david Simon

David Simon is ready to open the mall back up — but it ain’t easy. 

The chairman, chief executive officer and president of Simon Property Group told analysts on a conference call Monday that the company opened 77 properties last week and that half of its U.S. portfolio would be open next week. 

“We are of course working in conjunction with state and local governments on our reopening plans,” Simon said. “Shopper response to our reopening has been positive. And sales of many tenants have been better than their initial expectations.”

That doesn’t mean life is returning to normal, the malls are opening up with extra protections against COVID-19, only some retailers are returning and it’s still not clear just how long it will take consumers across the country to bounce back. 

And the usually outspoken Simon kept uncharacteristically quiet on certain key topics. 

The ceo declined to get into the specifics of rent negotiations with retailers that are not keen to pay rent on stores that are closed, noting that the talks should be conducted in private. He did, though, make his overarching position clear.

“The reality is we have a lease and they have to pay,” Simon said of retailers. “So we don’t have to get into semantics and the way I also think about it, obviously if they decide they’re going to — they are in bankruptcy, then that’s when they get the right to reject the lease.”

The list of companies that can make that choice includes J. Crew Group Inc. and Neiman Marcus Group and is growing longer. 

Simon also avoided talking about the pending $3.6 billion deal to buy 80 percent of competitor Taubman Center Inc. 

“We will not make any comments or provide any updates on this call about the status of the Taubman transaction,” Simon said preemptively. “We will provide information as and when appropriate.”

Pressed by an analyst who noted that silence would be perceived negatively by some, Simon said he still passed. 

That calls the deal into some doubt, which only makes sense given how radically the world has changed, even since the buyout was signed Feb. 10. If the transaction did fall through, it wouldn’t be the only one. Sycamore Partners sued to get out of its deal to buy control of Victoria’s Secret from L Brands Inc., ultimately scuttling the deal.

But don’t count Simon out of the deal market. The company has investments in Nautica, Aeropostale and Forever 21 and could step in to buy more, although the focus right now is managing the current portfolio.

“We’re only taking inbound calls,” he said. “If people want us to think about something, we’re happy to do it, but we’re not out there running around soliciting investments. We’re in a position to be opportunistic if we think it helps our business.” 

The landlord held up reasonably well for the quarter ended March 31 given that the COVID-19 crisis didn’t force it to close its malls until March 18. 

“Business was off to a good start in January and February, with shopper traffic, tenant demand, reported retailer sales and other underlying portfolio fundamentals trending at or above our expectations,” Simon said in a statement. 

Net income attributable to common stockholders fell to $437.6 million from $548.5 million a year earlier. Funds from operations — the standard yardstick for real estate investment trusts like Simon — fell to $980.6 million from $1.08 billion.  

Simon said comparable property net operating income for the quarter was flat.

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