Simon Posts Positive Q2, Cites Robust Leasing Activity, Rising Retail Sales

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The company recovered 1 million square feet of space through Saks Off 5th closings, which should lead to attracting more productive retail tenants paying higher rents.

Senior Editor, Retail

Simon , the nation’s largest owner and operator of malls, mixed-use properties, outlet and lifestyle centers, is riding high off strong leasing activity and increasing shopper traffic and retail sales.

“During the second quarter, we signed more than 1,200 leases totaling over 4.8 million square feet,” Eli Simon , president, chief executive officer and chief operating officer, said during a conference call recapping the second-quarter results.

“The number of new deals signed in the quarter increased more than 20 percent compared to last year, and new deals represented about 28 percent of total lease square feet.

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“We have completed more than 87 percent of our 2026 expirations and are ahead of where we were at this time last year as we continue to negotiate 2027 and 2028 expirations with many tenants,” Simon added. “The pipeline of prospective deals continues to build, remaining well ahead of last year’s pace, reflecting continued broad-based tenant demand.”

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Simon, a real estate investment trust, recovered roughly 1 million square feet from Saks Off 5th, and is re-tenanting the space. Saks Off 5th closed 57 units, leaving just 12. Saks Off 5th is part of the Exemplar Luxury Group, formerly called Saks Global, which emerged from bankruptcy last June.

“They were paying $18 million in rent. The deals we have signed today — about half the spaces are already well in excess of that — and the rest are under discussions and near final deals. But we’ll basically take the $18 million and turn it into $44 million,” Simon said.

Simon didn’t specify which retailers or brands new to the Simon portfolio are signing leases, but he did say: “It’s across a variety of categories, across all geographies, across all platforms. Most exciting to me is our new and emerging brands, which are across a variety of sectors, including technology, athleisure, home, jewelry, and it’s very big in the Gen Z teen consumer.…When you walk one of our centers, you see something new, you see something that’s differentiated. And I think it’s resonating with customers.”

Addressing what merchandise categories are currently performing the best, Simon said, “Luxury remains very strong on the full-price side for sure.…Jewelry and watches remain strong and growing. No real sign of slowdown there. But if you look at the juniors brands, targeting the Gen Z customer, we’ve had 16 straight months of positive comps there, which is pretty staggering given all the macro noise out there.”

Simon also capitalized on the World Cup. “We also built on the momentum around the World Cup, running a coordinated activation strategy across our portfolio that featured fan experiences, watch parties, retailer collaborations and community programming,” Simon said.

On Monday, the company reported second-quarter real estate funds from operations reached $1.25 billion, or $3.29 per diluted share, compared to $1.15 billion, or $3.05 per diluted share, in the prior year, an increase of 7.9 percent.

Funds from operations were $1.19 billion, or $3.12 per diluted share, as compared to $1.19 billion, or $3.15 per diluted share, in the prior year, inclusive of the $0.21 per diluted share non-cash after-tax gain in the prior year period.

Net income attributable to common stockholders was $483.1 million, or $1.49 per diluted share, as compared to $556.1 million, or $1.70 per diluted share, in 2025. Net income for the second quarter of 2025 included a non-cash after-tax gain of $0.21 per diluted share from investment activity.

Domestic property net operating income increased 8.5 percent and at the portfolio level, increased 8.3 percent from the prior-year period.

The company raised its guidance for the year on estimated real estate FFO, or funds from operations, to $13.20 to $13.30 per share, from $13.10 to $13.25.

Also, the board raised its quarterly common stock dividend to $2.25 for the third quarter of 2026, an increase of $0.10, or 4.7 percent year-over-year. The dividend is payable on Sept. 30 to shareholders of record on Sept. 9.

“We delivered excellent financial and operational results this quarter,” Simon said in a prepared statement. “Real estate FFO per share grew 7.9 percent year-over-year, supported by consistent broad-based leasing demand, accelerated traffic increases, strong retailer sales growth and the contribution from acquisitions completed over the past year. Today, we are once again increasing our guidance for full-year 2026 real estate FFO per share.”

In other Simon statistics, occupancy at June 30 was 96 percent, unchanged from June 30, 2025.

Base minimum rent per square foot was $62.42 at June 30, compared to $58.70 at June 30, 2025, an increase of 6.3 percent.

Reported retailer sales per square foot was $838 for the trailing 12 months ended June 30, compared to $736 at June 30, 2025, an increase of 13.9 percent.

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