# Simon Property Group, Inc. (SPG) — Narrative, Q3 2026

Sources: annual report on Form 10-K for the fiscal year ended December 31, 2025 (accession 0001104659-26-019419); quarterly report on Form 10-Q for the quarter ended September 30, 2026 (accession 0001104659-26-123591); third-quarter 2026 earnings release furnished on Form 8-K (accession 0001104659-26-123325); and the current reports cited in each section.

## Business

*From the FY2025 10-K, accession 0001104659-26-019419, updated to September 30, 2026 from the Q3 2026 10-Q, accession 0001104659-26-123591.*

Simon Property Group owns, develops and manages shopping, dining, entertainment and mixed-use destinations, mainly enclosed malls, Simon Premium Outlets and The Mills. It is organized as a self-administered real estate investment trust (REIT). Almost all of its revenue is rent. Retail, dining, entertainment and other tenants pay fixed minimum rent and fixed common-area maintenance charges. They also pay variable rent, mostly overage rent tied to the sales they report, plus reimbursements for real estate taxes, utilities and marketing. Smaller revenue lines are property-management fees, sponsorship and media income (Simon Media and Experiences), land sales next to its centers, and interest income. Property is held through Simon Property Group, L.P., the operating partnership. Simon is its general partner and majority owner.

At September 30, 2026, Simon owned or held an interest in 212 income-producing U.S. properties in 38 states and Puerto Rico: 107 malls, 67 Premium Outlets, 16 Mills, six lifestyle centers and 16 other retail properties. It also had interests in 42 properties outside the U.S., mainly in Asia, Europe and Canada. The 10-K gave the U.S. mix at December 31, 2025 as 108 malls, 70 Premium Outlets, 16 Mills, six lifestyle centers and 12 other retail properties. Consolidated real estate is reported as **one segment**, and management judges it on net operating income (NOI). No single tenant makes up 5% or more of consolidated revenue. Anchors bring in shoppers but add little to results directly, because many anchors own their own buildings.

Beyond its directly owned centers, the company has three other kinds of holdings:

- **Klépierre.** A 20.7% stake in this Paris-listed shopping-center owner, which operates in 13 European countries. The stake was 22.2% at year-end 2025 and fell after Klépierre shares were delivered to settle conversions of the exchangeable bonds.
- **The Taubman Realty Group (TRG).** Simon held 88% of TRG until it bought the remaining 12% on October 31, 2025 for about 5.06 million operating-partnership units. TRG has interests in 22 regional, super-regional and outlet malls in the U.S. and Asia. Simon now consolidates 11 of them and accounts for the other 11 under the equity method.
- **"Other platform investments".** These are non-property businesses: a 31.3% stake in the retailer Catalyst Brands (J.C. Penney combined with the former SPARC Group brands); 33.3% of SPARC Holdings, which mainly holds another 25% of Catalyst; 45% of the e-commerce business Rue Gilt Groupe, which runs shop.simon.com; 50% of the real estate investor Jamestown; and 39.4% of Phoenix Retail, which owns and operates Express. Their results are volatile and are left out of the company's preferred measure, Real Estate FFO.

The company's growth plan has four parts: lease and re-tenant productive space at higher rents, redevelop and add mixed-use space at existing centers, buy out joint-venture partners in high-quality assets, and earn extra income from media, sponsorships, services and outparcels. It targets a stabilized return of 8–10% on development and redevelopment capital. Funding comes mostly from long-term fixed-rate unsecured debt issued by the operating partnership. Liquidity is backed by a $5.0 billion revolving credit facility, a $3.5 billion supplemental facility and a $2.0 billion commercial paper program, and management aims to keep investment-grade ratings. At year-end 2025 the company and its affiliates had about 3,600 employees (about 500 part-time), roughly 1,000 of them at the Indianapolis headquarters.

**Leadership.** Chairman, CEO and President David Simon died on March 22, 2026, aged 64. On March 23, 2026 the board appointed his son Eli Simon, then 38, as Chief Executive Officer and President. Eli Simon had been Chief Operating Officer since 2025 and kept that role and his board seat. Larry Glasscock, previously lead independent director, became Non-Executive Chairman (8-K, accession 0001104659-26-033931). The Simon family's influence is built into the governance structure. The charter caps ownership by other holders at 8% of capital stock but lets the Simon family and related persons own up to 18%. A voting trust that holds all 8,000 Class B shares elects up to four directors. At the May 13, 2026 annual meeting, which elected Eli Simon and Richard S. Sokolov as the Class B directors, the advisory vote on executive pay passed with about 191.5 million votes for and 83.6 million against (8-K, accession 0001104659-26-062012).

## Risk factors

*From the FY2025 10-K, Item 1A, accession 0001104659-26-019419. The Q3 2026 10-Q reports no material changes to these risk factors.*

The main risks fall into five groups: tenant health, debt, ownership structure, REIT tax status, and the business's dependence on a few people and outside partners.

- **Retail environment and tenant health.** Revenue comes from retail tenants, so it depends on consumer spending, tariffs and trade disputes, inflation, interest rates and travel and tourism. Part of lease income is overage rent tied to tenants' reported sales, so weaker sales cut income directly. Weaker sales also make it harder to sign new leases and renewals at the desired rents.
- **Anchors, bankruptcies and vacancy.** Centers are typically anchored by department stores and large national chains, and some of these have closed stores or downsized. When an anchor closes, certain other tenants may be entitled to change the terms of their leases or end them. It also lowers traffic and requires expensive re-tenanting. In a bankruptcy, tenants can reject leases, and Simon's unsecured claims usually recover much less than full value. Stronger tenants' bargaining power can push down rents and push up tenant-improvement spending.
- **E-commerce and changing shopping habits.** The business still relies mostly on demand for shopping in physical stores. Online sales can lead retailers to close stores, and returns of online orders processed in stores can make reported store sales look lower, which reduces overage rent.
- **Leverage and access to capital.** Consolidated mortgages and unsecured debt totaled $28.6 billion at December 31, 2025. Debt covenants limit leverage, secured debt and mergers. Growth and refinancing depend on credit markets and on the company keeping its credit ratings; a downgrade, or even a ratings review, would raise borrowing costs. Variable-rate debt was about $311.0 million at year-end 2025. The 10-K estimates that a 50-basis-point rise in rates would lower annual earnings and cash flow by about $0.2 million but cut the fair value of debt by about $754.7 million.
- **Joint ventures and guarantees.** At year-end 2025 Simon held 110 income-producing properties with partners, of which it consolidated 22 and accounted for 88 under the equity method. Major decisions on most of these need partner consent. Partners can go bankrupt or disagree with Simon, and the operating partnership had guaranteed $118.8 million of joint-venture mortgage debt. That guarantee was $128.4 million at September 30, 2026.
- **Key people.** The 10-K names dependence on executive management, including the CEO, who works without an employment agreement. Losing key leaders could disrupt operations and relationships with lenders, partners and tenants. The CEO's death in March 2026 tested this risk directly.
- **REIT and partnership tax status.** Simon must pay out at least 90% of its REIT taxable income and pass asset and income tests every quarter. Failing them would mean corporate income tax and loss of REIT status for four years. If the operating partnership were treated as a corporation, Simon would also lose REIT status. Holdings in taxable REIT subsidiaries, such as the retail investments, are capped at 20% of asset value.
- **Change-of-control barriers.** The 8%/18% ownership limits, the Class B director rights, and the partnership rule that a merger needs consent from a majority of units could all deter a takeover.
- **Physical, climate and security risks.** A material share of NOI comes from Florida, California, Texas and New York, where storms and climate-related losses are more likely. Some losses are uninsured or subject to large deductibles, and terrorism cover on U.S. properties is capped at $1 billion. Violence, organized retail crime, cyber-attacks and the risks of generative AI could hurt traffic, operations and reputation.
- **International exposure.** Simon has property interests in 15 countries outside the U.S., plus Klépierre. In 2025 these produced about 2.3% of consolidated net income and 9.7% of NOI, and they bring currency, political, legal and trade-policy risks.

## Management's discussion — fiscal 2025

*From the FY2025 10-K, Item 7, accession 0001104659-26-019419.*

In 2025, diluted earnings per share rose to **$14.17 from $7.26**. Most of the increase came from a one-time non-cash gain of $2.9 billion ($7.56 per share) from remeasuring Simon's existing 88% stake in TRG to fair value when it took control on October 31, 2025. Operating drivers:

- **Lease income rose $449.4 million** on higher fixed minimum rent, higher occupancy and newly consolidated properties.
- **Income from unconsolidated entities rose $296.8 million**, mostly from better results at the other platform investments and the joint-venture properties.
- **Partly offsetting items:**
  - depreciation and amortization rose $161.1 million, mostly because of TRG;
  - interest expense rose $69.0 million on new U.S. dollar and euro bonds and TRG's secured debt;
  - other income fell $59.9 million, including $56.6 million less interest income;
  - the company booked a net pre-tax loss of $86.1 million on equity interests, tied mainly to restructuring at Catalyst;
  - unrealized fair-value losses were $106.1 million, which the company ties mainly to the exchange option in the Klépierre exchangeable bonds;
  - 2024 had included a $414.8 million gain on the sale of the remaining stake in Authentic Brands Group, which did not recur.

**Operating metrics.** Portfolio NOI rose 4.7% in 2025. For U.S. Malls and Premium Outlets, average base minimum rent rose 4.7% to $60.97 per square foot, and ending occupancy was 96.4%, against 96.5% a year earlier. The company signed 1,112 new leases and 2,035 renewals covering about 11.4 million square feet. The average starting rent on new leases was $65.09 per square foot.

**Acquisitions in 2025.** The year's deals were:

- the remaining 12% of TRG (October 31), which added $3.1 billion of consolidated mortgage debt;
- Phillips Place, a 132,805 sq ft center in Charlotte, for $143.8 million in cash (November 17);
- the remaining 75% of the retail component and 100% of the parking at Brickell City Centre in Miami, for $497.7 million in cash (June 27);
- the remaining interest in Briarwood Mall, for $9.2 million in cash, with the property carrying a $165 million mortgage (April 1);
- two luxury outlet centers in Italy, The Mall Luxury Outlets Firenze and Sanremo, for a price of €350 million. Cash consideration including working capital and transaction costs was $392.4 million (January 30).

Simon also gave up one unconsolidated property in settlement of its $84.3 million mortgage, booking a $21.6 million gain.

**Liquidity and capital.** Operating cash flow plus capital distributions from unconsolidated entities totaled $4.5 billion in 2025. Against that, the company:

- paid about $3.2 billion in dividends and distributions;
- spent $934.3 million on consolidated capital projects;
- paid $1.1 billion in cash for acquisitions;
- repurchased $226.8 million of stock.

Common dividends were $8.55 per share for the year. The effective borrowing rate rose 25 basis points to 3.87%, and weighted average debt maturity shortened to 7.0 years from 8.1. Year-end cash was $823.1 million, with about $7.7 billion available under the credit facilities. Floating-rate debt was 1.1% of total consolidated debt.

## Current quarter — Q3 2026

*From the Q3 2026 10-Q, accession 0001104659-26-123591, and the Q3 2026 earnings release, accession 0001104659-26-123325. Second-quarter comparisons are from the Q2 2026 earnings release, accession 0001104659-26-093361. First-quarter secured loans are from the Q1 2026 earnings release, accession 0001104659-26-058646.*

**Earnings fell while property cash flow kept growing.** Third-quarter net income attributable to common stockholders was $499.0 million, or $1.54 per diluted share, compared with $606.2 million, or $1.86, a year earlier. The quarter included $99.6 million ($0.27 per share) of non-cash after-tax mark-to-market losses on the Klépierre exchangeable bonds and on an equity security held by one of the unconsolidated other platform investments. That security became publicly traded during the quarter, and the related pre-tax loss was $120.0 million. Real Estate FFO, which excludes these items and the other platform investments, was $1.277 billion against $1.215 billion; per share it rose 4.7% to $3.37 from $3.22. FFO was $1.172 billion, or $3.09 per share, against $3.25. Domestic property NOI rose 6.6% and portfolio NOI 6.7%.

For the nine months, diluted EPS was $4.51, against $4.83. Real Estate FFO was $9.82 per share, against $9.24 (+6.3%), and portfolio NOI rose 7.2%.

**TRG explains much of the change in both directions.** Third-quarter lease income rose $228.5 million. The company says this was driven by an increase of $181.2 million due to acquisition activity, development activity and increases in fixed and variable lease consideration. The same acquisitions raised costs:

- Depreciation and amortization rose $172.1 million, including a $49.8 million catch-up charge when the TRG valuation was finalized in the quarter. Separately, the same finalization cut Simon's share of amortization of excess investment in unconsolidated entities by $25.2 million, so the net purchase-accounting charge in the quarter was $24.6 million ($0.06 per share).
- Interest expense rose $44.8 million, of which $38.2 million related to acquisitions.

The consolidated TRG properties contributed $189.2 million of revenue and a $47.4 million net loss in the quarter. Other income fell $24.7 million, as 2025 had included land-sale gains and interest income was lower. Tax expense improved by $37.7 million, including a $30.0 million non-cash benefit tied to the mark-to-market loss. Over nine months, general and administrative costs included $40.0 million of accelerated stock compensation recognized in the first quarter. The nine-month results also include $26.6 million of transition and restructuring costs related to Catalyst and the TRG Acquisition.

**Operating statistics improved.**

- *Occupancy and rent:* U.S. Malls and Premium Outlets occupancy was 96.5% at September 30, 2026, against 96.4% a year earlier and 96.0% at June 30, 2026. Base minimum rent rose 6.1% to $62.75 per square foot.
- *Tenant sales:* reported retailer sales were $852 per square foot for the trailing twelve months, up 14.8%. Management said shopper traffic growth accelerated for the third quarter in a row.
- *Leasing:* in the first nine months the company signed 853 new leases and 1,419 renewals covering about 8.6 million square feet. The average starting rent on new leases was $76.03 per square foot, against $65.09 a year earlier, while tenant allowances fell to $54.12 per square foot from $60.13.

**Guidance and dividend.** On November 5, 2026, the company raised its full-year 2026 Real Estate FFO guidance to **$13.30–$13.40 per share**, from $13.20–$13.30. In August it had raised the range from a lower level. In the same update it cut estimated net income attributable to common stockholders to $6.32–$6.42 per diluted share, from $6.47–$6.57. The third-quarter dividend paid was $2.25 per share, and $6.70 has been paid for the nine months, against $6.35 a year earlier.

**Balance sheet and financing in 2026.** After the March 2026 amendment, the $5.0 billion credit facility matures on June 30, 2030 (initial maturity), and at September 30, 2026 it carried an interest rate of SOFR plus 65 basis points. The year's debt activity:

- **Bonds:**
  - $800 million of 4.30% notes due 2031, issued in January to repay maturing 3.30% notes;
  - €500 million of 3.65% notes due 2031, issued in June;
  - two $400 million tranches in September, at 5.25% due February 2032 and 5.65% due October 2036. Their proceeds are earmarked for the $750 million of 3.25% notes maturing November 30, 2026.
- **Term loan:** a $460 million five-year loan in June, swapped to a fixed 4.02%, which repaid the revolver balance.
- **Secured debt:**
  - 10 secured loan transactions in the first quarter totaling approximately $2.3 billion (U.S. dollar equivalent) at a weighted average 5.25%;
  - roughly $1.4 billion of secured loans in the second quarter at a weighted average 5.36%;
  - about $970 million in the third quarter at 6.33%;
  - two properties made unencumbered in the third quarter, cutting mortgage debt by $540.0 million. Mortgage debt totaled $7.4 billion at September 30, 2026, against $8.2 billion at year-end.
- **Exchangeable bonds:** conversions of €706.4 million ($824.3 million) were settled in 2026, leaving €28.2 million ($32.0 million). The company delivered 4,074,711 Klépierre shares for €110.3 million of the bonds, booking a $64.3 million gain. The remaining conversions were settled in cash for €770.2 million ($898.7 million).
- **Commercial paper:** $755.0 million outstanding at a 3.97% average rate.

The effective borrowing rate rose 33 basis points year on year to 4.07%, and floating-rate debt rose to 4.5% of the total. Liquidity was about $9.0 billion: $1.3 billion of cash including Simon's share of joint-venture cash, plus $7.7 billion of available revolver capacity. Management says it has enough to cover debt maturities and capital needs through 2026 and 2027.

**Capital returns and development.** Stock repurchases totaled $572.5 million in the first nine months, including 1,137,182 shares in the third quarter at an average of $207.98 ($236.5 million). Simon's share of projects under construction is about $1.2 billion, with about $342.0 million still to fund in 2026–2027. These include Phase 1 of the Yeoju Premium Outlets expansion near Seoul, which is scheduled to open in December 2026.

## Subsequent events

*From the Q3 2026 10-Q, accession 0001104659-26-123591 (Notes 7 and 8), and the Q3 2026 earnings release, accession 0001104659-26-123325.*

- **Dividend increase.** On November 5, 2026 the board declared a fourth-quarter common dividend of **$2.30 per share**, up $0.10 (4.5%) from a year earlier. It is payable December 31, 2026 to holders of record on December 10, 2026. The board also declared the regular $1.046875 dividend on the 8 3/8% Series J preferred stock, payable December 31, 2026.
- **Guidance raised.** The full-year 2026 Real Estate FFO estimate was raised to $13.30–$13.40 per diluted share on the same date.
- **Upcoming maturity.** $750.0 million of 3.25% senior notes mature on November 30, 2026. The company expects to repay all or part of them with proceeds from the $800 million of notes issued in September.

Beyond the dividend declaration, the quarterly report discloses no acquisitions, dispositions, financings or litigation outcomes after September 30, 2026.