Simon Property Group, Inc.

Simon reported Q2 2026 real estate FFO of $1.25 billion, or $3.29 per share, up from $1.15 billion, or $3.05 per share, in the prior-year quarter, an increase of 7.9%. Reported FFO was $3.12 per share versus $3.15 last year, with last year including a $0.21 per share noncash after-tax gain tied mainly to Catalyst Brands' deconsolidation of Forever 21. Domestic property NOI increased 8.5% year over year in the quarter and 7.6% for the first half; portfolio NOI including international properties at constant currency rose 8.3% in the quarter and 7.5% for the first half. Malls and Premium Outlets occupancy ended Q2 at 96%, and The Mills occupancy was 98.8%; average base minimum rent for Malls and Premium Outlets increased 6.3% year over year. Retailer sales in Malls and Premium Outlets were $838 per square foot, up 13.9%, while comparable sales increased 5.7% in Q2. The company raised full-year 2026 real estate FFO guidance to $13.20 to $13.30 per share, versus $12.73 last year, and said the midpoint is up $0.08 from prior guidance. Simon also declared a third-quarter dividend of $2.25 per share, up $0.10 or 4.7% year over year. It ended the quarter with about $9.3 billion in liquidity, net debt-to-EBITDA below 5.0x, and fixed charge coverage of 4.7x. During Q2, the company invested $211 million to repurchase shares and units, and it completed 8 secured loan transactions totaling $1.4 billion at a weighted average rate of 5.36%, issued EUR 500 million of senior notes at 3.65% for 5 years, and closed a $460 million 5-year term loan priced at SOFR plus 70 basis points.

Eli Simon said the quarter showed strong operating momentum, with accelerating NOI and FFO growth, solid traffic, and broad retailer demand across categories and geographies. He emphasized that Simon is winning with a mix of new brands, retenanting, experiential activations, and redevelopment, while also reinvesting into centers to improve the customer and retailer experience. His tone was confident and upbeat, but he repeatedly framed growth as coming from disciplined execution rather than chasing volume for its own sake.

Brian McDade focused on the financial drivers and balance sheet. He highlighted Q2 real estate FFO of $3.29 per share, domestic property NOI growth of 8.5%, portfolio NOI growth of 8.3%, and occupancy at 96% despite roughly 1 million square feet of bankruptcy-related space returning and being reletted. He also pointed to a stronger balance sheet with about $9.3 billion in liquidity, net debt-to-EBITDA below 5.0x, fixed charge coverage of 4.7x, and active capital markets execution, including secured loans, euro notes, and a term loan used to refinance revolver borrowings. He noted the dividend increase to $2.25 per share and reiterated that rising interest expense remains a headwind, with about $0.20 more to go for the year based on prior guidance.

Analysts focused on whether strong leasing and sales should lead to lower tenant improvements, higher rent upside, and better FAD growth. Management said TI levels are a mix of tenant demand, credit risk, and lease mix, and that the goal is not simply to cut TIs but to optimize cash flow and center quality. They also said sales are the main variable they cannot control: if current sales trends continue, results should exceed guidance, but guidance assumes some moderation later in the year. Other questions centered on retenanting, bankruptcy-related space, TRG, maturities, and Simon Media Network; management said the Saks Off Fifth space was largely the bankruptcy backfill, TRG has significant long-term upside, and the media/data initiative will be expanded through an upcoming Simon Media Network launch.