investment trust, manages one of the top retail portfolios in the country. It owns and operates Class A traditional regional malls and premium outlets in markets with dense populations and high incomes; these malls frequently have domestic or international tourist appeal. The high-quality properties will continue to provide consumers with unique shopping experiences that are hard to replicate elsewhere, and as a result, we think Simon's portfolio will be sought after by retailers that are increasingly pursuing an omnichannel strategy.

Simon Property Group reported funds from operations of $3.27 per share and same-store net operating income growth of 4.8% for the fourth quarter.

Simon Property Group reported funds from operations of $3.25 per share and same-store net operating income growth of 5.1% for the third quarter.

Simon Property Group, the largest mall real estate investment trust, manages one of the top retail portfolios in the country. It owns and operates Class A traditional regional malls and premium outlets in markets with dense populations and high incomes; these malls frequently have domestic or international tourist appeal. The high-quality properties will continue to provide consumers with unique shopping experiences that are hard to replicate elsewhere, and as a result, we think Simon's portfolio will be sought after by retailers that are increasingly pursuing an omnichannel strategy.

Simon Property Group reported funds from operations, or FFO, of $3.15 per share and same-store net operating income growth of 4.7% for the second quarter.

Simon Property Group, the largest mall real estate investment trust, manages one of the top retail portfolios in the country. It owns and operates Class A traditional regional malls and premium outlets in markets with dense populations and high incomes; these malls frequently have domestic or international tourist appeal. The high-quality properties will continue to provide consumers with unique shopping experiences that are hard to replicate elsewhere, and as a result, we think Simon's portfolio will be sought after by retailers that are increasingly pursuing an omnichannel strategy.

Simon Property Group reported funds from operations of $2.95 per share and same-store net operating income growth of 3.6% for the first quarter.

Simon Property Group, the largest mall real estate investment trust, manages one of the top retail portfolios in the country. It owns and operates Class A traditional regional malls and premium outlets in markets with dense populations and high incomes; these malls frequently have domestic or international tourist appeal. The high-quality properties will continue to provide consumers with unique shopping experiences that are hard to replicate elsewhere, and as a result, we think Simon's portfolio will be sought after by retailers that are increasingly pursuing an omnichannel strategy.

Simon Property Group reported fourth-quarter results were relatively in line with our expectations, leading us to reaffirm our $175 fair value estimate for the no-moat company. Occupancy sequentially increased 30 basis points to 96.5%, which is the highest single quarter the company has reported since the fourth quarter of 2016 and the third-highest single quarter the company has reported in at least the past two decades. Minimum rent increased 2.5% year over year, and property net operating income rose 4.5% in the fourth quarter. However, while the company reported the highest NOI from retail investments and other sources for the year in the fourth quarter at $200 million; that was below the $236 million figure the company reported from those sources in the fourth quarter of 2023. As a result, total company NOI grew 1.8% in the fourth quarter. Simon reported funds from operations of $3.68 per share in the quarter. However, that includes a 20-cent adjustment for a gain on sale and 13 cents of other noncash adjustments. Removing those, Simon reported a real estate FFO of $3.35 that was relatively in line with our $3.42 estimate.

Over the past few years, we have observed an inverse relationship between share prices in the REIT sector and interest-rate movements. We believe a major reason is that all commercial real estate valuations are connected to interest rates. Capitalization rates directly indicate the return expectations for a real estate investment and expectations for risk and growth. Historically, we have observed that commercial real trades at cap rates consistently spread above the 10-year US Treasury. If interest rates rise, investors will require a higher return, and thus a higher cap rate, to accept the risk associated with an investment in a real estate asset. Since return expectations have held relatively steady for most real estate sectors over the past few years, higher cap rates translate to falling prices for real estate.

Simon Property Group, the largest mall real estate investment trust, manages one of the top retail portfolios in the country. It owns and operates Class A traditional regional malls and premium outlets in markets with dense populations and high incomes; these malls frequently have domestic or international tourist appeal. The high-quality properties will continue to provide consumers with unique shopping experiences that are hard to replicate elsewhere, and as a result, we think Simon's portfolio will be sought after by retailers that are increasingly pursuing an omnichannel strategy.

Simon Property Group's third-quarter results were relatively in line with our expectations, leading us to reaffirm our $161 fair value estimate for the no-moat company. Occupancy improved 60 basis points sequentially to 96.2%, the highest it has been for Simon’s portfolio since 2016. Minimum rent increased 2.3%, in line with our estimate, and same-store property net operating income grew 5.0%. However, Simon saw a $7.6 million loss from its retail investments and a decline in corporate and other NOI sources, so total company NOI only grew 2.1% in the third quarter. The company reported funds from operations of $2.84 per share. Excluding a $49.3 million noncash loss for marking to market its investment in Klépierre exchangeable bonds and excluding a $28.3 million adjustment for retail investments, Simon would have reported FFO of $3.05 per share for the quarter, relatively in line with our $3.07 estimate.

The REIT sector in the US offers many companies that should see relatively stable cashflow growth over the next several years. While the pandemic hurt REIT valuations in 2020, the recovery of fundamentals across most sectors combined with low interest rates led to strong total returns in 2021 and early 2022. However, despite fundamentals continuing to perform well over the past three years with many reaching historical levels of net operating income growth, the REIT sector underperformed the broader equity markets in 2023 and into the first half of 2024. We believe that is due to the sector’s negative correlation with interest rates, as income-oriented investors rotate out of the sector, higher rates lower the value REITs can create with external growth, and property valuations fall in line with higher rates. However, interest rates have fallen since the end of July, leading to a rally for the REIT sector. Still, we still view many of companies in the US REIT sector as being undervalued as the companies should continue to produce solid long-term growth.

Simon Property Group, the largest mall real estate investment trust, manages one of the top retail portfolios in the country. It owns and operates Class A traditional regional malls and premium outlets in markets with dense populations and high incomes; these malls frequently have domestic or international tourist appeal. The high-quality properties will continue to provide consumers with unique shopping experiences that are hard to replicate elsewhere, and as a result, we think Simon's portfolio will be sought after by retailers that are increasingly pursuing an omnichannel strategy.

Despite a rally over the past two months, we still view the US REIT sector as being undervalued. While the pandemic hurt REIT valuations in 2020, the recovery of fundamentals across most sectors led combined with low interest rates led to strong total returns in 2021 and early 2022. However, despite fundamentals continuing to perform well over the past three years, with many reaching historical levels of net operating income growth, the REIT sector has underperformed the broader equity markets in 2023 and into the first half of 2024. We believe that the cause has been due to the sector's negative correlation with interest rates as income-oriented investors rotate out of the sector, higher rates lower the value REITs can create with external growth, and property valuations fall in line with higher rates. However, interest rates have fallen since the end of July, leading to a rally for the REIT sector. We believe that US REITs will continue to see share price movements that are inverse of interest rate movements.

Simon Property Group reported second-quarter results that were relatively in line with our estimates, leading us to reaffirm our $156 fair value estimate for the no-moat company. Occupancy improved 10 basis points sequentially to 95.6%, above our estimate of 95.0% for the quarter. Minimum rent improved 3.0%, better than our estimate of 2.0% minimum rent growth, and North America property net operating income increased 5.2%, better than our estimate of 4.2% NOI growth. While income from retail investments was only $6.5 million in the quarter, that is relatively in line with our $12 million estimate and is significantly better than the $83 million loss reported in the first quarter. Simon reported funds from operations of $2.90 per share in the second quarter, slightly below our $2.97 estimate and just 0.9% above the $2.88 figure the company reported in the second quarter of 2023.