Simon Property Group NYSE: SPG reported first-quarter 2026 results that exceeded its internal plan and raised its full-year real estate funds from operations guidance, citing stronger occupancy, higher shopper traffic and accelerating retailer sales across its portfolio.
Eli Simon, the company’s chief executive officer, president and chief operating officer, said the quarter reflected “solid fundamentals across all our platforms, the resilience of the consumer, and the strength and breadth of tenant demand” for Simon’s centers. He also opened the call by thanking those who sent notes following the death of his father, saying his impact on the company and the industry was “truly powerful.”
FFO Rises as NOI Growth Remains Strong
Brian McDade, executive vice president and chief financial officer, said real estate FFO totaled $1.2 billion, or $3.17 per share, in the first quarter, compared with $1.1 billion, or $2.95 per share, in the prior-year period. That represented 7.5% growth.
McDade said domestic and international operations contributed $0.27 of growth, driven by increased lease income and disciplined cost management. Higher interest expense and lower interest income were a combined $0.05 drag year over year, as expected.
Reported FFO was $2.91 per share and included $40 million, or $0.10 per share, of accelerated stock compensation expense. McDade said that expense reduced real estate FFO by $0.02 per share and other platform investments, net of tax, by $0.08 per share.
Domestic property net operating income increased 6.7% year over year in the quarter. McDade said approximately 120 basis points of that growth came from Simon’s acquisition of the remaining TRG interests. Portfolio NOI, which includes international properties at constant currency, also grew 6.7%.
The company increased its full-year 2026 real estate FFO guidance to a range of $13.10 to $13.25 per share, compared with $12.73 per share in 2025. McDade said the midpoint of the new range represents a 5% increase from last year.
Leasing Activity and Retailer Sales Accelerate
Simon said retailer demand remained broad-based, spanning new and legacy retailers across categories, platforms and geographies. During the first quarter, the company signed more than 1,100 leases totaling over 4.7 million square feet. About 25% of leasing volume came from new deals.
The company has completed more than 75% of its 2026 lease expirations, which Simon said is ahead of where it stood at the same time last year. He said the leasing pipeline is “significantly larger” than a year ago and includes legacy brands, new-to-portfolio concepts, luxury retailers, restaurants and local and regional tenants.
Average base minimum rent for malls and premium outlets increased 5.2% year over year, while mall rent increased 9.1%. Occupancy for malls and premium outlets was 96% at quarter-end, up 10 basis points from a year earlier. McDade said occupancy cost was 12.7%.
Retailer sales at malls and premium outlets were $819 per square foot, up 11.8%. Simon said total sales volume increased 5.6% over the trailing 12 months and 8.8% in the quarter, while comparable sales grew 6.5% in the first quarter. He cited strength in luxury, jewelry, athleisure and juniors.
During the question-and-answer portion of the call, Simon pushed back on the idea that the company has leverage over retailers, saying retailers have multiple options, including online channels. Still, he said tenants increasingly want to discuss lease expirations beyond 2026, including 2027, 2028 and 2029.
Development Pipeline Totals Billions of Dollars
Simon said the company has projects under construction at 29 centers, with its share of net costs at $1.06 billion and a blended yield of 9%. About half of the net cost is tied to mixed-use projects, including roughly 1,200 multifamily units at Brea Mall, Briarwood Mall and Northgate, along with more than 400 hotel keys at Northshore Mall, Roosevelt Field and The Domain.
The company also has redevelopments of former anchor boxes underway at Brea Mall and the Fashion Mall at Keystone, where it plans to add retail, restaurants, entertainment and fitness uses.
Simon said an additional $1 billion of projects could begin construction this year, including new developments, anchor redevelopments and international redevelopments and expansions. Beyond that, he said Simon has about $3 billion of projects in its pipeline that could start over the next several years.
He said the projects will be funded from internally generated cash flow and emphasized that the company has flexibility to adjust timing based on construction costs or market conditions. “We can be patient,” Simon said, adding that the company can also invest counter-cyclically.
Dividend Raised, Buybacks Continue
Simon announced a second-quarter dividend of $2.25 per share, up $0.15, or 7.1%, from the prior-year period. The dividend is payable June 30.
The company repurchased approximately 965,000 shares of common stock in the first quarter for $175 million, at an average purchase price of $181.59. Simon said the company expects to continue to be active on buybacks but will remain prudent depending on market conditions.
On the balance sheet, McDade said Simon completed 10 secured loan transactions totaling about $2.3 billion at a weighted average interest rate of 5.25%. The company also issued $800 million of senior notes to repay $800 million of notes that matured Jan. 15 and amended, restated and extended its $5 billion revolving credit facility at a 15-basis-point lower pricing grid.
Simon ended the quarter with approximately $8.7 billion of liquidity. McDade said net debt to EBITDA was 5.0 times and the fixed charge coverage ratio was 4.6 times.
Consumer Trends and Portfolio Strategy
Asked about the consumer, Simon said sales growth was broad-based, with the upper-end consumer performing well and hard luxury, jewelry and watches showing strong growth. He also cited strength in juniors brands that target Gen Z shoppers.
Food and beverage was “a touch softer,” Simon said, with comparable performance roughly flat. He also noted softness in tourist markets that rely on European and Canadian international travelers, while Florida markets, including Orlando, remained strong.
On leadership and capital allocation, Simon said the company is operating “business as usual” and does not expect a change in strategy. He said Simon will continue to evaluate development, acquisitions, share repurchases and dividends based on returns and shareholder value.
Simon also discussed the integration of Taubman assets, saying corporate integration was effectively completed by the end of April. He said the company is focused on reinvesting in assets including Green Hills in Nashville, International Plaza in Tampa and Cherry Creek in Denver, with more than $250 million of planned investment beginning later this year.
About Simon Property Group NYSE: SPG
Simon Property Group, Inc NYSE: SPG is a publicly traded real estate investment trust (REIT) that owns, develops and manages retail real estate properties. Its core business activities include acquisition, development, leasing and property management of regional malls, outlet centers and mixed‑use retail destinations. The company operates retail brands that include high‑profile regional shopping centers and the Premium Outlets platform, and it provides services such as tenant leasing, marketing, property operations and capital projects to optimize asset performance.
Simon's portfolio spans a broad mix of enclosed malls, open‑air centers, outlet properties and mixed‑use developments, and the company pursues redevelopment and repositioning to adapt properties to changing consumer and retail trends.
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