Analyst Report: Simon Property Group, Inc.


Simon Property Group Inc., based in Indianapolis, is a retail REIT that is one of the largest owners of high-end malls, outlet centers, and lifestyle destinations in North America, Asia, and Europe. The company has expanded its profile by investing in the retail operations of several well-known brands, including JC Penny and SPARC (Aeropostale, Reebok, Nautica, Izod, and Forever 21). NOI from these retail investments is approximately 8% of total NOI. SPG also operates Simon Brand Ventures, which offers appraisals and real estate services.

Simon owns or has interests in 235 properties with 195 million square feet of leasable space. U.S. malls and outlets account for approximately 72% of NOI. Properties in California, Florida, and Texas account for just under half of the portfolio. Additionally, the company has an 80% interest in the Taubman Group and a 22% interest in Klepierre, a Paris-based real estate firm. Recent development activity includes construction of a lifestyle center in Atlanta and premium outlets in Tokyo and South Korea.

The REIT has a varied tenant base. Its largest U.S. tenant, Gap Inc., leases almost 300 locations, but accounts for less than 3% of base minimum rents. SPG is a member of the S&P 500 and has a market cap of $38.2 billion.

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