Simon Property Group, the nation’s largest mall operator, has a somewhat better-than-expected earnings report this week. Funds from operations rose to $2.63 per share from $2.28 per share a year ago, a sign that occupancy rates and per-foot rates are on the incline.
Simon Property Group Chairman and CEO David Simon also took his quarterly call with investors as an opportunity to call out the doom-and-gloom attitude that has infected the mall business of late.
“Our business is as solid as it’s ever been. … Our earnings grew 15.4 percent per year.”
Still it is hard to know how that strength can and will carry on, especially with the waves of recent store closures and deluge of reports that department stores (the anchor chains that hold malls together) will likely have to close hundreds and even thousands of locations.
David Simon, on the other hand, remains unconvinced.
“If it were up to the media, malls would have already been extinct,” he said. “Demand is fine. Properties are getting better. We’ve got supply and demand in our favor.”
“The Internet is not the panacea.”
Simon did note that the strong dollar and the largely flat U.S. economy had not been a big help, but Simon’s numbers are heading in the right direction.
Simon is the largest real estate investment trust in the U.S. The company owns or controls an interest in more than 325 properties at home and abroad.