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SPG's Q2 FFO Top Estimates on Leasing Strength, Guidance Raised
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Key Takeaways
SPG's Q2 FFO and revenues beat estimates, supported by leasing demand and retailer sales growth.
Lease income rose 20.3%, while retailer sales per square foot jumped 13.9% year over year.
SPG raised 2026 FFO guidance and lifted its quarterly dividend 4.7% year over year.
Simon Property Group, Inc. (SPG - Free Report) delivered second-quarter 2026 Real Estate Funds From Operations (FFO) of $3.29 per share, topping the Zacks Consensus Estimate of $3.18 by 3.46% and increasing 7.9% year over year. Total revenues of $1.79 billion beat the consensus mark of $1.71 billion by 4.49% and rose 19.5% from the year-ago quarter.
Broad-based leasing demand, higher traffic, retailer sales growth and contributions from acquisitions supported results. U.S. Malls and Premium Outlets occupancy remained 96%, unchanged year over year, while retailer sales per square foot jumped 13.9%.
SPG's Lease Income Powers Revenue Growth
Lease income increased 20.3% year over year to $1.66 billion. Fixed lease income reached $1.35 billion compared with $1.13 billion a year earlier, while variable lease income increased to $310.6 million from $246.7 million.
Management fees and other revenues rose 7.7% to $40.8 million. Other income advanced 11.1% to $90.1 million, aided by higher mixed-use and franchise operations income and other ancillary sources.
SPG’s Property Metrics Stay Firm
Base minimum rent per square foot for U.S. Malls and Premium Outlets climbed 6.3% year over year to $62.42. Reported retailer sales per square foot increased to $838 for the trailing 12 months ended June 30, 2026 from $736 a year earlier.
The Mills portfolio remained highly occupied at 98.8%, down from 99.3% a year ago. Its base minimum rent per square foot increased to $42.28 from $37.65, indicating higher rental rates across the portfolio.
SPG Posts Strong Property-Level NOI Growth
Domestic property net operating income (NOI) increased 8.5% year over year to $1.51 billion. Portfolio NOI, which includes domestic and international properties, rose 8.3% to $1.60 billion.
Beneficial interest of the combined NOI increased 6.4% to $1.75 billion. International property NOI totaled $96 million compared with $91.3 million in the prior-year quarter, while NOI from other platform investments declined to $31.8 million from $41.7 million.
SPG Sees Higher Costs & Interest Expense
Total operating expenses increased 28.1% year over year to $966.5 million. Depreciation and amortization rose to $459.9 million from $339.1 million, while property operating expenses increased to $171.4 million from $139.8 million.
Interest expense climbed 20.8% to $281.2 million.
SPG Maintains Ample Balance Sheet Liquidity
Simon ended the June 2026 quarter with approximately $9.3 billion of liquidity, comprising $1.7 billion of cash on hand, including its share of joint venture cash, and $7.6 billion of available capacity under its revolving credit facilities.
During the second quarter, SPG completed eight secured loan transactions totaling approximately $1.4 billion at a weighted average interest rate of 5.36%. It also issued €500 million of five-year senior notes carrying a 3.65% coupon and closed a $460 million five-year term loan priced at SOFR plus 0.70%.
SPG Raises 2026 Real Estate FFO Outlook
Simon increased its full-year 2026 Real Estate FFO per share guidance to $13.20-$13.30 from $13.10-$13.25. The midpoint of the updated range is 8 cents above the midpoint of the previous outlook. The Zacks Consensus Estimate of $13.21 is within the guided range.
The company also declared a third-quarter common stock dividend of $2.25 per share, up 4.7% year over year. The dividend will be payable on Sept. 30, 2026, to shareholders of record on Sept. 9, 2026.
Federal Realty Investment Trust (FRT - Free Report) reported second-quarter 2026 core FFO per share of $1.88, up 6.8% year over year and above the Zacks Consensus Estimate of $1.85.
Total revenues increased 7.8% year over year to $335.7 million and surpassed the consensus mark of $333.5 million by 0.66%. FRT’s results reflected higher rental income, record comparable leasing volume and growth in adjusted comparable property operating income. FRT carries a Zacks Rank #3.
Regency Centers Corporation (REG - Free Report) reported second-quarter 2026 NAREIT FFO per share of $1.21, beating the Zacks Consensus Estimate of $1.20 by 0.8%. The metric increased 4.3% from the year-ago quarter.
Total revenues of $413.5 million rose 8.6% year over year and topped the consensus mark of $405 million by 2.1%. The company’s results reflected solid leasing demand, with same-property NOI advancing 3.8%. REG carries a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
View the Zacks #1 Rank List
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SPG's Q2 FFO Top Estimates on Leasing Strength, Guidance Raised
Key Takeaways
Simon Property Group, Inc. (SPG - Free Report) delivered second-quarter 2026 Real Estate Funds From Operations (FFO) of $3.29 per share, topping the Zacks Consensus Estimate of $3.18 by 3.46% and increasing 7.9% year over year. Total revenues of $1.79 billion beat the consensus mark of $1.71 billion by 4.49% and rose 19.5% from the year-ago quarter.
Broad-based leasing demand, higher traffic, retailer sales growth and contributions from acquisitions supported results. U.S. Malls and Premium Outlets occupancy remained 96%, unchanged year over year, while retailer sales per square foot jumped 13.9%.
SPG's Lease Income Powers Revenue Growth
Lease income increased 20.3% year over year to $1.66 billion. Fixed lease income reached $1.35 billion compared with $1.13 billion a year earlier, while variable lease income increased to $310.6 million from $246.7 million.
Management fees and other revenues rose 7.7% to $40.8 million. Other income advanced 11.1% to $90.1 million, aided by higher mixed-use and franchise operations income and other ancillary sources.
SPG’s Property Metrics Stay Firm
Base minimum rent per square foot for U.S. Malls and Premium Outlets climbed 6.3% year over year to $62.42. Reported retailer sales per square foot increased to $838 for the trailing 12 months ended June 30, 2026 from $736 a year earlier.
The Mills portfolio remained highly occupied at 98.8%, down from 99.3% a year ago. Its base minimum rent per square foot increased to $42.28 from $37.65, indicating higher rental rates across the portfolio.
SPG Posts Strong Property-Level NOI Growth
Domestic property net operating income (NOI) increased 8.5% year over year to $1.51 billion. Portfolio NOI, which includes domestic and international properties, rose 8.3% to $1.60 billion.
Beneficial interest of the combined NOI increased 6.4% to $1.75 billion. International property NOI totaled $96 million compared with $91.3 million in the prior-year quarter, while NOI from other platform investments declined to $31.8 million from $41.7 million.
SPG Sees Higher Costs & Interest Expense
Total operating expenses increased 28.1% year over year to $966.5 million. Depreciation and amortization rose to $459.9 million from $339.1 million, while property operating expenses increased to $171.4 million from $139.8 million.
Interest expense climbed 20.8% to $281.2 million.
SPG Maintains Ample Balance Sheet Liquidity
Simon ended the June 2026 quarter with approximately $9.3 billion of liquidity, comprising $1.7 billion of cash on hand, including its share of joint venture cash, and $7.6 billion of available capacity under its revolving credit facilities.
During the second quarter, SPG completed eight secured loan transactions totaling approximately $1.4 billion at a weighted average interest rate of 5.36%. It also issued €500 million of five-year senior notes carrying a 3.65% coupon and closed a $460 million five-year term loan priced at SOFR plus 0.70%.
SPG Raises 2026 Real Estate FFO Outlook
Simon increased its full-year 2026 Real Estate FFO per share guidance to $13.20-$13.30 from $13.10-$13.25. The midpoint of the updated range is 8 cents above the midpoint of the previous outlook. The Zacks Consensus Estimate of $13.21 is within the guided range.
The company also declared a third-quarter common stock dividend of $2.25 per share, up 4.7% year over year. The dividend will be payable on Sept. 30, 2026, to shareholders of record on Sept. 9, 2026.
SPG’s Zacks Rank
Currently, SPG carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Simon Property Group, Inc. Price, Consensus and EPS Surprise
Simon Property Group, Inc. price-consensus-eps-surprise-chart | Simon Property Group, Inc. Quote
Performance of Other Retail REITs
Federal Realty Investment Trust (FRT - Free Report) reported second-quarter 2026 core FFO per share of $1.88, up 6.8% year over year and above the Zacks Consensus Estimate of $1.85.
Total revenues increased 7.8% year over year to $335.7 million and surpassed the consensus mark of $333.5 million by 0.66%. FRT’s results reflected higher rental income, record comparable leasing volume and growth in adjusted comparable property operating income. FRT carries a Zacks Rank #3.
Regency Centers Corporation (REG - Free Report) reported second-quarter 2026 NAREIT FFO per share of $1.21, beating the Zacks Consensus Estimate of $1.20 by 0.8%. The metric increased 4.3% from the year-ago quarter.
Total revenues of $413.5 million rose 8.6% year over year and topped the consensus mark of $405 million by 2.1%. The company’s results reflected solid leasing demand, with same-property NOI advancing 3.8%. REG carries a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.