Simon is focused on getting all its properties reopened and operating at full capacity before pursuing new investments, deals and redevelopments, David Simon, chairman, president and CEO, said on an earnings call.
In accordance with the lifting of local government restrictions, Simon has opened 77 properties and is planning to have half its 204 U.S. properties open by the 22nd.
The company — whose 106 malls, 69 outlet centers, 14 Mills shopping centers, four lifestyle centers and 11 other retail properties span 37 states — closed all its properties in mid-March. “We are now leading the effort for these local economies to get back to business while delivering a new, elevated standard of safety for all,” said David Simon. “Shopper response to our reopenings has been positive, and sales of many tenants have been better than their initial expectations.”
He said the company’s reopened open-air properties are benefiting most from pent up consumer demand. “Outdoor centers feel a little bit more comfortable,” he said. “Generally, the suburban outside of major, dense areas seems to be doing better. The consumer is probably a little more moderate as opposed to high-end.” Conversely, luxury brands are drawing the most customers at the company’s outlet centers.
Tenant sales at Simon properties in the U.S. have outperformed the company’s reopened properties in Europe, he said. “We’ve been pleasantly surprised. For the retailers that are opening, they’re gaining market share. They’re taking advantage of pent-up demand, and I think others that aren’t ready are missing that opportunity. But that’s up to them. We’re not forcing the issue at all.”
Simon has given rent deferrals to some tenants and is working on a case-by-case basis to help independent tenants remain viable. “Our tenants are eager to reopen their stores, and we are working with them to do so,” he said. “We are also very focused on helping local entrepreneurs reopen and are also supporting our restaurant operators both nationally and locally.”
David Simon said reopening has been easier thanks to the preparedness of department-store tenants like Belk, Dillard’s, Kohl’s, Macy’s and Nordstrom. “Even Neiman Marcus is opening,” he said.
To conserve cash, Simon has suspended or eliminated more than $1 billion of capital for redevelopment and new development worldwide. “Our current investment focus is on projects nearing completion,” he said. “We will reevaluate all suspended projects over time.”
By Brannon Boswell
Executive Editor, Commerce + Communities Today