Eli Simon Touts $2B Development Pipeline In First Earnings Call As Simon Property CEO
The world’s largest mall operator, with a new leader at the helm following the death of its longtime CEO and chairman, is preparing a slew of new projects as retail construction hits all-time lows.
Simon Property Group has more than $1B worth of construction projects underway and another $1B worth of projects that could begin construction this year, new CEO, President and Chief Operating Officer Eli Simon said on a call with analysts Monday.
“Beyond that, we have approximately $3B of projects in our pipeline that could start over the next several years — investments that will make our great centers even better,” Simon said.
Simon was named the REIT’s chief executive after the March death of his father, David Simon, at the age of 64, following treatment for cancer.
The company is operating “business as usual” following the leadership change and continuing to execute its business plan, Eli Simon said on his first earnings call as CEO. He was previously promoted to chief operating officer in August.
“Everyone's excited for the future and excited to keep doing what we're doing,” Eli Simon said.
The REIT's development pipeline — which Simon said isn't scratching the surface of its potential because it doesn't control all of the real estate needed to redevelop or expand — will be funded by the piles of cash being thrown off by its existing portfolio, he said.
But even though just 4.7M SF of retail space delivered nationwide in the first quarter and the availability rate is below 5%, Simon's projects are redevelopments of vacated anchors into retail and restaurants or adding hotel rooms and apartments to existing centers.
The Indianapolis-based REIT raised its full-year guidance for funds generated from its operations and increased its quarterly dividend to $2.25 for the second quarter, a jump of more than 7% year-over-year.
Simon Property Group also spent $175M during the quarter to repurchase around 965,000 shares of common stock at an average purchase price of $181.59.
“We're off to a very good start for 2026, with first-quarter results that exceeded our plan,” Simon said.
Rents across the portfolio rose more than 5% year-over-year from less than $59 per SF at the end of March 2025 to nearly $62 in 2026.
Along with that increase in rents, occupancy at Simon Property Group malls and premium outlets ticked up slightly year-over-year to 96%.
Retailer sales increased nearly 12% to $819 per SF for the 12 months that ended March 31. Simon attributed that growth to increases in spending from luxury shoppers as well as Generation Z customers.
The REIT's junior brands have seen the same kind of sales rebounds as its luxury tenants, Simon said. Gen Z shoppers — those born between 1997 and 2010 — have long shown a fondness for physical retail. Mall industry group ICSC found that they visit stores in person at around the same frequency as baby boomers, more than millennials and Gen X consumers.
The mall giant identified Gen Z shoppers as a growing cohort and has been actively marketing to them for more than two years, Simon Executive Vice President and Chief Financial Officer Brian McDade said during the call.
During the first quarter, the REIT signed more than 1,100 leases totaling more than 4.7M SF. Approximately 25% of the quarter’s leasing volume was new deals, the company reported.
Simon said the REIT could lease its portfolio up to 97%-97.5% if it wanted to, but the company can be choosy about who takes its remaining space.
“Sometimes that might be holding space for another retailer that's coming [or] it might be taking a little bit of downtime, which we don't like to do,” Simon said. “We have an incredible short-term leasing program that keeps the occupancy at a good number.”
