Simon reports increases in occupancy and base rents

Al Urbanski
Real Estate Editor & Manager
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Simon endedthe quarter with nearly $9 billion of liquidity and $1.4 billion in cash on hand.

In the recently ended third quarter, Simon Property Group reported gains in occupancy, base rent, and net income—the last a large result of the sale of part of its interest in a fashion brand consortium.

The nation’s biggest mall owner-operator divested a portion of its share in SPARC, reducing to 33% its interest in the company that designs, manufactures, and markets the brands Aeropostale, Brooks Brothers, Eddie Bauer, Forever 21, Lucky Brand, Nautica, and Reebok.

As a result, Simon’s net income for the third quarter included non-cash and after-tax gains of $118.1 million. Inclusive of the cash infusion, the company’s funds from operations hit $1.2 billion, a 9% year-over-year quarterly increase.

Net income for the first nine months of 2023 included non-cash, after-tax gains of more than $145 million due to the partial SPARC divestiture.

As of September, occupancy at Simon malls was 95.2%, compared to 94.5% in the same period last year. Base minimum rent per square foot at properties jumped from $54.80 last September to $56.41 this year. 

Average retailer sales per square foot, however, dipped by 0.7% to $744.

During the quarter, Simon broke ground on Jakarta Premium Outlets, its first outlet center in Indonesia. The company owns 50% of the 300,000-sq.-ft. project that is expected to open in February 2025.

Simon was active in the credit markets through the first nine months of the year, completing 11 non-recourse mortgage loans totaling approximately $962 million, of which Simon's share was $540 million. The company also repurchased 1,267,995 shares of its common stock during the third quarter

As of September 30, 2023, Simon had approximately $8.8 billion of liquidity consisting of $1.4 billion of cash on hand, including its share of joint venture cash and $7.4 billion of available capacity under its revolving credit facilities.