We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Total revenues rose 13.3% year over year to $1.81 billion and surpassed the consensus mark by 4.9%. Continued leasing momentum, higher rents and stronger retailer sales supported results. Occupancy at U.S. Malls and Premium Outlets edged up to 96.5%.
SPG's Lease Income Drives Revenue Growth
Lease income increased 15.7% year over year to $1.68 billion. Fixed lease income reached $1.35 billion, up from $1.17 billion, while variable lease income rose to $327.25 million from $279.38 million.
Management fees and other revenues grew to $46.18 million from $36.93 million. However, other income fell to $86.98 million from $111.72 million.
Simon Property's Rental and Retail Metrics Improve
Base minimum rent per square foot at U.S. Malls and Premium Outlets advanced 6.1% to $62.75 from $59.14. Reported retailer sales per square foot reached $852 for the trailing 12 months, up 14.8% from $742.
The Mills portfolio was 98.9% occupied, down from 99.4% a year earlier, but its base minimum rent climbed to $42.44 per square foot from $38.25. During the first nine months, Simon signed 853 new leases versus 819 a year earlier at an average initial base rent of $76.03 per square foot.
SPG Reports Higher Property-Level NOI
Domestic property net operating income (NOI) increased 6.6% to $1.54 billion from $1.44 billion a year earlier. Portfolio NOI, which includes international properties, rose 6.7% to $1.63 billion.
International property NOI grew to $96.47 million from $90.14 million. However, NOI from other platform investments declined to $30.67 million from $54.08 million, while Klépierre NOI eased to $64.98 million from $69.33 million. Beneficial interest in combined NOI increased 1.9% to $1.78 billion.
Simon Property Faces Higher Operating Costs
Total operating expenses increased 28.1% year over year to $1.01 billion from $788.66 million. Depreciation and amortization rose to $510.77 million from $338.64 million, while property operating expenses climbed to $180.83 million from $149.81 million. Interest expense increased to $287.59 million from $242.79 million.
SPG Details Its Redevelopment Investments
At September-end, redevelopment projects represented $1.15 billion in expected net investment at the company's share, with a projected stabilized return of 9%.
The company forecast $412.07 million in redevelopment investment for 2026 and $280.76 million for 2027. After construction loans and other funding, anticipated net cash investment for the two years totaled $570.22 million.
Simon Property Maintains Ample Liquidity
During the quarter, Simon completed an $800 million two-tranche senior notes offering with a weighted-average coupon of 5.45% and a term of 7.7 years. It also closed seven secured loan transactions totaling approximately $970 million at a weighted-average interest rate of 6.33%.
The company ended September with approximately $9 billion of liquidity, including $1.3 billion in cash, inclusive of its share of joint venture cash, and $7.7 billion in available revolving credit capacity. Simon also repurchased approximately 1.14 million shares for $236.5 million during the quarter.
SPG Raises 2026 FFO Guidance and Dividend
Simon raised its 2026 Real Estate FFO outlook to $13.30-$13.40 per share from $13.20-$13.30. The revised midpoint of $13.35 represents a 10-cent increase. The consensus estimate is pegged at $13.24, below the guided range.
The company also declared a quarterly common stock dividend of $2.30 per share for the fourth quarter, up 4.5% year over year. The dividend is payable on Dec. 31, 2026, to shareholders of record as of Dec. 10.
Federal Realty Investment Trust (FRT - Free Report) reported third-quarter core FFO per share of $1.87, which rose 5.6% year over year and beat the Zacks Consensus Estimate by 1.1%. Results reflected higher rental income, strong comparable retail leasing activity and growth in adjusted comparable property operating income.
Kimco Realty Corporation (KIM - Free Report) reported third-quarter 2026FFO of 47 cents per share, which rose 6.8% from a year earlier and outpaced the Zacks Consensus Estimate of 46 cents. Strong leasing and higher minimum rents supported growth, while lower above- and below-market rent adjustments and other rental property income tempered gains.
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
Image: Bigstock
SPG Q3 FFO Tops Estimates on Leasing Strength, Outlook Raised
Key Takeaways
Simon Property Group (SPG - Free Report) delivered third-quarter 2026 Real Estate funds from operations (FFO) of $3.37 per share, beating the Zacks Consensus Estimate by 1.5%. The figure climbed 4.7% from $3.22 a year earlier.
Total revenues rose 13.3% year over year to $1.81 billion and surpassed the consensus mark by 4.9%. Continued leasing momentum, higher rents and stronger retailer sales supported results. Occupancy at U.S. Malls and Premium Outlets edged up to 96.5%.
SPG's Lease Income Drives Revenue Growth
Lease income increased 15.7% year over year to $1.68 billion. Fixed lease income reached $1.35 billion, up from $1.17 billion, while variable lease income rose to $327.25 million from $279.38 million.
Management fees and other revenues grew to $46.18 million from $36.93 million. However, other income fell to $86.98 million from $111.72 million.
Simon Property's Rental and Retail Metrics Improve
Base minimum rent per square foot at U.S. Malls and Premium Outlets advanced 6.1% to $62.75 from $59.14. Reported retailer sales per square foot reached $852 for the trailing 12 months, up 14.8% from $742.
The Mills portfolio was 98.9% occupied, down from 99.4% a year earlier, but its base minimum rent climbed to $42.44 per square foot from $38.25. During the first nine months, Simon signed 853 new leases versus 819 a year earlier at an average initial base rent of $76.03 per square foot.
SPG Reports Higher Property-Level NOI
Domestic property net operating income (NOI) increased 6.6% to $1.54 billion from $1.44 billion a year earlier. Portfolio NOI, which includes international properties, rose 6.7% to $1.63 billion.
International property NOI grew to $96.47 million from $90.14 million. However, NOI from other platform investments declined to $30.67 million from $54.08 million, while Klépierre NOI eased to $64.98 million from $69.33 million. Beneficial interest in combined NOI increased 1.9% to $1.78 billion.
Simon Property Faces Higher Operating Costs
Total operating expenses increased 28.1% year over year to $1.01 billion from $788.66 million. Depreciation and amortization rose to $510.77 million from $338.64 million, while property operating expenses climbed to $180.83 million from $149.81 million. Interest expense increased to $287.59 million from $242.79 million.
SPG Details Its Redevelopment Investments
At September-end, redevelopment projects represented $1.15 billion in expected net investment at the company's share, with a projected stabilized return of 9%.
The company forecast $412.07 million in redevelopment investment for 2026 and $280.76 million for 2027. After construction loans and other funding, anticipated net cash investment for the two years totaled $570.22 million.
Simon Property Maintains Ample Liquidity
During the quarter, Simon completed an $800 million two-tranche senior notes offering with a weighted-average coupon of 5.45% and a term of 7.7 years. It also closed seven secured loan transactions totaling approximately $970 million at a weighted-average interest rate of 6.33%.
The company ended September with approximately $9 billion of liquidity, including $1.3 billion in cash, inclusive of its share of joint venture cash, and $7.7 billion in available revolving credit capacity. Simon also repurchased approximately 1.14 million shares for $236.5 million during the quarter.
SPG Raises 2026 FFO Guidance and Dividend
Simon raised its 2026 Real Estate FFO outlook to $13.30-$13.40 per share from $13.20-$13.30. The revised midpoint of $13.35 represents a 10-cent increase. The consensus estimate is pegged at $13.24, below the guided range.
The company also declared a quarterly common stock dividend of $2.30 per share for the fourth quarter, up 4.5% year over year. The dividend is payable on Dec. 31, 2026, to shareholders of record as of Dec. 10.
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 third-quarter core FFO per share of $1.87, which rose 5.6% year over year and beat the Zacks Consensus Estimate by 1.1%. Results reflected higher rental income, strong comparable retail leasing activity and growth in adjusted comparable property operating income.
Kimco Realty Corporation (KIM - Free Report) reported third-quarter 2026FFO of 47 cents per share, which rose 6.8% from a year earlier and outpaced the Zacks Consensus Estimate of 46 cents. Strong leasing and higher minimum rents supported growth, while lower above- and below-market rent adjustments and other rental property income tempered gains.
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.