- Simon reaffirmed its full-year FFO forecast of $12.40 to $12.65 per share.
- Q1 net income fell to $413.7M from $667.2M in Q4, despite a small rise in revenue.
- Executives flagged rising tariffs on Chinese goods as a risk to retailer sales.
- The company plans to invest $500M in mixed-use and redevelopment projects this year.
Income Drops, But Outlook Holds
According to Bisnow, Simon Property Group, the world’s largest mall operator, is holding firm to its full-year forecast. Q1 net income dropped to $413.7M, down from $667.2M in the previous quarter. Total revenue rose slightly to $1.47B.
Retail Metrics Improve
Simon Property’s occupancy reached 95.9%, a 0.4% increase quarter-over-quarter. Base rents rose 2.4% year-over-year to $58.92PSF. Funds from operations dipped to around $1.1B, down from nearly $1.3B last quarter.
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Tariffs Pose a Growing Threat
Tariffs on Chinese goods—some as high as 145%—were a major topic on the earnings call. Even with a temporary 90-day pause, Simon Property CEO David Simon warned that a 30% tariff could strain retailers. He noted that retailers may pass some costs to consumers or manufacturers.
Forever 21 Fallout Shows Progress
Simon Property addressed the recent bankruptcy of Forever 21, a brand it co-owned. Over half of the vacated spaces are now leased. Simon expects to more than double the rent once re-leasing is complete.
Trade Policy Offers a Boost
Simon praised the removal of the de minimis exemption, which allowed duty-free imports under $800. He said the move helps US retailers compete with Chinese e-commerce companies.
What’s Next
Despite near-term uncertainty, Simon Property is pushing forward. The company plans to spend $500M on mixed-use and redevelopment projects in 2025. It’s a clear signal that Simon sees a long-term future for physical retail.
