![]() ![]() Some of these are marketing, logistics, finance, and these days omnichannel. Success by a retail chain depends on succeeding at many elements. They have steadily invested in retail businesses starting in 2016 and accelerating during the pandemic. In recent years Simon has moved beyond the landlord business. The resulting increase in Net Operating Income, or NOI, is near 1%. Simon expects the rate of return on development and redevelopment spending to average 7%. We will discuss how they fund all this spending below. In addition, Simon has been spending about $150M per year recently on new developments. Investments in redevelopments are running in the ballpark of $400M per year. The earnings call revealed that the tenant bankruptcy watchlist today is lower than it has been for many years. This makes sense with the emergence of retail from its period of retrenchment. From the Q4 2022 earnings call, 2023 will be much like 2022.Ĭapex today is smaller than it was before the pandemic, mainly because of a decrease in redevelopment projects. The annual numbers have varied a lot in recent years for obvious reasons. Here is the six-year history of the Simon’s funds for capex. These malls increase income through raising rents and through redevelopments and new developments. They and Brookfield Asset Management are the major owners today of shopping malls. They have also been a major consolidator in the mall space.Īt this point, Simon owns several dozen enclosed malls totaling more than 100M square feet, several dozen of their Premium Outlet Centers totaling about 30M square feet, a portfolio known as The Mills totaling about 20M square feet, the Taubman Realty Group, and a few other properties. Simon has owned a lot of malls, seemingly forever. Adding in their debt management lets one sensibly estimate how fast they can grow, and then consider valuation. It then takes you through their Net Operating Income, costs other than operating costs, distributions, and sources of capital. It first takes you through their business, their recent expansions into retail, and their progress since the pandemic. This article starts with my largest holding, Simon Property Group ( NYSE: SPG). My current plan is to look very deeply at my holdings annually, after their new annual reports are filed. But it seems silly to invest a lot of energy in reading the tea leaves of small changes in quarterly revenue and expense items. Since we have quarterly reporting, it makes sense to check for dramatic developments quarterly. Warren Buffett has expressed his opinion that a year is too short a time on which to evaluate and understand a company. ![]() These firms rarely have anything very dramatic happen, which is sort of the idea. My investments are almost entirely in solid, blue-chip firms, for defensive reasons. That was as protection against a potential repeat of the 1970s. In part this reflected an increased focus on dividend income. But the price per share is still down 29 percent compared to this time last year.My regular readers know that my portfolio became more concentrated and more stable over the past two years. Simon Property Group’s (SPG) stock price seems to have had a reaction to the news, having risen 0.82 percent between when the markets opened and 11:09 a.m. Its investments such as One Times Square, Chelsea Market and Industry City in New York City, Ponce City Market in Atlanta and Ghirardelli Square in San Francisco are expected to diversify Simon’s mall-centric portfolio. Jamestown has $13 billion in assets under management. Terms of the deal were not disclosed, but it is expected to close near the end of the quarter, according to Simon Property Group. “The partnership with Simon will help us achieve that goal and position us for our next chapter as we scale our differentiated products in an increasingly global world.” “At Jamestown, our goal is to be the best mixed-use investor globally, focusing on creating innovation hubs and community centers,” Phillips said in a statement. Jamestown will continue to operate independently under the leadership of CEO Matt Bronfman and President Michael Phillips, according to a joint press release, while Christoph Kahl will transition to Jamestown’s board of directors for daily involvement in that company’s operations. Jamestown is well positioned for future growth.” “Their strong leadership team and track record align with our focus on investing in best-in-class partners. “We have been impressed with Jamestown’s combination of sector expertise, dedication to driving creative placemaking, and reputation in the fund management business,” David Simon, chairman, president and CEO of Simon Property Group, said in a statement. SEE ALSO: Sunday Summary: It’s Not Always Sunny in Phoenix ![]()
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