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Simon Acquires Two Outlet Centers

SPG MAC

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Simon Property Group, Inc. (SPG - Analyst Report), a real estate investment trust (REIT), has recently acquired two upscale outlet centers in Grand Prairie, Texas and Livermore, California from an unnamed seller for an undisclosed amount. Post-acquisition, Simon Property will handle the managerial responsibilities with 100% ownership in these two centers.

Spanning 417,000 square feet, the acquired property in Texas will be branded as Grand Prairie Premium Outlets. Located in the Dallas-Fort Worth metropolitan area, the center provides residents with fashionable and trendy merchandise from various designers and branded stores. The mall opened in August 2012 and is home to over 100 designer and name-brand stores.

The center in California will be branded as Livermore Valley Premium Outlets. The mall aggregates approximately 512,000 square feet and is located in the affluent East Bay area of San Francisco. Opened in November 2012, the outlet center is presently 100% leased and houses about 130 leading designer and name-brand stores.

 With the acquisitions, Simon Property aims to capitalize on the strong growth opportunities in the Texas and California markets. The upscale outlet centers are expected to bring high-quality retail options for consumers and have a positive impact on the marketplace. Consequently, the company expects the transaction to be accretive to earnings.

Headquartered in Indianapolis, Indiana, Simon Property is the largest publicly traded retail real estate company in North America engaged in 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 #3 Rank, which translates into a short-term Hold rating. We maintain our long-term Outperform recommendation on the stock. One of its competitors, The Macerich Company (MAC - Analyst Report) also holds a Zacks #3 Rank.

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