Earnings call transcript Q2 2023

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Operator

Greetings, and welcome to the Simon Property Group's Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce to your host, Mr. President Relations. Vice Senior Ward, of Investor Tom Thank you. Mr. you begin. may Ward,

Tom Ward

Officer and Thank David joining Executive Officer; on and thank Officer. Chief us Chief Brian Camilla, call Simon, President. are the today. Chief Adam is for Financial call you you, McDade, Also today's Presenting Chairman, Accounting Reuille, and on

We Act actual A quick statements during the the may to of meaning made Securities those that within today's of due accurate harbor Private only the may refer to risk other of this statements. release and date. factors. of for call risks, reminder may be to this relating that of Litigation that materially differ uncertainties, Reform you information forward-looking the results and statements filings our forward-looking includes of be SEC XXXX factors discussion safe variety deemed as and Please press detailed a note today's call

financial included supplemental X-K at comparable the measures available today's directly Form release to filing. most press Reconciliations IR our on supplemental are in investors.simon.com. the the and the of and press within non-GAAP information the are information Both measures website GAAP release

hour. call be will conference to limited Our one today

session, For to request to in those we respect question. participate who please ask to the would you one question-and-answer that yourself like our limit

to I'm Simon. introduce, David pleased

David Simon

afternoon. Good results. quarter I'm pleased to second report our

or a compared lower a share. to held I'll and and per interest had expense variances platform other quarter other and interest contribution the Higher from quarter $X.XX rental $X.XX QX publicly cost walk $X.XX quarter-over-quarter $X.XX. international higher this our of to in QX by driven growth, Second Higher compared contributed billion of quarter income, XXXX. income. us were primarily good XXXX. securities $X.XX from funds $X.XX some comparison, investments for Domestic very operation of operations through and income

period and XXXX. business share compared quarter per $X.XX is in year-to-date second year per real compared $X.XX was share that per in our share in from the to $X.XX estate comparison prior FFO $X.XX XXXX in the to

is headwinds business from higher of Our the our plan at the results to continue XXXX pleased guidance expect meet estate we original ahead and with and our business OPI our of quarter real to performing in interest and beginning also the the we are expense provided overcoming the year.

Portfolio international value roughly quarter-over-quarter for X.X% and and year. the NOI We quarter properties $XX or OPI increased includes which generated of believe half cash We half billion grew free approximately for billion market Domestic year-to-date. in X.X% the X.X% the of at our and constant $X.X X.X% billion year. per property of is share. our in NOI, $X.X flow platform currency, the the quarter the first first for the $X.X

all-time XX.X%, second an foot, was an XX.X% BMR TRG mall of to Our of at an rent malls the compared of X.X% end The mills $XX.XX for basis was for the our was is outlet per of the and This year-over-year. base quarter $XX.XX points Average foot. the increased high rent per occupancy an increase occupancy to was and all-time minimum and the increase XX.X%. year. XX prior outlets and high mills X.X%

to million portfolio. than across for leases XX more We up we more square than and for signed are square our quarter, million Leasing continued X,XXX X.X the year-to-date. momentum feet feet

deal pipeline, occupancy volume. activity cost $XXX million lease including than was our for new the half first in of in XX% and deals X,XXX our of renewals year more have We total approximately the

strong see the broad-based retail continue categories. many community We demand from across to

our foot. retail mills and malls per at quarter per foot $XXX Reported per the second $XXX sales square was in for the outlets, foot

over that more annual very for generated than participating successful shopper has was Feedback great. retailers. We June shoppers in National and weekend. also visits Shopping been We hosted second Outlet our X Day million

We bigger expect and we get year. it are continue continue bigger to also on to to and build each event, to annual this excited

We to X%. at year average Turning of the of a sheet. during $XXX the balance half for of first an the refinancing total rate mortgages completed million nine of the property

balance sheet strong. Our is

Today, We proud share dividend have $X.X to September payable the of billion per quarter. of we a our for dividend $X.XX will year-over-year be increase liquidity. on of are announce third The That's XX. X.X%.

paid in now billion public. over been $XX have dividends we've since We

to range guidance $XX.XX increase of We and share. respectively of This per per our is at $XX.XX midpoint. to XXXX the at share full-year $X.XX $X.XX the end from of increasing are $XX.XX the $XX.XX share per an and bottom

thought, Now, let for food you give may. if I me

a period long We we've world since time public. our have built of class been portfolio over

portfolio malls Following properties. Of the our today. original XXX and the strip portfolio approximately acquired Since XX XXX XXXX, developed our XX of in more then, in primarily DeBartolo and in properties than XXX remain our we of centers XXXX, properties, have disposed XX consisted in Midwest. transaction XXX

asset So result constant is a rotation. our portfolio productive of high

and me let our is beginning Tenant beating is saying conclude the record by our expectations at internal head growing of well business increasing. we and at plan. are Property again, of Occupancy and levels. set Finally, excellent. that rents Basement year. is performing is the internal is demand our NOI

your for And now, questions. we are operator, ready

Operator

you. Thank

your with from And [Operator proceed line Evercore first Mr. Steve you. now session. Please the conducting our We Sakwa will be question comes Instructions] question. with ISI. a Thank question-and-answer of

Stephen Sakwa

Good Thanks. David. afternoon,

David Simon

How are Steve? you doing,

Stephen Sakwa

on Good. the and sounds leasing getting good I as even comments the better Everything really just wanted unfolds. maybe to pipeline. year in your follow-up

power trend ultimately an you the mall in in you So do of pricing where portfolio kind out? settle portfolio? that occupancy the ultimately seeing can are across think accelerating And

David Simon

And I want all, I much. power will like I of be think – don't so year-end. be word the north pricing by XX% to of first Steve,

kind needs given as that asset we reinforced been every The the e-commerce our by look to as in do. is bricks-and-mortar find in space much unrivaled physical the to ever. us industry. environment as as That's of relationships, terms a think, strong allowed essentially I anyone tenant has lease earlier that I you that's retailer we're that. when a happen in rotation All good that's of in portfolio to our and really And business. mentioned important sales our to of kind spot win-win create

think was of felt, time matter. That's I a furthest from many obviously truth. don't where period [pundits] many the just the the that thing there long bricks-and-mortar felt of

will we aren't So generate rollover. that continue large And is going us to higher sales think our now have positive. ability replace rent. and demand By be to new to to the tenant and retailers we which allow producing with

rents. think up So I do we're pushing

trend we you. I doing we're thoughtfully that think to expect Thank by and large and continue. it hopefully

Operator

the Burrows Caitlin proceed Please And with Goldman with Thank Ms. you. question. line comes your our next Sachs. from of question

Caitlin Burrows

else. Or that you Simon so on that David, be dispositions? kind of us strategy? I everyone. those acquisitions asset suggestion looking of to that's comment wonder, I'm get rotation on a Should Hi, recycling making medium-term asset gave the just to more in near-term, a details more since and was guess you're historical guessing everybody active the that XXXX, me kind

David Simon

improve portfolio. been Well, our right? we're to of So lost very would looking size, that recycling, of say, it active, I because think, always I quality always we've get the in the does translation

do We a in to whether to I that recycle every that extent to And and important more we good or So there's find that. just sell it's can we liquidity. component pursue going it's we're trade to that do, it's I over been think have of our buy, think success an the to continue always time. find sense that and think would we – asset that our to generate and We assets. our would the extent trend not will

the At done same time, we've it.

it we maintaining in a in in as the the all balance we've of done through quickest way We've a a thoughtfully as it it sheet have lot done anyone. generate to As know, where others short-term of returns terms leverage. done way

of that's to component been yet grow our So recycle. another key ability

be but active don't there'll today. I have you it's think be – maybe assets possible, that So on capital so than I'm some we we'll different signaling, these epiphanies, reallocating have maybe more to right,

Caitlin Burrows

Thanks.

Operator

proceed Thank Piper Sandler. Goldfarb from your question question. Alexander with you. And our with next Please comes

Alexander Goldfarb

overlap. moving to afternoon And thank Appreciated. down Good for David. Hey. you call avoid there, your an also

recent changed retail my in was or live, the the understand what for I'm or my they as early curious question is the tenant changing which we the ultimate, sectors where is will. if really let driver Are talking the that you all are there retail, given and example. of of sectors just XXs sort now at look press luxury article, to at people sort how [Kaitlyn's] customer article how of look preferences question, you that opine you say not you question changed want. a But going like it's face there now, have there this, back about of to then the luxury versus sort and cash how works XX just XX, retail was this is in really nowhere the now sectors. maybe must company your and it's of bulk analogy if the hey, retail, what now? like but have. like, just sector your nichey years in you're the to bottom over looked that malls, Are I'm XX% trying more lifestyle, years, and So sales, it if any of you But absolute I guess flow certain ago, sort dominant Midwest place drives of curious any would using of I'll still not if it's luxury other when of past line, And has it's XX landscape.

David Simon

Look, Kering over – the any an their think of longer the I volume. the some unquestionably have true or they experienced. and best retailer we've business. the the build ever LVMH that like do Yes. to best the in would brands, They say, They're term stores. Group, world retailers They best most

their what loyal how how brand. have their they do. admire they maintained build brand. We we admire they admire They We customers. So

So business than, more with belief, companies to do to aspire better and than we that like be there's anything. no them

maintain they their think how they're and stores their I themselves. they how true how And and to customers treat

It's is and go centers. other the stay. It's our important. that business So growing. to here to wants that It's worldwide. things loves really a It's great retail, at shop consumer do physical luxury

But we number. Brian, So if I head, XXXX. are above off to XXXX. it they my flattened them. much little at were Tom a – sales give of top and bit you in They're and we we Obviously have I can where they the very the but we're business later. want QX XX%, still as But XX%, to But look of as compared don't know XX% exact with do focused. to can they remember where can Alex, you don't

more the have. of brands our We interesting X-K, couldn't top that tenants. Group, really now our one the XX of So they things our be that if at they're and you relationship look LVMH proud – is in and

proud also but the not exactly is shopper. so fact the is this do niche shopper, This extremely with And established can we something lean a is as Property will do the So of. affluent we point for we business Group. business. as a we're have It's much word continue business. to And them will in, affluent shopper, that – is we foster Simon to growing like that the And those that that differentiating don't a I relationships. huge much but at we the

So commitment it's want their customers. but they'll customer sales they a there. – flatten, want they view really they brand they down, what up, – go will company, take Yes, to their they unabated. take I systems a they're go plant I admire And in that they and their think the of and quarter-to-quarter to to not the all goes their where longer stores, how flag their do and they'll treat much fact go

do is hear So of not with because they're like worldwide. it's anything, And And fact, we it's niche. follow love if generally question? growing, we'd where business great in And I a headed true business that there's across you great another Is to growing doing We board. and typing. – they partners business kind them. think are that to the together.

Alexander Goldfarb

you could… I Sorry. No, you mic so right Federal so didn't Tom already guys, and said I I is was cut, think know my after thought

David Simon

We're We'll talk kidding. Alex. later. kidding. you We're to Thanks, only

Alexander Goldfarb

Thanks.

Operator

of Street. line And Please our you. with proceed comes next the with question. question Tibone Vince your Green from Thank

Vince Tibone

for Could thread] and are kind [current leases afternoon. the of executed, the good discuss been leased you in occupancy? have openings yet cadence what that open? but And Hi, not physical store visibility then between your

Brian McDade

this Brian. is So

September going every we through year and certainly, basis ebbs do balance unopened. velocity right throughout October. And to that expect of into end. hovering might XXX of year, open later this continue going as and to are see we're we our the still of are imagine flows the business. that points you We That and the to as month retailers given We carry do think month openings around

David Simon

et be talking But And more XXXX getting a that a permits business. business that, talking license, the – don't lot we – in say, tongue, the and lot on cetera. we're leases get XXXX we're my that, is to tongue. that or really I nine on a I the still my about liquor signed and/or have exact there signed – to about you is even of are give of just build required of be And at I number. months signed again of is business but to and tip we mean, we've the don't that especially, would business, talking the little have the restaurant signed it complicated out, you're follow-up restaurant Vince, you're I is the at – when on top – it's can permits,

We've talking about was with extent you're some equipment issues Crystal, year get with it. delayed restaurants of To the – great also COVID associated get Forum, going Boca, literally to of all opened. some the got the and chain of into supply just a permitted, but Stanford, some this because

again, business, and about – business. mills than the or outlet when are build longer our outs the full So you're price talking

that is is So in build the pretty not obviously also have we on a year which time, front that numbers. sense are serious But XXXX, pipe plus on boxes out. in That these open XXXX. that to long scheduled is good,

We're is new shields, for Fitness, Primark, with the store building new that just takes a to et one even lot Stuff Kohl's. by Wichita is et business A fact. in hours Dick's, they that recently a of opened way, cetera, Time fun Barnes deals. doing – and a opening, time great with our though even just which to XX, just Life cetera of

tenants longer that, some the – a does the XXXX, there. as the interesting So remember still XXXX take we frustrating more things in so it's cases, is build it of interesting these but the out in correlation the out And time, in lot a happen is build really expect there to retailer, open.

Vince Tibone

helpful all suburban between I format hoping appreciate question, be My retail demand geography. gateway and to markets Yes. you That anything malls hear that. I'd [differ how could That's between sense. makes curious and was and discuss color. next I also centers. and today really by] outlets

David Simon

I trying as through back Simply, I the go go think I'm thought, COVID. I time, in – to and

I business I kind been. think to picked has to up outlet it's the demand than was finally the more. the in slower up of up It the has mall pick think mall business, where business picked and

So I high the you of not even that's as say somewhat took Regionally, combination have was it's sites a interest in unabated to suburban all. a And that. board. a and any pick outlet by large, know, kind and up. now, malls product think is and the level regional across demand super down, from longer have back bit the of Mills type a slowed to little of

have of stuff. city don't lot center a We

But that have to kind again, in imagine, growth, are as in still of high portfolio our seeing a And of am you does of right happy Texas, in more outsized center because the the is micro it finally, real could those catchment So little the environment positioned in – well then places guy you the Florida, we're location you're estate, areas best not I suburbs. regionally, is kind a ask. But where still demand. the of attention. bit it's unbelievably population seeing the might Tennessee, that

to was said ago, them At we're we make ahead and are prediction. on kind see came oriented. is careful would hasn't We Real way much. of happy So changed location very all as But that. but another. that that suburbs generic But as the the that well we're one a to estate we still most. or all be, I just to true. predictions, happy place you few got is, of continue lot that a trends say of years see of to felt know. geographic least these really those to trends like one Not be It be we

Vince Tibone

Thank Great. you.

David Simon

Thank you.

Operator

next question. proceed our And you. is Thank Please Stanley. from Kamdem Morgan your with Ronald with question

Ronald Kamdem

Great.

one. one Just quick

the Just the thinking function of about growth business.

XX% of You that by XXXX. end occupancy in talk the about getting year. the annualizes to Obviously,

the I the spreads, like to get stretch boost, a growth. to X% about So in bumps, it when number think plus re-leasing seem occupancy rent doesn't a next year

the we're I'm trying in some thinking about the pieces So as of understand we growth building to function of what are be the should XXXX? moving business out

David Simon

sales spreads, and Well, think all it's percent lease-up, Obviously, I overage new renewal it's business, likely It's sales activity. the of suspects. it's or it's

that I volatility, us of of our recessions, there. it's comp NOI period of there's the long real new that this, nothing – lot So proliferation stuff a grow mean over e-commerce, estate allowed to through a other. the and all has COVID time

productive. of that mean feel all positive suspects the ability, even to sense, able generally I up to XX%, still we to about we'll our generate to better which grow we the common have all have have as retailers metrics I same likely it's just it's get ones that So they'll thereabouts, and we the higher it's we But be ability those to all to sight with rent of, will produce NOI. the we lose likely to because have can't And still comp pay ability ability replace suspects. think the we be that. – we more

It's simple. really that

got on open. XXXX. this cylinders finally same will benefit also the lot a added all Ron, all XXXX that have we're XXXX, but but finish those pipeline certainly we've the we in in it's stuff. the hitting So is focused And year, that of – And that to in XXXX,

Ronald Kamdem

Thank Helpful. you.

David Simon

Sure.

Operator

Point. with Floris question your line Please Compass from proceed the question. Thank of comes you. van Dijkum our with next And

Floris Van Dijkum

– limit I one. afternoon, had Thanks. guys. I Hey, have unfortunately, it good to to

won't XXX sign-on more I points of OPI Presumably, And leases if in that your the those on could of maybe dollar can or of know if higher important bit a you focus also that. in terms basis talk mall the open. than outlets? So little I But you your maybe lot less NOI in portfolio stuff. about quantify a that's amount impact,

of So luxury pay significantly typically there's higher lot a which rents. tenants,

it greater your your the than impact in occupancy? So ABR on has – than of presumably, NOI percentage just a terms and

David Simon

an level growth of get is outlet right what between open months for comp to Look, – easier And that when days. and XXX% we But the plus. you're is. can And you we don't expensive. be NOI store. build-out that will build-out certainly tenants the XX or want be to anywhere detail. We then The get to complicated can XXXX our the outlined quicker into and is six much as where it mall XX generally

function But the so this plan our at that's the mean, I if those You're comp NOI that – talking were early to annualize that. XXXX. the certainly months I'll area. I'm go levels. better back back. and of Floris, think, – back end we specific next nine on of but plus getting you restaurants We year. happy retailers guys back, we it's that But And goes in we through analyst better to numbers, you to I that as is answered with going say it XXXX in really it, But And to, that was it want do very do be be think we're through one go will will a and open. back to there the year, offline talk get it, a focused XXXX original I of in of to we be when okay, happy we I'm really – lot

Floris Van Dijkum

Thanks, David.

David Simon

Sure.

Operator

comes next the our Please And Jeff with with Bank you. America. proceed of Spector of question line your question. Thank from

Jeffrey Spector

afternoon. A money the since on doing in Good you've follow-up allocating investments Great. assets. potentially crisis, really properties. investing world mean, on David, I best that or into question, your comment to financial other been

assets of et Or in own well? you you're the assets in apartments, thinking really or You've you're say, you've retail those the the as Is that sticking been programs changing with change, difference let's densifying a landscape? else out there what anything seeing cetera. noticed that with between

David Simon

experience we've I think, the historically, but more or stick what Jeff, not core is by to I experience right and business think of done there. our any away good stretch been estate. going I we've programs, mean, neck, strategy. high-quality perfect, had the here and from We're retail our imagination. good that nick we're We'll but large, experimenting it's not real less moving to and by But

in more of to of this here lots put want that. have versus pull Do reinvest we want capital. sell we terms levers category to there, want allocate do in how to We we that to and

think I all had So I express it, about we ability the that time. of think to if – that the

sole – time. beyond of talk asset But this think actually to really you we just stuff rotation do that do all never tell through We And we about we it. about the it. that about the as stuff was purpose it, going about think

capital that we're we're sometimes afraid important – thing to to and know the hold we going whatever where kind the and is investors analysts sell or right buy to to or we reallocate to do. not is, So think or of communicating growth and is think that

we around it. point this, not the just go, corner. really like done make It's not it that's something here this wanted trying – – to we've – big out. like I and wouldn't we're is we is So to just

Jeffrey Spector

Great. Thank you.

David Simon

Sure.

Operator

Thank your our with of comes line proceed from Mueller you. the question. Mike next And question with JPMorgan. Please

Michael Mueller

sense to compare outlet rent mills? a how portfolio move Hi. the mall to as and us Can you you from Yes. give TRG when the spreads to

David Simon

you say pretty seeing decent. generate again, over the or feeling but ability rent to out It's the our don't better coming now happen talk going say much shift always TRG malls, our so last our from So what it's outlet cost where XX%, little around spreads – right? still slower space spreads. is would We're on I thought look I a We at see occupancy it And not of better board. much, would business pretty outlets want so every to when positive the are outlet, was – we're there. is Well, really to to in or a I and I as about you much all mills, about seeing pickup COVID. might mall across but every year we're

well. we're so as that's that, continue And optimistic going to

Michael Mueller

Okay. you. Thank

David Simon

Sure.

Operator

next Goldsmith line And your from UBS. proceed of question our comes Michael question. with the you. Thank Please with

Michael Goldsmith

the indicate Good you afternoon. that Thanks a leasing In past? deals meaning that there the in of opening some lot the And for Thank pipeline what your the is for remarks, was does question. interest new that taking about that this first in to you. indicate? lease concepts point this talked my interested you data greater activity that half provided? is Does and this does new are compare in to other XX% behind – deal or there volume. How

David Simon

I reinforces the outlet and mall feel the it business. just the it of think – about importantly, our it reinforces importance – product most and retailers our how

have whether the mean we we restaurant generally, really it's concepts. sign whether developed whether it's did pickup entertainment months I great luxury, last, whether two new has that great sign. say, the direct-to-consumer, a entertainment, would we're it's seeing business, And a XX% it's it's So the I and say, pre-COVID. it's like a over

going product product, great in that So new think open And a we new much that testament. sorry, – I'm have the want seven, XXXX, higher the – great eight new a existing sign our goes years say, it's tenants. it and didn't probably the almost of in that mean, I'm I to a level level is I stores since percentage to testament to seen because of certainly is retailers I've XXXX than

it's level. the to the goes So XXXX of XXXX in clearly kind we and XXXX, level, were XXXX, in where than it higher back it XXXX, XXXX, was

good sign for a it's sure. So

Michael Goldsmith

you. Thank

Operator

Thank BMO you. Please from proceed And question. is with Juan Sanabria with next our your question Capital Markets.

Juan Sanabria

afternoon. gain question. it $X.XX or $X.XX P&L. One, Hi. like the Good there's in looks a Two-part

Just Thank comments bit was comments what and guidance? the property NOI that have on domestic if could the curious any prior that if talk about of you then secondly, least And in if at guidance is the you quarter's X%. assumed prior on a you. little

David Simon

I no, that. two say – did X%? what No, you know the no, But

Juan Sanabria

X%.

David Simon

there. let X%, start me

gain that So get very diluted above associated feeling capital, after-tax with of raising primary comfortable yes, The we X%. is we're we'll the which down. the ABG be

we tax, – have after it $X.XX. a gain dilution was it's So a

Brian McDade

Yes, there's tax $X.XX that for of line, the Michael, transaction. tax in

Juan Sanabria

Okay. I'm And guidance, assuming, correct? that wasn't in the prior

David Simon

a I out guidance big pretty because we range wasn't really much to so our really and of didn't Well, in give control. we that's our – don't speak –

Juan Sanabria

Thank you.

Operator

you. And Greg with is proceed Please from question. Thank our your next question with Scotiabank. McGinniss

Greg McGinniss

Hey. Good afternoon.

NOI So quick up Taubman was was while points. basis on from down quarter, from X% last occupancy XX two-parter me.

be And of assets recapture looking remaining were drivers the that you the asset what curious so? process line which comments to one in of us whether and Just investment the by your decline. that XX% might recycle? you that would you're that's remind planning then can with on recycling, of you the do to maybe Or

David Simon

to not I'm going on comment Well, that.

associated eventually us, call a puts Taubman of with to with So interest They kind it. we to have have a and and five-year of associated are basically their there slowly put period. right XX% over the calls then

the had they it function have why in of kind rent that really a other – percent that's of last you any year. do through the it. comment go But of you So of more rent on – was don't And overage you that. QX Brian, can or

Brian McDade

that's exactly Greg, what was. Yes, it

ahead, have in year did year. contribution we're percent still on than they can this rent last of a did they but year-to-date basis, QX a You of higher see

David Simon

a of versus on in one. then it's is, had things. obviously, is land quarter QX is the Number XXXX. expense. number this Number TRG, FFO quarter our and we've That's contribution also if The two lower, three you higher other insurance one Taubman, we on so three primarily reimbursement last is sale. thing number And interest got D&O

exposure our So floating of cents? QX between debt a to there. TRG this? how – I little FFO difference there are think contribution the was XXXX over to XXXX rate spread like more from And something many $X.XX,

Brian McDade

$X.XX.

David Simon

okay? $X.XX, I remember still numbers. So

of if any so But we – Tom So quarter last lower Taubman from our Those than was the magnitude, okay? be TRG generally order this QX of Brian. where it. XX% through if FFO contribution or you. there's that's on to helpful are So $X.XX that call might go that XXXX, own quarter of you details

we contribution. So Is right Adam? lower a had that number, the

Adam Reuille

Yes.

David Simon

Okay. number. Thank you. the right That's

So ask. to there's much not really

Greg McGinniss

Okay. Thanks.

Operator

Haendel our Thank you. comes question from next St. And

Juste question. your Mizuho. proceed with with Please

Haendel St. Juste

there. can Good evening talk out about… David, you Hey.

David Simon

To today. out not We're really New there. City be actually in technical, York we're

right So I I you here we're are, considered don't right on, comment where we're New I there, which out will know Indiana but here. City. actually not is know York but in

Haendel St. Juste

from I'm you. not far too

for impact the talk retail payments and macro can the year outlook expiration the the will about think back And and loan sales half line of student what that's you maybe in So of have early thoughts on how debt also you trending improvement potential or item will the and on on in that the given the business. commentary do Thanks. XXXX? year-to-date that that on some

David Simon

I because comps obviously, say really should we're the to of increase half because interest inflation. would or – the started sales, gas XXXX say, optimistic the in of decelerate actually prices, year Yes. half second this back the of on rates, I in

all generally, – And our think easier the stable. we're so get second across relatively is retailers economy, optimistic. actually we I know, I So seems comps the for as to in half think board, our the

Obviously, it's world. very uncertain a

we optimistic to be bad it – we're more mean little actually up we're But seeing the it's a for but with – it's happen. to not can maybe anything year, than – and on comparatively still and half, comp debt, lean – respect continues lows. like mean last sales to historical it So I and it's on second expect

Haendel St. Juste

Okay. Thank you.

David Simon

Thank you.

Operator

with the And Jefferies. Please line you. question Tsai of your our Thank from next comes with proceed Linda question.

Linda Tsai

taking my question. for Thanks Hi.

that you think is of next growth, you X% could year? level terms NOI the sustain In

David Simon

so, I would yes. hope

Linda Tsai

color that? Any around

David Simon

all the Not qualities, have but one that question, was day. of that succinct answer you most Linda? my another Do

Linda Tsai

also little Sure. on I XX, for franchise guess Page item mixed-use you broke income line just Maybe also the expense. more operations same and color? out in a

David Simon

Yes.

– all is we and into And – plus, other felt assets, was lumped a it. – would why the number franchise be and terms thought – are to with the we number questions consolidated our just of have and and we all of we're felt kind in other income, better Brian it where a we're – Starbucks We and the this I this think instead some Starbucks these we franchise having growing? like so obviously, hotels. because on operation only doing location Tom growing it separate we big building of have expense,

your not, for For – your believe it or benefit.

Linda Tsai

And then how forward? going we do model that

David Simon

pretty Look, is that in straightforward it. I think we're hotel the business building

certain our much X-K. And in have pretty returns we think outlined We I our returns.

think that Starbucks be pretty. to that's pretty or easily. the for So day, even hotels business the But not takes or use I over any is think it of will I time apartments the – end At material. mixed stabilize. Obviously, not it's

we as it's So there, profit make view more we but – it on. margin some amenity can there embedded some is in an that

grown what it's little because it bigger a COVID. during some And than over bit operations was we of took historically the

this expense. just an year material can not and give kind revenue number that's board. came some really magnitude The problem so order these we only of And and on overly of of of you

say – will you profit overly the help? that certainly net we the in be I'd it the is full-year, outline probably will that's So be to important. and not kind what Does XXXX is. can first But of

Linda Tsai

Yes. Thanks.

David Simon

you. Thank Sure.

Operator

from Craig question next with with proceed comes our your Citi. Please Mailman question. And

Craig Mailman

questions gain. just the on the Good quick a afternoon. one clarification $X.XX David, of earlier about net

and sole was with here reason there maybe the on this range this happened, takes here run this a maybe just get you something you lowering of driver, the by the $X.XX and any else? this up trying that are if or had raised have midpoint. guidance the guys this Could through operational, margin? to at guidance kind Just and that moved puts other quarter guys but the wasn't You would guidance not could ended up have offset something went sense around

David Simon

No. mean think always I pretty conservative. I we're

the beat So we'll always to – we're improve numbers. our and see trying how

and a always folks, takes history think I size. always puts a company And anybody frustrate have we we that I might our of do as that. to in but – good again, there's know

back-end it's market Again, zero got this earnings. we FFO back-half has billion volatility. off earnings, I – mean strip company $X.X got our of $XX assets. not doesn't billion that's we asset not be center billion some year far, to portfolio. mostly We're in there's going a thrown It's weighted. so have have value. We've a value of essentially, – But small $X.X

you, That FFO is rates. to earnings. our number XXX. I at of interest look rising hurt number is XXX, think – the gave was kind at was that estate our the which we remember That's real if $X.XX I by of

volatility you of you're we some OPI. to give comp think I NOI, because going have

monetization to going everything And it's a simple. always that, with on again, less OPI terms the really and lot it's – in books for associated billion, going $X.XX. and $X.XX, thing. think our of and right is $X.X else we're make investments to do I

So that's really it.

I obviously, has overage stabilized. rent think

at as more guidance. number, year. mean make little will a sure sales beat grow conservative conservative. want look be do it's to back-end which weighted the that So overage We the our we on we think our If we'll we we're

we But from is up headwind. of rates crystal rising back-end headwinds went with – OPI's the we biggest that. thing. has that's We've the anticipated. beginning guidance side the that we've And higher but And than as the more raised we been ball, been don't simple than thought second, then – weighted a probably have the we've originally important our That's year. had

the thing other operation remember value got put too basis you number, about I too is, would would on XXX still Are of and summer. you then add estate multiple a It's you NAV think there? from giving because basically share, so onetime Penney, of it. why contribution rest growth, their situation we couple $XX all funds We Whatever ABG that's them raised zero $XX XX% add of in that's We and from had points. their got it. this our – think company. are I at a is same FFO then charges. low enterprise of of the how the That's It's a of low. a we just own The multiple we money real the it because enjoy billion – and to

Craig Mailman

David. am. I Thanks,

David Simon

Okay.

argument? that buy You

Craig Mailman

We to about. need talk

David Simon

you listening. All right. Thank for

Okay.

questions, I So I owe of Don Wood. out we're and to it think

want be you loved do very to – it we not – Don, so were friendly. said, I we'll And you So period we then our story, we know Don said together. stole to we Now o’clock happy okay? a time and X:XX tell we what, want initially we're I

So X:XX. or not we Don only chose our wanted gave we but time, do move X:XX and the did X:XX option he of to whether he

and Johnny So you feel like is you. it Thank you hand Ed but Don. Carson. I our blame Don don't if time don't I'll over like time, his Don, like to McMahon or

Operator

you. today's concludes Thank This teleconference.

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

Simon Property (SPG) 2 Aug 232023 Q2 Earnings call transcript