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Simon Property Group, Inc. (SPG - Analyst Report), a real estate investment trust (REIT),  has recently formed a joint venture with Tanger Factory Outlet Centers Inc, (SKT) to  develop two upscale outlet centers in Charlotte, North Carolina and Columbus, Ohio. Both parties would hold a 50% stake in the two centers which are expected to open in 2014.

Spanning 350,000 square feet, the center in Charlotte will be branded as Charlotte Premium Outlets. Located at the interchange of two major thoroughfares of the city, the center will provide the residents in the area with fashionable, trendy merchandise from various designers and branded stores. The mall is expected to house approximately 90 designer and name-brand stores when it is fully unveiled.  Tanger will be the site developer and supervisor, while Simon Property will handle the management and marketing for the project.

The center in Columbus will be branded as Tanger Outlets and will aggregate approximately 350,000 square feet. It will be located on I-71, 20 miles north of downtown Columbus. The outlet centers are likely to benefit both partners by capitalizing on the continuous growth opportunities in the Charlotte and Columbus markets. These types of upscale developments are expected to bring high-quality retail options for consumers and have a positive impact on the marketplace. Both new projects are also expected to create significant employment opportunities with approximately 300 construction jobs at each site and over 900 full and part-time retail management and sales jobs once the centers are open.

Headquartered in Indianapolis, Indiana, Simon Property is the largest publicly traded retail real estate company in North America engaged in the acquisition, ownership and lease of a diverse portfolio of shopping malls.  The company’s international presence gives it a more sustainable long-term growth story compared to its domestic-focused peers. The geographic and product diversity of the company insulates it from market volatility to a great extent and provides a steady source of income.

Simon Property currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We maintain our long-term Outperform recommendation on the stock. One of its competitors, The Macerich Company (MAC - Analyst Report) holds a Zacks #3 Rank, which translates into a short term Hold rating.

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