Simon Property Group raised its guidance for the rest of the year as concerns about tariffs begin to wane, with the biggest U.S. mall landlord seeing a solid performance from its portfolio.
The Indianapolis-based company reported second-quarter financial results Monday, saying it was increasing the midpoint of its 2025 Funds From Operations, or FFO, per share guidance. FFO is the figure used by real estate investment trusts such as Simon to represent cash flow generated by its main real estate operations.
"We delivered another successful quarter, driven by the quality of our portfolio and disciplined execution," David Simon, chairman and CEO of the REIT, said in a statement. "Our strategic investments and A-rated balance sheet position us for sustained long-term cash flow growth."
Retail REITS have been reporting their second-quarter results, and so far none of them have cited tariffs holding back retailers in terms of leasing.
Slight rises in occupancy, rents
Occupancy at Simon's U.S. malls and premium outlets was 96% as of June 30, a 0.4% increase compared to 95.6% in the prior-year period. Base minimum rent per square foot was $58 compared to $57.94 a year ago, an increase of 1.3%.
The REIT signed roughly 1,000 leases for more than 3.6 million square feet in the quarter, with about 30% of its leasing activity on new deals, according to Simon Chief Financial Officer Brian McDade. Occupancy remained strong across the portfolio, "overcoming retailer bankruptcies of approximately 1.8 million square feet this quarter," he said.
"Retail demand is really unabated," CEO Simon said on the earnings call. "And the physical shopping environment continues to be the place to be. So we’re quite bullish about what we’ve done, what we are doing, where we are going, despite all of the headlines that are out there."
Simon is "outperforming our year-to-date even with the volatility of the tariffs that were announced in April" according to the retail landlord's CEO.
Major Miami acquisition
In a note, Sandler Piper said the REIT "is benefiting as retailers move beyond tariffs, putting in normal holiday orders as the prominence of malls returns to common acceptance, seen by the increase in transactions."
Piper Sandler agreed with Simon's chief about tariffs.
"Similar to other sectors, the tariffs are becoming old news, the cost of doing business, with the view 2026 will see improvement as this year's global trade uncertainty settles down," it said.
The REIT also discussed its previously announced acquisition during the quarter. It bought out its partner Swire Properties USA's interest in the retail and parking facilities at Brickell City Centre at 701 S. Miami Ave. in Miami for $512 million. Simon now wholly owns and manages the mall.
In another note, BMO Capital Markets said that "leasing remains solid "at Simon's fortress balance sheet, which it called "a strategic weapon where management is more bullish on external growth" and redevelopment.