SPG - Earnings call transcript Q1 2022 | Simon Property Group, Inc.

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Operator

Greetings, and welcome to Simon Property Group First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. President, Vice Senior Ward, Investor Relations. Tom ahead, go sir. Please

Tom Ward

our on all Thank Litigation factors detailed call of only XXXX, date. safe this be this us be Officer; And and within SEC measures filings factors. directly President. as is financial to today’s you Chief the relating call the most Chief and Brian Both website X-K may statements you quick actual you, today’s that thank made harbor We supplemental the for differ to Also and evening. available reminder Officer Please refer Officer. for of at the includes information Simon, Adam discussion Chief and to our the information on forward-looking note joining call measures materially Financial risk statements of other accurate Chairman, are during forward-looking risks, a McDade, deemed Peter. this Reform of Private David Executive may release results press the the investors.simon.com. Accounting today’s statements. are Presenting A the variety Reuille, those that that of information a Reconciliations comparable release filing. supplemental to are Form Securities release on of in and within uncertainties, call the IR and Act the may non-GAAP included due press GAAP meaning today’s and press of

will to hour. limited one be Our this evening conference call

that you Simon. to to our to participate question. introduce in David For question-and-answer limit I’m those we one request the like respect who ask pleased session, please yourself to would

David Simon

quarter I’m results. first our pleased to report

a prior operations in or were mark-to-market securities. of quarter to fair from $X.XX $X.XXX share billion First non-cash of value held unrealized funds publicly loss a per $X.XX from

quarter. had operations domestic excellent an Our

posted impacted U.S. negatively strong from the quarter, results dollar. Our international surging the operations in despite being

and recorded first feet are increased fourth The rent of the was portfolio. compared compared lowest our to leases $XX.XX. to XX% portfolio other performed the seasonally last average quarter-end, significant basis five year-over-year NOI of $X quarter the NOI occupancy had of platform an basis cash square at signed the years. period. fourth more the of our a across And than first mentioned property quarter XXX in high year-end continued results year X We in was occupancy for I also prior free portfolio in decrease pleased very from flow increase quarter compared billion the quarter generated the investments. in XXXX. more million X.X% the was XX in properties increase terminations our Leasing minimum in a well, X.X% points number are and momentum to We quarter of number with increased Domestic We quarter end XX.X% an the of growth leases prior points and base the XX.X%, the pipeline. the to to international of compared year the for and tenant as only at than XXX driving was TRG our quarter,

square we deals worldwide in were interesting the U.S. record reported volume reached place U.S. per XX% first per in and at foot foot, strong the the year-over-year, tenants Mills, which In year-over-year and per demand with for and in restaurants, mall our retailers the up increase. and which overall, reported for feet. the per a and XX% was fact, foot, approved entertainment operators, the quarter be. XX% we square for combined of continued increase. XXXX a recently at portfolio quarter as brands, leasing approved to committee, another the TRG square as square for most from XXX square and approximately the is is very volatility deals the $XXX recent XXX was great Demand our we Sales sales deal momentum new have sales view X since retailers, outlet the increase most X,XXX world, retail mall representing our first foot XX% million

lowest occupancy had Our cost the is in that seven years. we’ve

has Reebok a SPARC are also with incur net Remember is in things J.C. to we on line liquidity its in our to refinancing no quarter, performed and planned ABL, integration the of SPARC of credit strong aspects pleased the and than we Group We and great of better operating investments at performed financial Penney’s it same for strong its better also which first SPARC is than and losses for the expect SPARC, cash in with is this $X.X and completed platform position the positive fact, brand. Reebok say SPARC I J.C. position due transaction, transaction. anticipate the recent other results Penney. U.S. from the like billion XXXX, position. the including iconic it in Penney planned. can of borrowings the quarter.

House and our an customers. however, became which above Holdings, reopen companies the volatility, we market and last both fully generate of bases unrealized fit high quality of with Life During with these our quarter, overall unique public value businesses were believe our they as investments $X.XX by investments will are These companies, and reengage in mark-to-market. flywheel that at driving the their impacted year Soho Time end non-cash

in credit at fix facility. the used outstanding completed our dual senior on our very X.XX%. billion, rate to On amounts offering we $X.X Early the notes U.S. sheet proceeds pay tranche off we net a that year, totaled balance timely, front, offering the a including XX-year

$X.X as at in today, now. $XX company, dividend liquidity dividends than billion. refinanced the mortgages paid for announced second seven quarter, $X.XX Today billion average of interest our June billion X.XX%. a The year-over-year per will of a on for years our total rate of more billion also we payable public stands declared a We an our we dividend share at $X $XX XX%. increase our over including of be XX, And dividends

stock XX Directors to become and multiple real relative stock, future value to today of $X our closer the look on our today at an approximately see authorized times, of we repurchase at growth stock We FFO that and valuation substantial effective an times will common up When new the has assets, historical a X% opportunities. Board in rate our valuations our cap of we given our in to May particularly that billion belief of XX. for conviction also our applied for XX around program announced estate

strong, advantage cash our significant provides flow to warrant for us the continues adapt countless flexibility we Our conditions us balance as be have a sheet times. while proved and generation is with to as

and announced the in mind, buyback thoughtful be dividend today. addition We more than the our on and in will this in keep to we XX% opportunistic is increase

does for at share, $X.XX Now, year range the mind an that that in to I This of year. keep the of comes loss are and dollar that top the our our to or an from of the year, at the compares of which $XX.XX comparable our given of bottom guidance we in and per midpoint. comparable occur the previously outlook number XXXX the $XX.XX fair share guidance FFO our strong the is rising the increase $X.XX or increasing end of mentioned please gain rest increase investments interest include This this remainder on of and mentioned not may last at $XX.XX X% U.S. to increase per the face year unrealized value rates. full $XX.XX to $XX.XX a

conclude announced Tenant results. internally to buyback our we today And conclude, think first reinforces our real inflationary primarily is my comments. just our Ready that growing Now, questions. I’m results with authorization that quarter operating are is great demand times, and a I and our for platforms estate our organically pleased hopefully existing focused and hedge stock excellent. will

Operator

this we At Our be go will Goldman conducting Sachs. time, a [Operator first you. Please from Burrows ahead. Instructions] question-and-answer is session. with Caitlin question Thank

Caitlin Burrows

know good slightly the but be current given and the guidance, midpoint. give the which Maybe just in the was on increased too everyone, Simon volatility of pieces, macro the don’t not may like or evening. Hi guidance many to may at I impacting uncertainties, you market

I wondering detail what’s on of relevant. versus and interest that surprise, upside your some occupancy, could initial performing sales, if most rates, offsetting some give takes, ahead expectations of you maybe the retailer puts of So leasing, what some was might everything’s what be

David Simon

and I is mean right. a market the for Sure. going of our just results, very you’re on lot but totality our in go better it’s focus Caitlin, a detail don’t there’s we better we through and what’s on think is, company we big the to simple. The are reason

plan. are That’s NOI that we projecting one. better And exposure floating is is which operations, than rate trending be importantly, to better our be properties offsetting our other growth Our some retail retail only than have to the Most debt. our is negatives that to plan. are property number

any end for really, any is have environment. we’re outstanding. a real do And strong We’re table commercial really great. demand do don’t the the back it very, paper the get demand But I not probably when for – very don’t away, we we pound to our carried impact primarily other dollar, is purposes. estate on our here then obviously have has want some. rate companies, except foreign tax we meaningful but which – have that that interest the a of far more line dollar sometimes lower outstanding than we do is But at we bring We $XXX much don’t low we at good. have earnings, million, rising we so but too don’t

lot NOI the the ultimately had. on of what excited our pinpoint very that we our of on sales folks leasing sales some in come that on our because that. have because comfortable to give that concentration and that very COVID the volatility a a feel amount here can than of there’s they’ve are And try mean will and will but high I that impact property and I we you end better anticipated, we out tenant obviously is restructurings exactly leases our we cannot of range results, produce. where Our

Caitlin Burrows

it. that. Thanks to Got

or so think there. suggestion the question, guide I is I’ll one stop

David Simon

to You’re the rules. very follow kind

you. Thank Okay.

Operator

you. Thank

with ahead. go is Please Stanley. from Rich question Hill Morgan Next

Rich Hill

was quarter, well. be from been it’s Hey, the slightly a entities good to lead We in I’ll David, the the quarter Hey pretty as it number Caitlin’s to income unconsolidated XQs, healthy in modeled past try conservative. evening. negative. this negative rules and follow follow

if your for how actually out? you versus played So I’m us wondering maybe entities what through income can consolidated it just walk expectations were

David Simon

might paper I’ll walk to be X-K to it’s Sure. you to together, piece it not through over know you to of put there that, in a through for walk yes, I the you. turn guys Brian us, actually that to confusing you but because

will So help. it this hopefully over. Brian, take

Brian McDade

Hey Brian Rich, here. Hey,

we additional entities. disclosure add So to our to some our an breakdown unconsolidated supplement did from income

our As can changes, see venture in on the international the our you open joint of the driver property performance including side, portfolio, our remarks. which of David highlighted activity

David Simon

than last international Yes. of year, more remember, And was a the U.S. portfolio. suffering really from lockdown

Rich Hill

a to allowed if I am rules? And the I it. to Got follow ask follow-up were question

David Simon

Sure.

did to politely, So hopefully it ahead. – you’re go if happy so we’re and gentlemen, you yes, ahead. Go

Rich Hill

of to this in $XX.X question, offline, a Brian, you actually excess as to investment. did to I’m but sort quarters back but to out amortization the that it given compared advance a – take million the… trying I’m including prior well happy number the and prior TRG, negative What clean reported dumb TRG is how quarter of just answer of for sorry

Brian McDade

excess The primarily of for our investment from the $XX Tobin – purchase. million the was

net So is income, this remember, Richard.

David Simon

Yes.

that when life has over So nothing obviously, we to market cash capture investment put value flow. to it have you then things, and to its with do amortize we you –

Rich Hill

Okay. We Brian. can catch up Thank you. later on

Brian McDade

No problem.

Operator

you. Thank

from is go Derek Deutsche question Bank. with ahead. Next Please Johnston

Derek Johnston

Thank everyone. Hey you.

or guess, contribution $X.X Just, when Q. around platform NOI last look this was I retailer one the But I the think year, it’s quarter get from $XX It investments. on in at the I first I was other contribution million NOI I million. versus think it

this between walk wondering if drivers you last and quarter maybe the and just through could year. the So Delta us

Brian McDade

the is specifically, change in quarter our in year, in investments better the the quarter last were to U.S. And first out There first was this the Derek, still there still throughout relative definitely year. lot retailer the year. a still simply California of last of performance of closures world. of volatility

just simply the retailer of is performance driver the out So investments. better

David Simon

want don’t It’s confused. good you so way, have you performance. just by the news, I just It’s better good to be you, to – Brian. Thank always

Brian McDade

Okay, thank you.

David Simon

performance. just to Okay. want in Yes, to I It’s it put perspective. have good better

Next question.

Operator

Thank you.

Evercore with Please from Khanal ISI. Our Samir next go question ahead. is

Samir Khanal

is environment leasing David, strong. clearly everybody. evening, Good very the

it’s You Thanks. on outlets trends maybe if of wondering the feet. – you’re portfolio, whether talked or But about the in X sort million color the I malls that seeing could pricing square or mills. was provide the you the the

David Simon

– position the today we say have think say, to but that last it hokey, Yes. create you fair are we this I But would a than generically better couple win-win. look, for the I to were and a deal when is we negotiate what years. in us sounds

ability think we’re So fair we what are the news we value. is done. seen cost, deals getting And get to given retailers occupancy the absolutely are market our the is – good

that win-win. happy finding we’re So

Samir Khanal

Thanks, David.

David Simon

Sure.

Operator

you. Thank

Our McGinniss ahead. go with Greg next from is Please question Scotiabank.

Greg McGinniss

Hey, good evening.

from X.X%. So increase David, leases, substantial X.X% there month-to-month in was a increasing fairly to

what for Just the opportunity those were to is leases? maybe potentially curious what there longer-term the leasing primary and drivers

David Simon

are have big rushing that in properties really to thoughtful a that fact And the time and we seeing. is account these do, that’s it to seeing the we doing retailer for are and but you’re – good that what think really you’re manner, we’re not really get important our what I we taking leasing Well, some because done.

last taking kind a I I year to rush a whereas those and to, the strategic approach win-win the – might we’re have get year seen that up more or before, in to door, talked earlier. So mentioned you signed create of the the

strategy part QX. really be question of and our – way without down it’s my anticipation that So will number it’ll the for

Greg McGinniss

Okay.

long-term those leases. for this and all but during so increase, to just negotiation loss a phase shifting So of kind no of more is expectation tenants

David Simon

that that of more deal Absolutely accounts, on our a of so issue not. right decision there. larger to the kind we get have side our with of some was no And national

Greg McGinniss

Okay. Thank you.

David Simon

Sure.

Operator

you. Thank

Please ahead. Next question is from Mizuho. with Haendel go Juste

Haendel Juste

I Hey, good capital the to ask is. guess, you stock wanted where about, allocation Dave, price evening. I given

out you valuation the Now put discount.

to the guess, I some seller a answer, there, malls. now? in consider As buy good pretty about market. are back There rumor you be the debt you how very And acquisitions? large stock same you would then thinking is out

curious just Thanks? would be So some. of a any under you scenario, buyer of

David Simon

to it’s I because our said want I authorization buy we we mean, as because stock under-valued. Well, you got back Sure. earlier, the we to think

that really the is to can’t market. can into market to So I note this you we don’t okay. reports and But that because the there stuck technicalities the expect I that’s or the really dressing, all any window like believe out in to please of comment M&A. on And the us be get caution say until on would concerning not XX. suggest I don’t rumours to would throw activity, I media But I our all M&A

We’re to I stock obviously, has – And last the if stock an internally. it’s focused in really really, think you, – the given we’re want buying prepared remarks, of what my said said opportunity of performed couple see months, where over to on our of that back. be we we I mean, our terms are opportunistic listen very kind able I see to to on what focused to front you you’ll

how kind look again, at of that’s I that’s mean, So I of kind things. –

what or believe out don’t you there. So rumours any read

existing We’re lower of price advantage really focused platforms growing on and our stock the represents. our opportunities taking that

Haendel Juste

Thank you. Great.

David Simon

Thank you.

Operator

you. Thank

Our with next question from Sandler. ahead. is Piper go Connor Please Mitchell

Connor Mitchell

Hi. Thanks question. my taking for

could So rent please if different are the all? now in and what of current tell us tenants on at percent tenants deals you how performing environment are those percent

David Simon

single percent weeks. of have shop one of our every I our of aspect to kind and don’t of mean, stores some our not I has percent I mean, our a all one do – retailers rent the retailers clause, But big rent some of usually not. every small department boxes generally them.

we’re with on say general so impact high the we There need out two, for so a inflation in unfortunately global number consumer it so not can as economy. higher everything in do we a that’s better, of And slowdown and consumer. world of the we’re our out in uncertain kind the inflation we a from bit so an little income issue a to any just seeing look and I on far, far, figure lower – as you figure the deal seen folks, are But that’s slowdown. So, what But a lower to environment would may income not have number huge one. the portfolio. percent, far income terms the the obviously, how to to country, is not we be

Connor Mitchell

Great. Thank you.

David Simon

Sure.

Operator

Thank you.

Our Bilerman next with ahead. Michael from question Citi. go is Please

Michael Bilerman

technology which wondering Great. the internally, obviously Thank know the if choppier. us moving that there, you. towards you was front, of investments the activities David, a a are bit time lot little environment But out this this you update bit just have of still portfolio. talked you’ve of years. in you sort further little obviously and or sort for time to planting of that tanker can market’s you SPAC on about terms – technologic of a out for I a the macro what lot spending external seeds investments. much gotten of number coming little how of retailer a opportunities I a leasing been those

David Simon

Michael, And deal probably has the chance increased have at the raised – that I confidence we have volatility out. think after do time the clearly that given there’s think But really SPAC we SPAC. market SPAC opportunity clock smart the not companies. a confidence running set we SPAC top. the the enough even market to still been at opportunity. the existing will with would’ve have were I public a in mean, we good And our a find a I good we still

say to that. investors And is Simon I that recognize for immaterial this remember, Group. our that. hopefully want So But obviously Property in

earlier, focused we the internally. on to external So are mentioned front, really now, you right I

of still in of investments. has EBITDA. on we – its don’t we board. Penney And redevelopment Lots to of Those fund platforms be we’re SPARC from is dollars hundreds self-sustaining, making that those is the have Now those. in have Penney the we’re of our existing making investments drawing in portfolio. of technology, will millions all investing entities, come They’re

of to I funding or either of on or of there’s it’s now But add right is themselves. existing focus what our look, see to allocation. we some shareholders right mentioned maybe you for capital one one I bolt-on they’re book here or now properties if think is our capital grow I there, allocation the But business. to So interesting an And our our see before. or investments,

Michael Bilerman

just a for think granted, sort as the I XX just value five to $XX Simon follow-up, you’ve to terms million the it value mid-February, others in Board just think senior understanding David, about these the was of The to of investments made. it investment of little and I all in, I back ABG. executives. in And for a think more like was bit shareholders successful

more I out step But money, for capital. at Simon exchanged Now, made back, paid you of much the bit, stakes, just haven’t recognize the sort executives? how investments which can then invested of these share to have a the level, maybe cash you’ve you Board you’ve little least made to group at

David Simon

Well, going I call. this don’t answer even talk comp not know how on Michael. I’m about that, to to

your you If to that to happy would comp to we’re arrange one are our of like talk Chairman, investor, an directly. investors for

referring to institutional for moonlighting shareholders the at and did, and any And we’ll we’ve in kind now. rationale were made Committee I thanks what is move leave we Chair think of investors they from our but on for And what your that, – I’ll available is, that was but question. on on activity, $X billion our ABG it to investment. that you’re Comp

Michael Bilerman

we just what Okay. got Yes. math asked been – [indiscernible]. the We’ve was

David Simon

of set with said, up any you, Committee. like than Chair Thank I phone Michael. Comp institutional we’re – investor, our to our more a call We’re happy

Michael Bilerman

Okay. Thank you, David.

Operator

Thank you.

with from Our Vince ahead. Street. question is Green Please next go Tibone

Vince Tibone

good Domestic based quarter, the growth marginally NOI growth NOI be year the the implies last Hi, X.X% NOI for the remainder guidance on in to afternoon. growth positive property you’re X% which quarter. was up gave you first of expecting only

the year? bumps contractual rent are factors you and occupancy for the each what year-over-year given negatively experience the that impacting rest growth the quarter, rate of should gains Just

David Simon

don’t I guidance that. question, at year. gave appropriate the – completely it’s and – a for again, Well, of thank you we guidance, NOI We the I beginning

outperform – be outperform initial I to don’t always have variability overage today, XX overdramatize the know again, confidence little and to We it. have year. are Obviously, it more don’t we I to based ago, always little that and our update a the I we than what of hope that did have trying we’ve during guidance. because this, upon But conservative, We a we’ll then than variability want but structured. more we rent maybe we maybe years

see actually it And to we variability. create – our a expect I that’s only and outperform, working outperform thing to throw it What – without diligently think more uncertain initial an we out the expectations, extremely but don’t now, that’s to a it wind. caution only structured we’re smartly smartly, pretty doubt. it world, the is that’s we’ve update but we does our some it’s little but and property to NOI there

Vince Tibone

conveying squeeze because I spreads get in years given variability mean leasing be are think at made is or Because just negative really may how guidance longer just just a I the we I because spreads is of what – a should of releasing think to point, quarters the on that… the to disclosure – But kind few out to of your useful was is figure away But you or it information. just – ago, implying think expense ton it here? portion. I’m took no a sense, trying like get is, follow-up. I about the which leasing I’m trying could If economics pullback that I what

David Simon

get you – don’t was what we – rents did. everybody doing did we’re no look, want off. – I to to interested better we the get sales we boil in it. Again, really part of does down really tried the cut one we seeing really it equation. do not spreads the Vince, if we into And you anticipated. seeing mean But Yes, to It didn’t to way I’m sorry, this, I to are than is the It’s and

the you get that really manifests way the kind NOI. And want of really itself everything, it’s don’t really you with different, are. read what important. is expenses, what occupancy. spreads It’s I – but portfolio is, it rent sales-based comical et to operating whatever. is If see it’s Words not overage and are rent, Point cetera, footnotes, our into it, rent,

firming. are rents Our

Our – quite the that’s last we’re if of do pain just a overage to just of and space, you year. through was And don’t because as like be lot spreads being positive would excited again, start. are really really and year, cautious, a went a years. can space we basically our off we’re in the if good We last know exciting this couple we to little why because but

Vince Tibone

That’s helpful. Thank you.

color. Additional

David Simon

, Thank Vince. you

Operator

Thank you.

question Mueller Mike ahead. next from JPMorgan. go Our is Please with

Mike Mueller

the Yes. I’m beginning the the pace years has magnitude next of since view for curious, few year? about occupancy the or meaningfully your the thinking on recovery of the changed

David Simon

we’re if happy you, thought the question, the to the occupancy understand where clearly that to of prior upon your And we of were based year, occupancy hoping our say really and where think would kind I pace think, I to at would are get we I I’m of we up ahead I be. COVID. we last accelerating to

turned call, I ain’t long kind of until they’ve working. group in we’ve level like at a over They’re we until a I energetic. the mentioned pretty until over, and lowest of issue, to demand that added time I think in And assuming, and we macro, are on talent we’re think but organization. think, have our don’t our it’s here. And our we’ve last good rent, tours good recovery a reasonable. COVID away. I we’re retailers committee, year’s I signed, or just, Ukraine or be I’m it’s portfolio lot paper here. they’re than looking be in restaurant the I And it pretty but operators, continue and because I we They’re been it’s is is, more a it’s I new had the underestimate play don’t entertainment Europe is a mean over, leasing lockdown, mean again first – continue not for and until in relatively we’ve worldwide grinding at which deal them, good. group. but underestimate So lease don’t a there need, market the a leasing domestic They’re I things – month obviously results, China, really to South our the is mean, as tough you were terminations but our got and interest piece spot, America’s feel I got of to that not flat. But the think long, get the of rambling

U.S. China. And for it’s were worldwide the retailers was the ago. That domestic. so It the is here, in not is the happening growth mine We at top of three, four years

exciting. that’s So

Mike Mueller

it. Got

Okay.

of the really hasn’t like that past derailed at couple sounds months it So all?

David Simon

all. at Not

Mike Mueller

you. was Okay. That Thank it.

David Simon

Thank you.

Operator

you. Thank

Tsai question Jefferies. Linda next ahead. Please from Our with go is

Linda Tsai

thinking Hi, the investments? What’s for good retailer the SPARC platform? of best within distribution afternoon. and maximize visibility How these about your the are channels various you to brands way reach

David Simon

physical Well, they love still stores.

I look, brand each think if think – different. I is I

it’s wholesale Bothers Brooks wholesale it’s is with but e-commerce combination and physical a very important. stores, Nautica and the Arrow, is stores the with So stores. of business e-commerce,

Forever XX, of its to big the That’s stores differentiating really has compared are important. it factor peers. the some

business. via needs e-commerce hand, On improve the other to it

had on for but let’s just it really stores world, our business, internet within everybody we’ve no mean, we less I brands we’re not the when since e-commerce, or forget brand, said what is generally every, there’s performance but essentially on brands, of seen seeing I physical depends the SPARC, the stores, out out different what So retailer. the out and every are really in COVID, think, performance, don’t And performance underestimate. COVID not and it way that’s across

Linda Tsai

as And distribution then fit how channel? a there does in JCPenney

David Simon

their I their business. mean, Well, e-commerce stores they and have

I store improve think And business the their think well. over I doing is time they’ll e-commerce.

Linda Tsai

Thanks.

Operator

Thank you.

next Our Smith of America. Please with go ahead. Greg from Bank is question

Greg Smith

ICSC the are been David, XXXX expiring in rents working of at what primarily thanks. leasing addressed? Yes, convention? have you XXXX And percent on

David Simon

Well, we missed part the would, call. earlier think I again, you of

we’re So lease XX%, a of may them this get lot And a I to open, we business, QX, of end are will ICSC XXXX at XX% on combination you in the at for be year, combination, you’re this probably would some the focus the say activity for a finishing deals, I business. then be in opened doing a doing XXXX. new primary to of more assigned all I’d focused range well, by XXXX. XXXX of think but leasing lease but say on And point of now really our

Greg Smith

Thanks. Great.

David Simon

Thank you.

Operator

you. Thank

is Our next Sanabria Please from Juan Capital ahead. go with BMO question Markets.

Juan Sanabria

for thanks Hi, time. the

about to the of company estate real in bit idea what Do investment see and wanted the estate would interesting, changes know Or but a better Simon Just of malls? talk more investing I to behaviors? in external. opportunities kind you real press, there be withstanding. the high-quality to out center of given we’ve interested not not opportunities some is listen looking seen what’s or the COVID said shopping more you maybe little in at consumer with

David Simon

– business indoor, our that’s doing policy. I mall our I is don’t Well, the great. – mall mean, mean, I versus outdoor

be center. Galleria. be carried of can an use. one, a could Houston could It hybrid, like could and It would get – plan mall estate. estate the could don’t a that’s outdoor and be It So be I say outdoors. It in be big think be to could It good I they you real real mixed physical away enclosed great indoors.

lot retail that know but people I tell will forms. a of of real of forms, way, I estate it spin different a lot in lot can come you, good different a So

we’re – lie not the project I we’re now. just the question there’s think opportunities we’re – Simon answer right not one greatest really – Property Group. pursuing And I that we because earlier, can’t like said the So – within opportunities

Juan Sanabria

And a I just can, if quick follow-up.

You valued on – what you mentioned curious you move the And in your malls do are your around cap think What implied high-quality think cap at rates? given interest your valuations. X%. today, just rate rate’s are thoughts

David Simon

myself. only for stuff mean mean a our selling know Well, I I X% know. speak be cap I I I rate. all. I wouldn’t at can That’s don’t

Juan Sanabria

Fair enough. Thank you.

David Simon

Thank you.

Operator

you. Thank

Goldsmith Michael ahead. from UBS. is with Our go Please next question

Michael Goldsmith

a the updated that then expected equally changes for lot we And Good the consider the through for to But the expectation additional cadence? outlook. evening. touched taking retailer Or XXXX? Thanks a second on the guidance in of question. lot that for is does any my investment David, the $X.XX year, the harder year? what’s or hitting the distributed for half? first in Is $X.XX investments expected

David Simon

Okay.

really is first The the retail on side. not question

We’re come if did I of the understand then question? And anticipating Brian, you on the plan. more second follow. didn’t or in less part they

Brian McDade

repeat Can please? it, you

David Simon

Yes, Michael

Michael Goldsmith

in expected $X.XX Last expected talked of of to quarter, what’s year, you $X.XX additional cadence investment the that? the about

David Simon

I That’s okay. I want That’s – what make to but Yes. thought, sure.

And losses will we. is So QX of – come they, come. gave the operations it – think Reebok kind function you really say, those kind part to should most really when probably a It’s a it’s the come kind a end but we I closed. – SPARC probably the limited or in will then bought if out losses, QX, will But just when operating U.S. the Reebok is number that the at and capped, it’s but – of those of correctly. take I to it’s deal of – certain we remember QX. of that that’s SPARC QX, incur losses February, Certain of operating They of event. I they’re not progress in out know operating it concurs. work it’s and hold. of

Brian McDade

Got to ramp up, Michael.

take time. to bit – got have So to actually the so a going of cost they’ve the to incur just little it’s

Operator

you. Thank

Our Dijkum go Point]. next Floris question is Please [Compass Van from ahead.

Floris Van Dijkum

my occupancy cost touched for your is David, question. the you low. fact that maybe upon Thanks taking

your get just – quickly COVID share view? occupancy and back prior will to how kinds levels what of cost could And you occupancy you was in you can those also, to that cost? If your

David Simon

Yes.

you our it So no, right No, now get was the in it? Anyway, was the I kind What is was – higher – it was XX% it COVID. that. the give thought – no, of higher we’ll was than But high was What That number than range. it? we’ll pre-COVID, was that. the you what where XX%, number but before XX.X%.

Brian McDade

change. XX and

David Simon

market be XX our that is leases for the and at can’t you same fortunate retailers they’re I And to market. a stores. up and our in to us yet, change. of long to But and take business, And it’s just the function able it to we rents too. it’s mark time, going grow profitable look, tell our marking how can

to we’re So what trying that’s achieve.

Floris Van Dijkum

over presumably, you be Great. of anchors, well. couple follow-up have quarters. could of get which Obviously, a right And you to What And lease And occupancy. if slower I as online. the is that can leased see space next do maybe some cited your how the leased that occupied gap between be space trending and could now?

gap steady? over that next months? Or be do always So going to is you expect to narrow – that remain XX the

David Simon

think but trends the right moving numbers the the Tom in can later, I direction. I both are exact mean in give you

Tom, the So will good have think the moving like the you two actual direction. but in numbers, we right a that gap And market get in between both to narrow. I now are the

Floris Van Dijkum

Thanks. Great.

David Simon

Sure.

oh, I go think sorry, sir. – ahead,

Operator

the Ladies question-and-answer Simon David back to session, turn the and gentlemen, for Mr. reached closing the like end we of have and to would remarks. I call

David Simon

Okay. few Thank of some in next we’ll you and see Thank you. the I’m weeks. you sure

Brian McDade

you. Thank

Operator

Thank concludes This you. conference. today’s

disconnect may at your your you participation. Thank lines time. for You this

Simon Property (SPG) 10 May 222022 Q1 Earnings call transcript