Senior Debt Issuance Fuels Simon Property Group Growth

Simon Property Group is issuing $1.5B in senior notes to refinance $1.1B in debt maturing next month.
The two-part offering includes $700M due in 2030 at 4.4% and $800M due in 2035 at 5.1%, replacing debt previously carrying a 3.5% rate.
The REIT is leveraging strong retail sector performance, with Q2 revenue up 2.8% YoY and mall occupancy at 96%.

Key Takeaways

Refinancing Strategy

Simon Property Group is tapping the bond market to raise $1.5B, reports Bisnow. The funds will come from senior debt offerings. The company plans to use the proceeds to refinance $1.1B in loans that are set to mature next month. The Indianapolis-based retail REIT is issuing $700M in notes due 2030 at a 4.4% interest rate and $800M maturing in 2035 at 5.1%.

The move will raise Simon’s borrowing costs — the maturing loans carried a 3.5% interest rate — but gives the company longer-dated capital as it eyes continued growth.

Terms And Use Of Proceeds

The combined debt offering has a weighted average term of 7.8 years and a blended coupon rate of 4.8%. Proceeds will go toward repaying the $1.1B in near-term obligations and for general corporate purposes, including repaying other unsecured debt.

The issuance is expected to close August 19, with BBVA Securities, J.P. Morgan, TD Securities, and Wells Fargo Securities leading the book.

Strong Financial Footing

Simon’s decision to refinance comes as it benefits from solid retail momentum. The company reported $1.5B in second-quarter revenue — up 2.8% year-over-year and exceeding analyst expectations by about $110M.

Year-to-date, Simon has generated nearly $1B in net income and raised its funds from operations guidance after a robust first half. Mall occupancy stood at 96% as of June 30, and average base rent approached $59 PSF.

Expanding The Portfolio

In addition to its debt offering, Simon has made strategic moves to grow its portfolio. In Q2, the REIT acquired a majority stake in Miami’s Brickell City Centre Mall for $512M and hinted at additional acquisitions before year-end.

Leadership succession is also underway. David Simon’s son, Eli Simon, was recently named COO and is expected to take on greater leadership responsibilities in the future.

Why It Matters

The offering highlights how major retail landlords are adapting to a higher interest rate environment. At the same time, they are leveraging strong operational performance to maintain stability and growth. With retail bouncing back, Simon’s refinancing plan shows confidence in the sector’s long-term stability and its own balance sheet.

What’s Next

Expect Simon to remain active in capital markets and acquisitions as it balances growth with a cautious investment strategy. As David Simon said, “We’ll keep finding opportunities… but we’re going to be picky on what we buy.”