SPG - Earnings call transcript Q2 2022 | Simon Property Group, Inc.

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Operator

Greetings. Welcome to the Simon Property Group Second 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] Please note, this conference is being recorded. the President to of turn Ward, host, now Vice Senior Investor will conference your over Tom I Relations.

You may begin.

Tom Ward

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

David Instructions] this Simon. limited I'm introduce to hour. call X be [Operator will evening conference Our pleased to

David Simon

quarter results. Thank you. Please report to second our

from noncash of $X.X $X.XX share Second per quarter publicly fair prior $X.XX to and or unrealized a billion mark-to-market securities. of value from held were funds loss a operations

the for variances XXXX. QX to of through quarter walk me this compared you Let big

offset and excellent strong contributed short-term growth in Simon quarter operations $X.XX of Ventures $X.XX, of driven Brand growth, Our costs $X.XX. approximately $X.XX and higher TRG performance rental contributed higher and were income operating an of $X.XX. of by leasing partially domestic of had by they

contribution in And feet the XX% year, first associated X basis posted of contributions and significant properties, interest with generated second quarter, Occupancy square months. operations than of The half signed we that generated of headwind from and a strong the and offset Leasing the X,XXX the leases the increased has a $X.XX of year. SPARC. XX% year-over-year the the positive the number expense our X through the year. quarter, this $X.XX rate other of Average within volume. row increase -- international levels. up TRG X.X% and sales $X.X deal We year couple nearly X minimum and volumes and terminations X%. These these portfolio. of activity brands months of included first the across have the tenant quarter were momentum XX.X%. international was of more lower transaction feet property signed of in from Our new of X for base Reebok last at increase NOI, strong X,XXX our XXX we investments, in the costs pressures than sales the costs rent for costs year. that year leases X.X% of brands, --these total at $X.XX. over which quarter has record the include the on first million U.S. million for quarter $X.X This the brands for our JCPenney's average the from a second million the grew to year. increased Domestic more for low from inflationary is for X.X% for the for contributed billion first with We partially have rent increased includes half pipeline. and Nearly platform principally the $X.XX, of quarter the which Portfolio -- base and of $X.XX a months been $XX.XX. higher Mall first third NOI leasing quarter a our associated from square been free an first cash value-oriented and by dollar of flow number in Retail consumer. quarter $XXX softening was leases billion integration JCPenney this has new recent Lower X.X% results and than points in interest for XX.X%, launch and the a was our in quarter were was at X accelerated at continued. of up our sales approximately in end due

million $XXX the $X,XXX foot, square the at malls for XX% planning offering increase. was weekend. square X was per the be More XX% and already increase. XX%, national per sales outlets which experience. bigger. a and power for quarter the shopping mills, began was visited record event, timely we event combined, in another reached Our the a which than We're tremendous our foot shopping outlet both expect and has premium next from TRG increase first-of-its-kind We the of a successful second year's retailers to day, following very $XXX shoppers per consumers. which our outlets foot shoppers and reported retailers been square over an retailer our from at Feedback mills participating shopping

on tuned that. stay please So

they've in QX in at end lowest XXXX. of quarter are of the X the occupancy been years, cost the XX.X% Our

be talk it. let's platform approximately of the $X.XX quarter. results in on our down have in cash our second now were investment continued investment ABG received, distributions Based were developed. we investment in They and parlayed investment pleased over Now -- no is $X investments equity results, distributions our we in will There terrific the primarily, and our have I FFO, based that though our please to from year's of pressures And perspective. upon from as into more about inflationary but this other upside in keep that the a we the when It's last for have platform volatility even -- the billion. all investments, comes JCPenney. SPARC from with cash here. proper SPARC and fact, We JCPenney, in our SPARC contributed mentioned, in quarter-to-quarter it worth little

of once million. September the third also, those back. $X.X companies We During of reduced of We will mark, of again, $X.XX the of the at had an We completed share noncash rate our average billion half first third bounce of interest year-over-year X.XX%. that billion. our expect balance for XX. we the end liquidity. indebtedness I the mark had of and $X.XX. it's reminder And we mortgages would increase total sheet $X.X refinancing our would quarter, strong. is the $X.X XX quarter, our that a than payable Today, be total property per A year more share our $XXX a for by billion This of dividend SoHo a announced XX%. mentioned, on we on of at Lifetime Holdings of as the quarter, during and

let X.X back. sector or and companies out we buying are in million. During our we me dividends our while raising point are the issuing no our common our repurchased shares stock paying little of repeatedly dividend quarter, million stock other And and equity, for $XXX

We public. have now returned $XX to billion. of more since we've capital billion been $XX than our shareholders

the strong is The This the rising rates to comparable of dollar, the last face, remainder $XX.XX we the our the share, out of the year, a an bottom increase compares comparable current end $X.XX per the range which there are $XX.XX $XX.XX XXXX $XX.XX the pressures of at new of comes year full and the guidance obviously, of of per from of a marketplace. inflationary view $XX.XX of interest year that share. range. guidance in range of to Given to U.S. midpoint increasing to our number and share the $X.XX are at per FFO in

with conclude. quarter I'm So results. second let our me pleased

Our broad Demand world consumers returning. across retailers Worldwide to International shoppers shape, grow, tourism business the they're higher spectrum. is The e-commerce is to want for is income is our strong. space Domestic the the need outpacing good doubling the strong. down are in where and extremely brick-and-mortar U.S. and retail stores tourism strong. be, on

business pipeline through leveraging redevelopment appropriately, expansions, volatile growing operating is And our including newly addition experienced developments efficiencies, new to our Our with capital in outlet, periods, exciting platform announced risks. managing allocating at managing we for existing our are projects. and premium

do some outperform well. business. We we over our our any I kinds work at best of our also and of to look in track aspect encourage are our periods, We skis in these not record. as of you

this for operator. So moment. at thank ready you, We're questions any

Operator

your Instructions] from first with Craig question. is with Mailman Our [Operator question Please Citigroup. proceed

Michael Bilerman

here of help what I now know through and a Bilerman and just starting both a Michael sides, environment this obviously, actually is perspective, rent retailer matters knowledge with that David, more inflationary lot talk experience want a I pressure if a you they worse. the your are landlord inflate that you're your do little inventory tenants firsthand about your time of from But to to of that's with inflationary with because period makes dealing on landlord of arguably, sort you It's on you that can bit base pressures can to the significant. was actually Craig. retailers wondering being and where

and side bit of for just you the to can about share the what take the leverage So on you talk learning a that you're things benefit retailer can shareholders? little do really

David Simon

thank you, question. for Michael, Well, that

retailer we're how their any circumstance business. tell run not presumptuous look, to any So to under

how profitable. important have is unbelievably consumers Penney start. keep their last growth in -- on pressure high cautious, year did more we own we gas, strong in the mind, et to back-to-school EBITDA again, far But these with consumer respect again, that So obviously, SPARC, see is experience some with brands. do inventory with year think to see think had I within it being thing projecting the in. SPARC. though just value-oriented an how several they're brands. to really our even to said, to We're on softness and they and that good And they up obviously, reined Michael, off the still housing, even really were a companies. And so We entirely for we fit, it's manage cetera. And food, And them we

are they're very -- comes close that the own Our marketing lot spending. to team traffic overhead. just I in good. stores watch operating when on They I Penney, think a capital. expenses is our SPARC really management profitable retailers the rein focused what do because They of And to the They it stores don't do. investment think, They experience, on discretionary pretty the watch from actually return them. digital payback and

think other and would I So to they but style. If kind is JCPenney end It's of And that's and business. of never really what do should we're under they very a we important. XX% the -- will again,-- what do our tell day. we the similar of a part do. SPARC -- it's to happy try just it's but to not the our retailer notes, we're not compare that our in that, This small want business others, to team at

no in have We adjustment it. cash

example, And $X.X they'll -- importantly, important. very very I've Penney earnings is that these well that's to the weather investment. simple to in at positioned And because me just just any the SPARC basically retailer, go this has of billion math. liquidity, very distributions, just which are world. of got and return, it's weather zero and and -- cash with talking of They're both They're very it frankly. has the any a positioned. And way a other we to. as that simple there. They're upside, like kind if I'm storm all well thrust volatility I've let's net have this positioned out expected cash-on-cash distributions will to continues, So taken well businesses JCPenney

that I question. answers hope your So

Operator

with Goldfarb your Piper Our Please question. proceed next with question Sandler. Alexander is from

Alexander Goldfarb

platform this NOI was The Last year. David, on year, a $XXX like following question the the on income. retailer was -- it up $XXX million year in million.

trouble, volatility well. a footnote do but that you of And something the mentioned So what value curious this having for brands just about question, can that of some the that. your doing mark? retailer little And I in brands about? just drove talking sort more other close bit a if Maybe comment a you're on second is the platform, we're

David Simon

Alex, $X.XX Look, the Yes. was it quarter. for

is But through businesses. the time with spend can we because it. on you lot reason these we So investments I in a have went cash of no

point through in perspective, is The So -- I'm happy to it put please. yes. let's go but it,

Lucky bit the above -- also softness saw SPARC, team integration budget. bit about budget, fast Brooks a let's and at above little little the Eddie fashion did Brothers, the So beginning talk Bauer, to we in in everyone only on. the Nautica, SPARC. we Arrow, a respect at really a at had just bit in The market as so business the with great, JCPenney. SPARC told significant We little and in we FXX we -- Reebok year, transaction. of costs was

we -- in that the some saw So that and second obviously, and that of closed, quarter.

our We've better. which had happened, our change happened last the That a I CEO that's had Everything status. Penney, beginning the also we for the year. -- -- the think in FXX, management new also at which So be we believe, year. at also got we will of

got the ups I $X.XX, to world greatly it's retailer in like the go I no be absolutely I and Go got? that's do. they're than let if answered you on added I'm What question, and investment, think one but confidence right? a I you, me So I math the there's the So it, it's because cash happy positioned. there'll investment -- more dwell guess downs, okay? $X.XX That's right? I'll you ahead. all okay? something -- So and no to did, over, and Well, We've Alex. else like ahead, you'd

Alexander Goldfarb

ask you I'll then other question. Well, one

certain debt paper? stock. financially you savvy given attractive I'm disruptions buy the outstanding are debt just You in markets that to imagining back you giving buying back and buy your not always or pieces is debt coupons are the has where of guys opportunity

David Simon

-- we reason have unencumbered expense we Well, is unencumbered lower interest assets. we the because

that have flexibility. We

just have the Q-over-Q don't like we -- expense write market, because check, others. the we and to write did can and lower mortgage some it. check We interest last we year, that's compared we and unencumber just So a a unlike why I

Brian McDade

At a lower cost.

David Simon

At a lower cost.

be So time. but in not buying less debt at the the same all we that result. look may same that thing. back, more or Ends And the it's

Operator

Sakwa your is Evercore proceed ISI. next with Our question from Please question. with Steve

Steve Sakwa

by wondering But the of more bit color pipeline, from sort a And you nice of look demand, was the different when if occupancy a I more of I It were the and you and middle you provide as the leasing for strong guess, bifurcate talk sort it is versus of was centers lower David, QX if types the could was the to as bit try on at you the see to the sales, demand in to the pipeline. centers the really portfolio QX. could up the little how tenants? portfolio? end little maybe much about maybe

David Simon

but Well, sales don't are excludes $XXX just TRG, is -- again, we a just this our EBITDA our -- get EBITDA our lower weighted foot. because end question to a put not numbers in, but good these -- it's weighted

at points XXX. XX XX versus base average basis rent actually XX, -- Our increased XX,

do that's it. bother it's the It's and what's type. across but don't naming right, the obviously driving but properties. -- Look, also is to not the NOI, I board. high-end he's like it a restaurants. Rick here because and It's So me, it's does, -- folks, bigger and across retail entertainment. It's It's the retailers. our

program. -- So are retailers but value-oriented aggressive we on much that opening very have

sea is coming the spying So and Roseville We're as legs. the rebound a across Field California Florida best Vegas. are it properties on really all fire. the in back suburb. get is Westchester big Only folks. seeing high-end the board. the

stable. been has Midwest So

mix said -- -- But at And the seen granular the -- -- seeing it is price with let's point, -- the is it growth for we board remarks. quarter, world not you this I back the so of last my pretty up. But U.S. think by don't on the The we across have hope ebbs to with Consumers healthy. I thankfully, across And flows. going prepared China We said to wanted geography, this much and really COVID is of by we is I'm by board. in know not by the retailer, all. mean really I in is of -- seen, going bastion the we're it's have the U.S., haven't I and U.S. pretty note the names. in not with there, the dealt that's quarter our So way still good shape. it probably because world. and And what's out anyone with compared screw even economy deals

think the continue the I here. future think I growth in bright U.S., and will the is

Operator

question Kramer with proceed Please Stanley. Morgan question. next with Our your from is Adam

Adam Kramer

I on about buyback capital in of allocation. out the in the a to and was here in the just the new renewed Obviously, of of well wanted little press quarter a some Put development drill of just again kind on active couple the kind raised as releases bit projects. dividend more months. these

to or wanted for well. as of the So here. hear rank options I kind maybe you allocation different maybe capital of growth I And know option external discuss kind maybe just is kind an always of just

last rank You you it talked but free and kind excess of the if different here with cash about just flow. maybe capital your could options quarter,

David Simon

a REIT, be look, the dividend. it as Well, always will

difference taxable hard pay technically So to to have But you fortunate to rank think versus had to income. be -- pay to pay But you XX%. XX% clearly, that taxable dividend would of of highly our our -- a to We're it's XX% I taxable out XX% out income. mean, XX% out it. the we I income. There's got we

income. taxable our of That's XXX% at we're -- to close growing. out pay we So

twice was and One was in COVID, obviously, in Recession. we've So be paid that's were when The shut modified out in going two history. Great we down that Obviously, our cash. to

will we flow one. we're have always out our look that the cash sheet. number our SPARC that that gets at fact back, flow. Two balance company like is money and can't We all S&P generates look companies. we value. we that cash, just look XXX We stock free deals -- on a REITs. We our other make we So figure equity, We at rank return -- at at is other look our cash

is -- down. refuted we So the the have malls the reality e-commerce, market taking

We COVID. still have

there yet is out we growing enclosed strong, but is business business. we mall it. Our it, the mall believe the enclosed naysayers don't In strong, have believe in business that

going we is we to keep I duty stock mean, do buying a do then a stock remind external spent all attractive that cheap, it we're do investment our back. do will on a And a if it. what obviously, it money it with have it's can we and with and on make if return, do our and about. and to no property we can do that, where as to And we makes to it. consumer. we then as we So i.e., and care we'll as stuff there this really and don't do should we I we But I we to that's the and methodology, think return have had -- efficient properties sense, wouldn't got had the

our that rather of do we'll because have ours make ridiculously I But to it. that existing We they'll while, at do And new core better do. do to we'll have flexibility is dividend, once great the a stock a do cheap in that's I'd portfolio competency look every our also development it back, how then it. and buy the

Operator

question. is Deutsche proceed Bank. next Johnston Derek Please Our with with question your from

Derek Johnston

Yes.

say. for relaunch, Plaza, open Phipps let's So or slated on real an estate, October

develop. a to you So David, I believe roughly NOI offline took and

one accretion mixed And at what really, the other from upon as contribution we looking this project So key stabilization, of earnings expected? projects? blueprints with this NOI look ahead should is

David Simon

department Thank I We Yes. to XX we're I'm estate. on about old -- had couldn't and going Phipps redevelop everybody of what a say is get We're in and $XX retenanting, we fantastic story re-leasing that. more talk we going eventually, to store. to importantly, we mean, -- addition was show there momentum leasing million, I shouldn't million that had real -- more acres. happy you. around spend $XXX but in And well, terms to it. we'll an we staggering. because of But is that, on took It underperformer, look, have an Phipps importantly the NOI just created did,

some not the again, is is that. in don't we're really going most a Phipps, it's that's adding of area guess it, incremental property roughly of lot happening until really the same really have list. mentioned. go more and lot ton taking property. not Atlantic stuff increase brands a NOI will best opportunities all the does when we all have we activity it in the your our other they're time. of would and hub we're in and of and I XX% the to I retailers Ross do and think, add 'XX what the the I be because disclose those But and the the and Brea, retenanting making that. of mixed-use done when if -- hope estate a synergy, all But the answer it, we're yes, components, well over a probably is will lot be, of ongoing. at existing use in without done we including and -- But great mixed simple down real mojo located have of of of to of is that's that more my But especially the Park, That residential just question because a a done But to Buckhead quiet coming yes, good by the So mall importantly, with -- with won't existing after that leases,

to hope we that for So continue.

Operator

is McGinniss Please proceed with with question question. Scotiabank. Greg from next Our your

Greg McGinniss

and how labor for lines? then adjusted easy and to impacted process pipeline, is development returns environment construction two-part costs adding the for David, projects pipeline But shortages broader time the hopefully, it economic in how you. increases

David Simon

very, the in biggest the issue lines that This backlog. having of call in the restaurant that The time economics. on least storefront affected -- some when months only I is news not And open do level on affecting but a that in equipment tenants me or not were what than very to I watching improvement increasing. time comes few timing, Obviously, does it is we deal has flow think industry at the materials, restaurants are at something good are required Let ago. to talk it have a a we're focused that, lines. is we're deal the lower -- we

So income, on a timing to have and a there, side, they to here it's in really just higher nothing these planning equipment nothing project for a is the restaurants. lot bit suddenly has yes, -- we're decide ultimately basically the more from cases, but anything, changed On little of that -- same not dramatically that project. scratch our return we would to be nothing returns. on getting we're to development, negative. a going seem go But If a go so

Greg McGinniss

investment the to quick real you What about just versus a lower stock side redevelopment in add that now to have just could stock that. priced I If expense

David Simon

can I both. we think do

I differently though okay. -- were even in anyway sector you we're differently, our same many may We're there's mean, can not really stock raising just be again, and put think very we buying -- equity, us we little you I not bit and built focus we want -- want don't in and our few the on we to built define When things, in want, don't industry, some are and -- issuing dividend. perspective, a folks I these but of I the back. sector. there you we're we're others

beyond on the the same that's differences of about SPARC like emphasize some buying right that's the business, At run It the to But works. business. we're on much we it of you a And see duty we as have and the got end in so in important like the said, so we I point, to long continue do day, I'd back. really to mathematical why investment like yes, invest to company math I portfolio about our we math. try think the as emphasize return our our stock that. is just But your

Operator

proceed next with Mike your Mueller is Our question with JPMorgan. question. from Please

Mike Mueller

X%. about per ABR there year-over-year strong that? anything ordinary the driving at pretty The up Is square out looks of foot

David Simon

No, and great together we've I collectively. -- is of and we're driving it well portfolio worked growth shape out the driving just think in and

So it's all good.

Operator

proceed is with from Floris your question. Our Dijkum with Please question Van Gerbrand Point. next Compass

Floris Gerbrand Van Dijkum

where open Are Last got and these glut do quarter, give inventory, signed demand was around you've -- business? outlet into malls will outlets to of also or curious the it not outlets. that. maybe, some homewares? David, of stores the segments seeing coming your bit you believe, that -- can you the what points, indicated I was on for a else outlets you about where XXX pipeline expand an basis will I of create outlet a your are the Or was other coming than in everybody for you been that's update there you the you if And some And little potentially retailers? from? think Is more higher retailers. the luxury has talking

David Simon

questions. Brian let then first, I'll clever two answer the shot and part. get it a Brian let the -- answer was at take I'll second to very I'll the

Brian McDade

right basis XXX Floris, we're around quarter. points still the in hovering second

David Simon

So guys obviously, say some the -- inventory, And to no in not folks. brands, that see. the some want or -- those really plug a Maybe SPARC there ours. glut lot large, I flows, net with been few of just not glut already And ours. brands, and have SPARC lot then a -- But but system, a of interesting that's do and big There's not as a I through of I mean, some would We But to folks, going inventory as -- any glut few And by change folks on inventory. glut guys bigger of there's happening. there's I see, of luxury extent that had okay? the of that. outlets, of pop-ups. ebbs a big, we elsewhere plan. the -- can no retailers existing of their not of there's lot had A in a the and are a far higher-end most no think, don't inventory is Floris, there's dynamic not the

Operator

question Our Tibone Green Please with your Street. Vince with from proceed is next question.

Vince Tibone

Could more at back Did you slow during drill and down sales period increased? the in of start a on recession to accelerated the half all down quarter? trends little quarter as the inflation sales

David Simon

No. No, not really.

not better bit mean, saw I -- cases, little July, in was results We it lot didn't of fact, in -- recently. we really So in a really. a

there, trend real no Vince. So

Vince Tibone

That's seeing good to performance three brands, tenant inflation impacted luxury you more to the between tenants any and by Are latter versus sales hear. just maybe follow-up That's presumably the the higher helpful. more difference And be that. X in would the then issues? end

David Simon

-- a the I seen obviously, pressed retailers definitely where would we or dwelling. is income gas and -- absolutely situation there's that on consumer food, value-oriented discretionary is question very with the dealing that with no have difficult

So reining -- their and they're spend. in

a we're the mentioned doing the So but younger in there's pocket the of we earlier, bit little Brothers, I value-oriented haven't about the no very like But do But you or lot the well. gas consumer brands. that And that. SPARC, -- seen better luckies all question kind the really Brooks in of at the where of retailer that suddenly is has world taken are book. a see out it like

Operator

next is of Schmidt question with Bank Our your question. Please with proceed from Craig America.

Craig Schmidt

is might fourth actually factors? third down quarter. more macro why comps It to case, in it second the of it was a NOI like second quarter. the same-store like of get year? tougher going was looks number it only And the for to compared that the that be the up seems in lot half Is X.X% comps difficult X.X%. and Or the due Domestic same-store

David Simon

No. were what now big the we going overall, were right? outperforming. COVID, last of above of I our though or I is than seasonality even and with nothing clear. consistent of X%, year -- our the what and think benefit Craig, clear business, plan, better thought. mean, plan. I So we'll but QX actually really, been initial We're outperforming had We our that's the And trend really saw of other outperform against normal our mean we've we plan up this Yes. than is we that really Craig. guidance is we

Craig Schmidt

that is think your July? you you And could the despite strong factors? you year-to-date, has of continue some in macro will, -- you leasing enough that it So continued if do think

David Simon

not deals. Well, I've have our it's pipeline We're the strong a been. is times. as is said doing bunch of new we answer several Yes, as that --

Now Craig, of we've store is you really lease, know a that understand, when a optimistic you 'XX, 'XX. the because we're And open sign this important of lot really, everyone to done a cases. open for lot the really tomorrow doesn't doesn't very leasing until in

our outperforming off That strong year, we get year really as leased are only this that continue months. over that to a we X actually Craig. to you, Thank X, last we NOI. budget not stores the feel will fuel last comp but good we So open positive these

Operator

is next UBS. Our your Please question with Michael from Goldsmith proceed question. with

Michael Goldsmith

your high income lower of On relatively a end the come at low the guidance, softening at the the up, when of brand. sales seeing range flat has end time you're

base Maybe kind way, how for macro the of rents? sensitive what's of performance quarter? the to said saw for implied the in second your domestic international relative what operations what's is, business to another percentage performance question the is half the the And outlook second in and my the in environment? you So

David Simon

-- I the Tom. generate through you And positive with very call anything, a the He'll on money. If go about consumer that it's I Well, the of you're in income history portfolio, think think go And good that. it very did higher results and spending actually, feel the really Tom you. is if interested, can still piece if we look, back any a portfolio. from will again, you

to our primarily the one, sell not, out political tends Our get of maybe and we I'll suddenly we're stay outperform product. to kind industry and that there we're our business go in environments maybe we what definition toward because recessionary at ticket extent during of big that actually the items

insurance So very kind proved somewhat of historically that's it's -- and and an always policy to positive. be of

cash in our decrease. were flow It flat. even So properties was when every from down, COVID our we other shut told did not recession, than to

So a paper has great on Tom it.

give you but interested, the charge you, you're If we'll we'll data.

you about And that the they again, a move of asked great the our again, -- think really brands. positive. same We'll exposure sales, go a of toward again, if in we a on away maybe business. our will grow going items get We'll be also of high. here. couple flow but full-blown have something SPARC kind case the we be will I cash have that sell see picture tickets it's against just let's big some we properties. think I It's is and It a -- year. recession, won't do view And do the into bigger

Operator

with from question. your Our Please next Sanabria Capital question BMO is proceed Juan Markets. with

Juan Sanabria

comfortable expect the little there? are the ask thinking you with we for are Just the are higher you Or context? books average. leases are historical month-to-month Or wanted to still a than still to how Should that higher current kind of rents? to bit regards on that stay

David Simon

Yes.

more being documentation done all a bigger dealmaking that have the signed done documented. lot in think and over of months, X don't our function X, I and that's last renewals that been than X, a put of that's we until

So we fear no I number. down, in to would expect that, that number that but go continue would have

Operator

St. question next is Our from Haendel

Juste with with Mizuho. Please question. proceed your

Haendel St. Juste

Dave, -- on seasonality the follow-up in a this half of question first year. I of a NOI the on guess

And Second quarter the in supplemental are both impacting NOI quarter which expenses profit operating the lower embedded first typical is How based what's on unusual. this periods, in seasonality? was year? than

David Simon

gather question. Could it? repeat your Yes. We didn't please first you

Haendel St. Juste

XQ question XQ, First and unusual. of the NOI than sequential the is on XQ impact lower looked to seasonality for which XQ.

income operating so how asking I was actually And

David Simon

over don't don't I -- I was sequentially NOI I the think quarter quarter-over-quarter. -- lower -- think see,

of in a in You think hit end first January overage because -- leases lot we companies their rent XX. do in have quarter the

not that some in reason. the of pick but up QX, that's would you only that -- so And be

Haendel St. Juste

seasonality or OpEx, the in expectation impacting mentioned And the on of perhaps embedded color what's sort on in your any X% how

David Simon

but Again, good. is not your so I'm connection really sorry,

Brian McDade

really not yet We're seeing much inflation operating just expenses. in

about you from we've As material contracts that protect us, increases. us think long-term got

David Simon

for there. did have increase we operating expenses negative our We quarter $X.XX the a did $X.XX. And

Operator

Our with with proceed your question Truist next Bin Securities. from Please Ki question Kim is

Ki Bin Kim

question. Haendel's on follow-up a Just

QX. and also curious items? from how perspective is NOI some in HBS Your or over Klepierre Also run increased that onetime about pretty much sustainable rate significantly if in of a there's XQ

David Simon

was Well, down quarter. shut no. Klepierre last

-- more year this of I this is last mean, quarter. kind So

so this future -- is growth all So firing we'd expect on here. not cylinders, still they're

were compared and under there. So so month. a places 'XX, comparing some real lot of is of closed. HBS We 'XX amount that no of in a they a change -- lease small. to QX And there's certain pays rent of to QX it's It's restrictions of every QX 'XX, insignificant. But

small, growth step-ups. the but change it's is. like little than other there's the no normal So -- Very very

Ki Bin Kim

sequentially. increased I meant it think, I actually I sequentially meant actually well. That -- $XX that sequentially, by, as million

David Simon

a we Well, did restructuring.

So that's it. of part

Brian McDade

results. in they're announced And doing They're better, strong quite honestly. results

starting to I you're come as well. seeing So that results our through think

Ki Bin Kim

And that of I'm pricing XX% or share not, or kind gain in to expect missed like to the sure reach to you you're it can do as you XX% what power look you if spreads what lease you not And in increase occupancy, of I commentary close any on kind XX% occupancy? continue but XQ? to that, given start when

David Simon

in our direction in right the moving too. spreads right moving Well, the all and are direction, rents are

Operator

from Linda question. Tsai with Our proceed next your question with Jefferies. Please is

Linda Tsai

it's On domestic X.X%. year-to-date, was guidance NOI the and guidance, growth of original X%

the any is there update to X%? So

David Simon

our we as beginning several initial the confident plan. of we number it to pretty not the not our we're we've for As at of We disclosed update do beat is. quarter-to-quarter We the going update that. It's other part we give expectations. think do you we've said our than guess all what we're best said, years, year. Well,

Linda Tsai

you might can perspective what where XXXX? about And on then we from an you're focused initiatives in And what most progress? ESG are some talk see some

David Simon

our I from -- to -- it point I do giving and on of long. in be continues a the operating enough a very through it's footprint, of view, the which that's But but read lot -- of a -- But have across communities, Please obviously, to it's we're -- we reducing an report. ways. to Well, a don't time go different mean carbon we it. back a lot obviously, focused that's enterprise. our And

it's If carbon it, footprint. you. link, you big Tom item can -- give on sure, it focused there's our I'm have focusing don't certainly a But is reducing to on the

Operator

And end of the over reached David for now at the to Mr. question-and-answer I remarks. session. the Simon have We turn will closing call

David Simon

Okay. allotted I you. Thank that's believe time. our

questions. thanks and you. follow-up, everybody's any Thank So for please Brian. Tom call And

Operator

conference, time. for This lines you participation. and Thank concludes you may at this your disconnect today's

Simon Property (SPG) 2 Aug 222022 Q2 Earnings call transcript