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Simon Property Group, Inc. (SPG - Analyst Report) collaborated with Columbus Realty Partners, Ltd. to construct a residential project – Domain at Phipps Plaza – at Phipps Plaza in Atlanta. The development is anticipated to start in September this year and occupancy is expected in late 2015.

The to-be-constructed Domain at Phipps Plaza will have 319 urban-style luxury residences. The property will be equipped with all modern and luxurious amenities such as a dog park with dog wash stations, a yoga court and rooftop terrace with a resident lounge.

As a matter of fact, the company has announced extensive refurbishment plans at Philips Plaza in April 2014 and this residence addition is a further extension of that arrangement. Besides this, other refurbishments at the property are underway, which include upgraded energy-efficient LED lighting, comfortable lounging areas and installation of concierge customer service center. These initiatives to improvise the mall are projected to finish before the commencement of the holiday season.

Phipps Plaza is positioned at the center of the Buckhead district and conveniently connected to the Midtown and Downtown Atlanta regions. This upscale shopping destination in the southeast boasts over 100 stores of renowned retailers and restaurateurs including Nordstrom Inc. (JWN - Analyst Report), Tiffany & Co. (TIF - Analyst Report), Giorgio Armani and Starbucks Corporation (SBUX - Analyst Report).

The abovementioned initiative for addition of residences at Philips Plaza is aimed at enhancing the value of the property. Lately, Simon Property has been focusing on strengthening ties with customers and tenants, and drive traffic. Consequently, last month, the company disclosed its partnership with elevate DIGITAL to launch interactive “digital concierge” network in a number of its U.S. shopping centers (Read: Simon & elevate DIGITAL to Install Digital Concierge Solutions).

Moreover, the spin-off of Washington Prime Group is expected to help the company increase the utilization of resources for expanding its global portfolio of larger malls, mills and premium outlets and effectively leverage on the improving spending habits of wealthier customers with the economy showing signs of recovery.

Although these initiatives will prove fruitful in the long term, the near term impact of these extensive developments and renovations cannot be avoided. Rising construction costs, entitlement delays and huge capital expenditures tend to pull down earnings, till these are completed and stabilized. Also, significant divestitures lead to dilution of the near-term earnings of this Zacks Rank #5 (Strong Sell) stock.

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