Simon Property Group, Inc.

Real estate FFO was $1.25 billion, or $3.29 per share, versus $1.15 billion, or $3.05 per share, in the prior-year quarter, up 7.9%. Reported FFO was $3.12 per share versus $3.15 per share last year, with the prior year benefiting from a $0.21 per share noncash after-tax gain related primarily to Catalyst Brands’ deconsolidation of Forever 21. Domestic property NOI increased 8.5% year over year in Q2 and 7.6% in the first half; portfolio NOI, including international properties at constant currency, rose 8.3% in Q2. Occupancy in Malls and Premium Outlets was 96%, and The Mills was 98.8%; average base minimum rent in Malls and Premium Outlets increased 6.3% year over year, and occupancy cost was 12.5%. The company announced a third-quarter dividend of $2.25 per share, up $0.10 or 4.7% year over year, and repurchased about 793,000 shares and 238,000 LP units for $211 million at an average price of $205.10 per share. Management increased full-year 2026 real estate FFO guidance to $13.20-$13.30 per share from the prior range, implying an $0.08 increase at the midpoint versus the previous outlook and comparing with $12.73 last year.

Eli Simon said the quarter reflected “excellent financial and operational results,” with stronger traffic, solid sales growth, and broad-based tenant demand across categories and geographies. He emphasized that the portfolio is benefiting from reinvestment, redevelopment, and a large pipeline of new deals, and repeatedly framed the business as well positioned to capture demand through better merchandising mix, higher rents, and improved centers. His tone was confident and constructive, while stressing that growth comes from both leasing economics and continued capital investment.

Brian McDade highlighted Q2 real estate FFO of $3.29 per share, domestic NOI growth of 8.5%, and portfolio NOI growth of 8.3% on a constant-currency basis. He noted that higher interest expense and lower interest income were a $0.06 drag year over year, while acquisitions, including the remaining TRG interest, contributed about 120 basis points to NOI growth. On capital structure, he cited approximately $9.3 billion of liquidity, net debt-to-EBITDA below 5.0x, fixed charge coverage of 4.7x, $1.4 billion of secured loans at a 5.36% weighted average rate, EUR 500 million of senior notes at 3.65% for 5 years, and a $460 million 5-year term loan at SOFR plus 70 basis points. He also flagged that the company is still working through about $0.20 of additional interest-expense headwind for the rest of the year under current market conditions.

Analysts focused on tenant improvements, retention, rent upside on upcoming expirations, and how much of the sales strength would flow into overage rents and 2026 results. Management said TI levels are driven by tenant mix, demand, and available supply, and that the company is willing to spend differently depending on credit quality and the role a tenant plays in the center. On the 1 million square feet of bankruptcy-related space, management said most of it was Saks Off Fifth boxes and that the replacements should turn roughly $18 million of rent into about $44 million, with most of the benefit landing in 2027 rather than 2026. They also said guidance assumes some moderation in sales, but if current sales trends persist, results could come in above the outlook.