Simon “out of deal business,” will invest in new construction, renovations instead


WASHINGTON, D.C. – July 29, 2015 – (RealEstateRama) — Simon is out of the deal business. After an unsuccessful attempt to buy rival REIT Macerich earlier this year, Indianapolis–based Simon is reinvesting its money in its own business, which happens to be booming, executives said on the firm’s second-quarter earnings call. Simon plans to repurchase $2 billion worth of its shares, and bought $505 million worth during the quarter alone. “We don’t see any big deals on the horizon for us, so we are obviously very focused on development, redevelopment,” said chairman and CEO David Simon. “We’re out of the big deal business. That’s not to say we might find a deal here or there, but the balance sheet is sacrosanct to us.” The company currently has $1.7 billion worth of redevelopment going on at 28 properties. In addition to several new outlet centers, Simon is also building The Shops at Clearfork, a Neiman Marcus-anchored center that will open in Fort Worth, Texas, in 2017.

Simon said second-quarter FFO was $955.4 million, compared to $783.8 million in the prior year period, a 21.8 percent increase. Net income was $472.9 million, compared to $406.6 million, in the prior year period. Releasing spreads averaged 18.4 percent during the quarter. Total sales per square foot grew 2 percent year on year to $620. Same-property NOI grew 3.6 percent.

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