David Simon

Losing a billion dollars in a year and defaulting on a loan for one of its malls — a partial summation of Simon Property Group’s performance during the low point of the pandemic in 2020 — might’ve suggested another rocky year ahead. 

But early in 2021, CEO David Simon predicted the firm would bounce back, and his optimism, and strategic vision, have proven prescient. E-commerce’s ascension hasn’t killed the mall just yet, and the nation’s largest mall owner has pursued a strategy of expanding, reinvesting in marquee assets and building an impressive portfolio of retail brands, a diverse approach that has allowed it to capture the upside of a retail revival.  

“We bet on our company,” Simon said during a year-end earnings call. “We made the right bet.”

By March, rental payments from tenants had regained their pre-COVID health, and year-end results showed the real estate investment trust generated record-high funds from operation of $4.5 billion, an increase of more than $1 billion from 2020. The final tally found Simon signed 15 million square feet of leases, the highest amount of leasing activity since 2018, and invested in five large-scale domestic redevelopments. The REIT also doubled down on high-end shopping destinations in popular Sun Belt cities, pursuing a $210 million refinance of the Domaine in Austin, Texas, and a $477 refinance of International Plaza in Tampa, Fla.

The firm’s COVID-era bets on distressed assets — especially bankrupt retailers such as JCPenney, Brooks Brothers and Eddie Bauer that were rolled into the Simon co-owned SPARC Group — also paid off; with a clean slate, Simon said they were able to clear away old issues and seize new momentum, and sales were up. And SPARC will now be the operating partner for Reebok in the U.S, growing the sneaker giant’s footprint to 1,600 stores and $5.5 billion in annual revenue. 

“We took a bet that the world of bricks and mortar was not going to end,” Simon said. “So, when we did deal with a lot of renegotiations that came about because of COVID, we tried to make it back on sales because we believed in our business.”