Simon Property to Spend $800M on Mixed-Use This Year

Simon Property Group’s operations continue to grow with five to six mixed-use projects on the way this year after completing 13 significant re-developments a year ago.

This new construction represents approximately $800 million of spend from Orange County to Ann Arbor, to Boston, to Seattle, to Roosevelt Field, according to the company’s recent earnings call.

“We expect to fund these redevelopments to mixed-use projects with our internally generated cash flow of over $1.5 billion after dividend payments,” David Simon, Chairman, Chief Executive Officer and President said on the call, calling those “more of a 2025 or 2026 story.”

During 2023, Simon Property Group completed $12 billion in financing activities, including three senior note offerings for approximately $3.1 billion.

Simon said during the call that the mixed-use development and the redevelopment of its department store boxes are “probably the most interesting and exciting things that we’re doing on the ground level” and that he’s also excited about growing its outlet business in Southeast Asia.

“It’s an incredibly robust market, young population,” he said.

Simon said the evolving retail mix in his company’s portfolio has also been beneficial.

“There are more and more entrepreneurs, there are more and more exciting retailers that are coming up with great concepts, proving them out, and then realizing that our centers are a good place for them to do business,” he said.

The firm is in a good position given the historically low supply in big properties across the country, Simon said.

“There used to be 40 million square feet of retail real estate built every year, now there is essentially less than a few million here and there,” he said. “Then there’s been obsolescence, which makes the supply shrink as well.”

Simon said the company has 10 asset “boxes” that are either currently under construction or in process.

“Eventually some of those could be opportunities for us to buy and redevelop,” Simon said. “We haven’t made deals on those just because the bid and the ask has been too great,” and could be made into a mixed-use development.