Simon Property Group reported strong earnings May 11 as the company endures a shifting retail scene and leadership transition for the first time in three decades.
The transition for the Indianapolis-based real estate company seems to be going smoothly so far less than two months after Simon Property Group CEO David Simon died March 22 at age 64 after a two-year battle with pancreatic cancer. His son Eli, Simon Chief Operating Officer, was named the new executive the next day.
Eli Simon took over at the helm of the company shortly after his father’s death, becoming only the second person to lead the company that his grandfather and great uncle founded since it went public in the mid-90s. At the top of his first earnings call as CEO, Eli Simon thanked those who offered support and saluted his father’s legacy in the shopping mall industry.
“I want to start by thanking all those who sent kind notes following my father’s passing. His impact on our company and our industry is truly powerful,” Eli Simon said in his first earnings call as CEO. He said there would be no major changes in leadership and added that the C-suite is “excited to keep doing what we are doing.”
Simon Property Group in the Monday evening call reported $479 million in net income to stockholders. The strong revenue report and smooth transition is welcome news to shareholders of the $60 billion company, as investors are continuing to bet on the company’s bullish stance that brick-and-mortar malls can survive in the age of the internet and the post-pandemic world.
“We are accelerating, and we have great opportunity ahead of us,” said executive vice president and chief financial officer Brian J. McDade. “We can do things that others can’t and quite honestly aren’t.”
Tenant occupancy sits at 96% in Simon-owned malls, up half a percent from the year before, and the company has roughly $1 billion worth of redevelopment projects in the pipeline, Eli Simon told investors.
One of those redevelopment projects is the Fashion Mall at Keystone at the Crossing in Indianapolis, where Simon Property Group plans to convert the old Saks Fifth Avenue box into an outward-facing shopping area and add office space. The renovation was originally expected to be completed in late 2026, but there are no exterior signs of development.
Sales per square feet in Simon malls were up 11.8% compared to the year prior. Simon is seeing growth particularly in jewelry, watches and junior brands, suggesting that Gen Z is making a mark in the balance books for retailers with brick-and-mortar stores.
Shares of Simon Property Group were down 0.5% at the close of the market on May 11.
Alysa Guffey writes business and development stories for IndyStar. Contact her at alysa.guffey@indystar.com.
This article originally appeared on Indianapolis Star: ‘Truly powerful’: Eli Simon hails father’s legacy in first call as CEO
Reporting by Alysa Guffey, Indianapolis Star / Indianapolis Star
USA TODAY Network via Reuters Connect
