Simon Property Focuses on Retail After Steady Leasing and Occupancy in Q3
By Isabelle Durso November 1, 2024 2:30 pm
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Simon Property Group saw increased leasing volume and occupancy rates during the third quarter of 2024, allowing the company to focus on its retail portfolio.
The firm, which specializes in retail centers across the world, reported earnings from operations of $1.07 billion in the third quarter, slightly down from $1.09 billion in the second quarter and $1.2 billion during the same period last year, according to Simon’s third-quarter earnings report released Friday.
On the bright side, the occupancy rate at Simon’s malls and premium outlets was 96.2 percent by the end of the third quarter — a 1 percent increase from 95.2 percent during the same time in 2023, the report found.
The company also signed approximately 1,200 new leases this quarter, including 75 new luxury deals covering 208,000 square feet, Simon CEO David Simon said Friday during the third-quarter earnings call.
“Our job is to continue to improve the merchandise mix at our real estate,” Simon told investors. “We’re seeing a lot more interesting and better retailers that are interested in our portfolio, so we need to take advantage of that, and that’s the focus.”
The base minimum rent at Simon’s malls and premium outlets was $57.71 per square foot during the third quarter, an increase of 2.3 percent from $56.41 per square foot at the end of September 2023, the report found.
A lot of Simon’s momentum this year was due to the “successful openings of Tulsa Premium Outlets and the expansion of Busan Premium Outlets,” the CEO said in a statement before the call.
Tulsa Premium Outlets in Jenks, Okla., opened in August with 338,000 square feet featuring various retailers and amenities, while Busan Premium Outlets in South Korea opened its doors in September with 184,000 square feet for fashion and sports brands, as well as restaurants, according to the report. Simon owns 50 percent of the Busan outlet mall.
Simon also said during the call that the company is planning to take back department store JCPenney’s space at the Fashion Valley Mall in San Diego for a $500 million redevelopment.
Plus, the company has approved a deal at The Shops at Clearfork in Fort Worth, Texas, to build a new retail and office center, where Wells Fargo is expected to take a majority of the office space, Simon said Friday.
Isabelle Durso can be reached at idurso@commercialobserver.com.
