The world is full of uncertainties, yet business remains “robust” and the demand for retail space stays “unabated” at the Simon Property Group.
That assessment came from David Simon, chairman, president and chief executive officer of the Indianapolis-based Simon Property Group, which on Monday reported second-quarter gains across the board and exceeded expectations.
Net income attributable to common stockholders was $556.1 million, or $1.70 per diluted share, compared to $493.5 million, or $1.51 per diluted share, in 2024. Industry analysts expected $1.55 a share.
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Real estate funds from operations were $1.15 billion, or $3.05 per diluted share, as compared to $1.1 billion, or $2.93 per diluted share, in the prior year, an increase of 4.1 percent. Occupancy as of June 30 was 96 percent, a 0.4 percent gain compared to 95.6 percent on June 30, 2024.
“There’s a lot of geopolitical stuff going on, obviously, and a lot of domestic political stuff going on. Tariffs swing back and forth. There’s interest rate uncertainty. You name it. However, you have unbelievable stores that are able to manage that, and retail demand is really unabated,” Simon said during Monday’s conference call with investors and industry analysts. “The physical shopping environment continues to be the place to be.…So we’re quite bullish about what we’ve done, what we are doing, and where we are going, despite all the headlines that are out there.”
In other good news for investors, Simon’s board of directors declared a quarterly common stock dividend of $2.15 for the third quarter of 2025, representing an increase of $0.10, or 4.9 percent year-over-year. The dividend will be payable Sept. 30 to shareholders of record on Sept. 9, 2025.
The company is slightly upping its outlook for real estate FFO, to $12.45 to $12.65 a diluted share for 2025 from the previous forecast of $12.40 to $12.65 a diluted share.
During the call, Simon said he “kind of chuckles” when he reads about companies restructuring, saying they’re going to lease their properties better, manage their balance sheets better, bring in new management. “You’ve never read about a Simon Property Group restructuring. Yes, we had to do certain drastic things to deal with COVID and to deal with the great financial crisis [of 2008-2009], but there’s been no restructuring in this company—only things that have benefited shareholders.
“This company doesn’t need to sell a bunch of assets, doesn’t need to bring in a new management team, it doesn’t need to downsize its platform. It doesn’t need to do it because it’s outperformed over a 30-plus-year period that no one else has done.”
On June 27, the company acquired its partners’ interest in the retail and parking facilities at Brickell City Centre in Miami. Simon now wholly owns and manages the asset. “A couple of more things will get announced this year, and they’ll be accretive,” Simon said, without specifying. “They will add to our platform and we’ll be able to manage them better so we’ll be able to grow our cash flow.”
Asked by one analyst how “mom and pop” stores are performing amid all the macro uncertainties and the tariff situation, Simon said, “Last quarter, I did express my concern about that segment given how tariffs might affect them and their cost of goods. But they’re beating their plans so far this year. So it’s all systems go there. I’m sure there’s trepidation, but I think they’re managing as best they can. The full story, obviously, given the volatility has not been written.”
Another analyst suggested the possibility of an impending wave of major mall transactions. But Simon said, “I’m not sure about whether there’s going to be the huge mall transactions. I think you’ll have other players come in buying maybe not necessarily ‘A’ properties, but a lot of ‘Bs’ because the reality is you can create a nice arbitrage and manage them or lease them and improve them. They are a lot stickier than people believe…despite the media and the naysayers—and that’s not to say there hasn’t been a significant amount of obsolescence—most of them are here today, still fighting a pretty good battle.”
Simon summed up the second-quarter performance, stating: “We delivered robust financial and operational results yet again for the second quarter. Occupancy gains, increased shopper traffic and higher retail sales volumes contributed to strong cash flow growth. We continue to enhance our real estate platforms through development, redevelopment and acquisitions, including the purchase of our partners’ interest in Brickell City Centre, a premier mixed-use property in Miami and its rapidly growing central business district.”
In other second-quarter statistics, Simon reported that base minimum rent per square foot was $58.70 as of June 30, compared to $57.94 as of June 30, 2024, an increase of 1.3 percent. Also, reported retailer sales per square foot were $736 for the trailing 12 months ended June 30. Reported retailer sales per square foot were $741 for the trailing 12 months ended June 30, 2024. While Simon reported traffic being up 1.5 percent, the slight drop in sales per square foot was attributed to assets that are on the northern and southern borders of the nation.
