Simon Property Group

Simon’s moat derives from efficient scale and location scarcity, reinforced by cost advantages from best‑in‑class leasing, marketing and data, plus soft network effects as top retailers cluster where footfall is highest.

U.S. malls and Premium Outlets were 96.0% occupied at June 30, 2025, with sales productivity of $736 per square foot and rising base rents, evidencing ongoing tenant demand for Simon’s nodes. Redevelopment creates embedded growth and raises switching costs as retailers integrate into multi‑asset programs across the platform.

Key erosion vectors are e‑commerce substitution and tenant credit events; however, Simon’s top‑quartile centers and outlet value proposition have historically outperformed during retail shake‑outs.

Pricing power is solid but not unconstrained. Base minimum rent per square foot increased 1.3% year over year in Q2‑25 and 2.5% for full‑year 2024 as leases reprice; occupancy gains and positive releasing spreads support further rent growth, albeit at modest single digits given retailer cost sensitivity and macro conditions.

Ancillary income, specialty leasing and redevelopment densification add monetization levers. Overall margin structure is strong, yet exposure to tenant distress can intermittently pressure cash collections and concessions.

Cash generation is anchored by long‑duration leases, diversified categories and international outlets. Trailing‑twelve‑month Real Estate FFO per diluted share is about 12.40 (Q3‑24 3.05, Q4‑24 3.35, Q1‑25 2.95, Q2‑25 3.05), and 2025 guidance was raised to 12.45–12.65, reflecting steady NOI growth.

This profile provides above‑average visibility versus most cyclical real estate. Risks include consumer softness, retailer bankruptcies and FX at international JVs, but Simon’s leasing performance and portfolio quality have historically dampened volatility.

The balance sheet is a competitive weapon. As of June 30, 2025 Simon had about $9.2 billion of liquidity and an effective weighted‑average interest rate near 3.63% with the vast majority fixed; variable exposure is limited.

In August 2025 the operating partnership sold $1.5 billion of senior notes at 4.375% (2030) and 5.125% (2035) to refinance 2025 notes, extending duration at reasonable coupons amid an A‑category ratings profile. This conservatism supports dividend growth and redevelopment funding through cycles.

Management is upgrading the asset base and simplifying non‑core stakes. 2025 moves included acquiring the remaining interests in Miami’s Brickell City Centre retail and parking and buying two Italian The Mall Luxury Outlets, both high‑barrier, luxury‑oriented nodes.

Simon exited its remaining Authentic Brands stake in Q1‑24 for ~$1.2 billion, while SPARC combined with JCPenney to form Catalyst Brands, reducing risk and clarifying exposures. The board also maintains a $2.0 billion repurchase authorization and has been raising the dividend.

Track record is strong, though retailer platform investments have introduced episodic volatility.

Chairman/CEO David Simon has a decades‑long record of disciplined deals, opportunistic refinancing and steady dividend stewardship.

The 2025 proxy shows meaningful insider alignment and the long‑standing Class B framework, giving the Simon family a limited ability to elect a minority of directors; combined with an independent majority, governance is balanced. Execution through multiple retail cycles earns high marks for operating excellence and capital discipline.