Simon Property Group, Inc. (SPG) Business Profile

What it does

Simon Property Group is a real estate investment trust, or REIT, that owns, develops and manages shopping, dining, entertainment and mixed-use destinations. Its properties include malls, Premium Outlets and The Mills. It leases space to retailers, restaurants, entertainment operators and other tenants, and also manages properties for fees.

The company was founded in 1993 and is headquartered in Indianapolis, Indiana. David Simon was chairman, chief executive officer and president as of February 25, 2026. By the third quarter of 2026, Eli Simon was identified as chief executive officer, president and chief operating officer.

Simon holds its real estate and other assets through its majority-owned operating partnership. Some properties are owned in whole, while others are held with partners. The company also has interests outside its directly held property portfolio, including a stake in European shopping-center owner Klépierre, retail operations, an e-commerce venture and real estate investment and management company Jamestown.

As of December 31, 2025, Simon owned or held an interest in 212 income-producing properties in the United States and 42 properties internationally. It also had redevelopment and expansion projects underway at properties in North America, Europe and Asia. These projects can add space for tenants such as restaurants and larger stores.

How it makes money

Simon generates most of its lease income from retail, dining, entertainment and other tenants. Leases include fixed minimum rent, giving the company recurring income while tenants occupy their space. Lease income can also include overage, or rent above the base amount. In the third quarter of 2026, higher lease income, including overage, contributed to results from domestic and international operations.

The company also earns management fees through its management company. After transactions between Simon entities are eliminated, those fees are typically based on the revenue of the property being managed. Its ownership interests in properties held with partners and its other platform investments are additional parts of the business. Those investments include interests in retail operations, e-commerce and real estate investment management.

Simon seeks returns from both property operating cash flows and appreciation in property values. Its leasing economics depend on the rent agreed with tenants as well as spending to bring them into a space. For new leases signed across U.S. Malls and Premium Outlets in 2025, average annual initial base minimum rent was $65.09 per square foot, and the average tenant allowance was $63.92 per square foot. The allowance is money provided toward a tenant’s space.

For 2025, portfolio NOI increased 4.7% compared with 2024. In the third quarter of 2026, real estate FFO was $1.28 billion, or $3.37 per share.

As a REIT, Simon must distribute at least 90% of its REIT taxable income. It regularly accesses debt markets to finance acquisitions, development and redevelopment and to refinance maturing debt.

Customers and how it sells

Simon’s direct property customers are tenants that lease space, including retail stores, restaurants and entertainment operators. Their customers are the shoppers and visitors who come to Simon’s properties. The company also manages properties and has interests in e-commerce and retail operations.

At December 31, 2025, its 212 U.S. income-producing properties included 108 malls, 70 Premium Outlets, 16 Mills, six lifestyle centers and 12 other retail properties. They were located in 38 states and Puerto Rico. Its 42 international properties were primarily in Asia, Europe and Canada.

Simon also owned a 22.2% equity stake in Klépierre as of December 31, 2025. Klépierre owned or had interests in shopping centers in 13 countries in Europe. Simon’s international strategy includes partnering with established real estate companies and financing international investments in local currency to reduce foreign exchange risk.

Tenant demand in the third quarter of 2026 came from established national and international brands as well as emerging concepts. Simon signed nearly 1,200 leases totaling over 4.3 million square feet during the quarter. New deals represented approximately 25% of the total square feet leased.

Suppliers and costs

Simon’s costs include property operations, real estate taxes, depreciation and amortization, and interest on borrowings. Property operating expense increased $51.2 million in 2025 as a result of acquisition and development activity. Depreciation and amortization also increased, primarily due to acquisition and development activity.

The company incurs costs to develop and redevelop properties and to prepare space for new tenants. Tenant allowances are part of the cost of signing new leases. Simon also faces potential construction delays or higher construction costs from tariffs, trade disputes, supply chain disruptions or shortages.

Because its assets are long-lived, Simon’s financing strategy relies primarily on long-term fixed-rate debt. Its effective overall borrowing rate on consolidated indebtedness was 3.87% at December 31, 2025. Floating-rate debt comprised 1.1% of total consolidated debt at that date. During the third quarter of 2026, the company issued senior notes and completed secured loan transactions.

Simon and its affiliates employed approximately 3,600 people at properties and offices across the United States at December 31, 2025. The company maintains relationships with suppliers, but no individual supplier or sole-source dependency is identified here.

Competitive position

Simon competes for tenants and for sites to acquire or develop. Its alternatives include malls, outlet centers, community and lifestyle centers, and other shopping centers in the United States and abroad. It also competes with internet retailing sites and catalogs, including channels operated by its own tenants. Simon has identified Amazon as an online alternative available to retailers.

Competitive alternatives can affect both Simon’s ability to lease space and the rents it obtains. Retailers can choose whether to open stores and where to locate them. Simon identifies property quality and location, tenant mix, operating expertise, tenant and lender relationships, and marketing initiatives among the factors that make its properties desirable to retailers.

Our reading: Property locations and tenant mix are potential advantages, but their strength varies by center because retailers have other physical and online options. Our reading: Simon’s relationships and management capabilities can support leasing and redevelopment, although the available evidence does not establish that those advantages prevent tenants from choosing competitors.

In the third quarter of 2026, occupancy at Simon’s malls and Premium Outlets was 96.5%. The company had redevelopment projects underway across its platforms, and its share of their net cost totaled $1.2 billion at the end of the quarter.

Growth opportunities

Simon seeks growth by improving the profitability and operation of its properties and investments. It expands or redevelops existing properties when it believes the investment meets its risk and return criteria, and selectively develops new properties in markets it believes are not adequately served by existing retail properties. The company also reviews acquisitions for their ability to enhance its portfolio.

In the third quarter of 2026, Simon’s share of the net cost of development projects underway across its platforms totaled $1.2 billion. The company expected to break ground on Sagefield, a new development south of Nashville, and expected it to open by the end of 2028.

Simon also agreed to acquire University Village, an open-air retail destination in Seattle. The company expected the transaction to close in the fourth quarter of 2026, subject to customary closing conditions. Simon sees opportunities to work on leasing, operations and future expansion at the property.

Leasing is another source of growth. Through the third quarter of 2026, initial base minimum rent per square foot on new deals was up 17% year over year, while tenant allowance per square foot was down 10%. Simon said its prospective deal pipeline was ahead of its level a year earlier.

The company has also begun signing contracts for Simon Media Network. It intends to use its digital presence, customer database and physical properties to help drive visits to tenant stores and to work with companies outside its retail tenant base.

Structural risks

• Retail tenant health: Simon’s primary revenue source is retail tenants. Consumer spending, tenant creditworthiness, bankruptcies and tenants’ ability or willingness to pay rent can affect occupancy and lease income. Supply chain disruption can also impair tenants’ sales and operations.
• Competition and changing shopping habits: Greater use of e-commerce gives retailers and consumers alternatives to physical stores. Competing properties and online channels can affect Simon’s ability to lease space and the rents it obtains.
• Debt and refinancing: Simon has a substantial debt burden and regularly accesses debt markets. It may be unable to obtain financing or refinance loans on favorable terms, or at all. Higher interest rates and financial covenants can affect financing costs and borrowing capacity.
• Development and property exposure: Projects can face construction delays, higher costs, approval requirements and rents or occupancy below projections. Properties are also exposed to natural disasters and potential environmental liabilities.
• REIT and joint venture constraints: Failure to comply with REIT rules could result in penalties, corporate-level income tax or loss of REIT status. Simon also has limited control over some properties partially owned or managed by third parties, which can affect its ability to sell or refinance them.

Leadership

The Simon family are significant stockholders in Simon and/or unitholders in its operating partnership. Transactions between the company and the family require Audit Committee approval, and at least three-fourths of independent directors must authorize a sale of an operating partnership property.

Bottom line

Our reading

Our reading: Simon is a property owner and operator whose business rests primarily on leasing retail destinations and maintaining their appeal to tenants and shoppers. Its properties, tenant relationships and redevelopment activity support that model, while online alternatives, tenant health and the need to refinance debt remain central exposures. The company can pursue growth through leasing, development and acquisitions, but those investments require capital and depend on tenant demand.