Q2 2026 Simon Property Group Inc Earnings Call

August 10, 2026

Speaker #1: Greetings. Welcome to the Simon Property Group second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Operator 2: Greetings. Welcome to Simon Property Group second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Thomas Ward, Senior Vice President, Investor Relations. Thank you. You may begin.

Operator: Greetings. Welcome to Simon Property Group Q2 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Tom Ward, Senior Vice President, Investor Relations. Thank you. You may begin.

Speaker #1: Please note, this conference is being recorded. I will now turn the conference over to Tom Ward, Senior Vice President, Investigations. Thank you. You may begin.

Speaker #2: Thank you, Sherry. And thank you for joining us this evening. Presenting on today's call are Eli Simon, Chief Executive Officer, President and Chief Operating Officer; and Brian McDade, Chief Financial Officer.

Thomas Ward: Thank you, Sherry, and thank you for joining us this evening. Presenting on today's call are Eli Simon, Chief Executive Officer, President, and Chief Operating Officer, and Brian McDade, Chief Financial Officer. A quick reminder that statements made during this call may be deemed forward-looking statements within the meaning of the Safe Harbor of the Private Securities Litigation Reform Act of 1995, and actual results may differ materially due to a variety of risks, uncertainties, and other factors. We refer you to today's press release and our SEC filings for a detailed discussion of the risk factors relating to those forward-looking statements. Please note that this call includes information that may be accurate only as of today's date. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included within the press release and the supplemental information in today's Form 8-K filing.

Tom Ward: Thank you, Sherry, and thank you for joining us this evening. Presenting on today's call are Eli Simon, Chief Executive Officer, President, and Chief Operating Officer, and Brian McDade, Chief Financial Officer. A quick reminder that statements made during this call may be deemed forward-looking statements within the meaning of the Safe Harbor of the Private Securities Litigation Reform Act of 1995, and actual results may differ materially due to a variety of risks, uncertainties, and other factors. We refer you to today's press release and our SEC filings for a detailed discussion of the risk factors relating to those forward-looking statements. Please note that this call includes information that may be accurate only as of today's date.

Speaker #2: A quick reminder that statements made during this call may be deemed forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Speaker #2: An actual result may differ materially due to a variety of risks, uncertainties, and other factors. We refer you to today's press release and our SEC filings for a detailed discussion of the risk factors relating to those forward-looking statements.

Speaker #2: Please note that this call includes information that may be accurate only as of today's date. Reconciliations of non-GAAP financial measures for the most directly comparable GAAP measures are included within the press release and the supplemental information in today's Form 8K filing.

Tom Ward: Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included within the press release and the supplemental information in today's Form 8-K filing. Both the press release and the supplemental information are available on our IR website at investors.simon.com. Our conference call this evening will be limited to one hour. For those who would like to participate in the question and answer session, we ask that you please respect the request to limit yourself to one question. May I please introduce Eli Simon.

Speaker #2: Both the press release and the supplemental information are available on our IR website at investors.simon.com. Our conference call this evening will be limited to one hour.

Thomas Ward: Both the press release and the supplemental information are available on our IR website at investors.simon.com. Our conference call this evening will be limited to one hour. For those who would like to participate in the question and answer session, we ask that you please respect the request to limit yourself to one question. May I please introduce Eli Simon.

Speaker #2: For those who would like to participate in the question-and-answer session, we ask that you please respect the request to limit yourself to one question.

Speaker #2: And please introduce Eli Simon.

Speaker #3: Good evening. We delivered excellent financial and operational results in the second quarter. Domestic property NOI and real estate FFO per share growth accelerated in the quarter to 8.5% and 7.9%, respectively.

Eli Simon: Good evening. We delivered excellent financial and operational results in the second quarter. Domestic property NOI and real estate FFO per share growth accelerated in the quarter to 8.5% and 7.9% respectively. This was driven by continued leasing demand, disciplined execution across all platforms, and contributions from recent acquisitions. Shopper traffic accelerated in the quarter, and retailer sales volume again grew solidly year over year. Further evidence that our portfolio is well-positioned, and our properties are the places where shoppers and tenants want to be. With our recently declared dividend, we will have paid out over $50 billion to shareholders since becoming a public company. Tenant demand continues to be widespread with no slowdown, drawing from a broad mix of established and emerging retailers across categories, platforms, and geographies.

Eli Simon: Good evening. We delivered excellent financial and operational results in the Q2. Domestic property NOI and real estate FFO per share growth accelerated in the quarter to 8.5% and 7.9% respectively. This was driven by continued leasing demand, disciplined execution across all platforms, and contributions from recent acquisitions. Shopper traffic accelerated in the quarter, and retailer sales volume again grew solidly year over year. Further evidence that our portfolio is well-positioned, and our properties are the places where shoppers and tenants want to be. With our recently declared dividend, we will have paid out over $50 billion to shareholders since becoming a public company. Tenant demand continues to be widespread with no slowdown, drawing from a broad mix of established and emerging retailers across categories, platforms, and geographies.

Speaker #3: This was driven by continued leasing demand, disciplined execution across all platforms, and contributions from recent acquisitions. Shopper traffic accelerated in the quarter, and retailer sales volume again grew solidly year over year.

Speaker #3: Further evidence that our portfolio is well-positioned, and our properties are the places where shoppers and tenants want to be. And with our recently declared dividend, we will have paid out over $50 billion to shareholders since becoming a public company.

Speaker #3: Tenant demand continues to be widespread with no slowdown, drawing from a broad mix of established and emerging retailers across categories, platforms, and geographies. During the second quarter, we signed more than 1,200 leases totaling over 4.8 million square feet.

Eli Simon: During the Q2, we signed more than 1,200 leases totaling over 4.8 million square feet. The number of new deals signed in the quarter increased more than 20% compared to last year, and new deals represented approximately 28% of total leased square feet. Year to date through the Q2, initial base minimum rent per square foot on new deals is up 17% year-over-year, while tenant allowance per square foot on new deals is down 12% year-over-year. We have completed more than 87% of our 2026 expirations and are ahead of where we were at this time last year, as we continue to negotiate 2027 and 2028 expirations with many tenants. The pipeline of prospective deals continues to build, remaining well ahead of last year's pace, reflecting continued broad-based tenant demand. Moving on to retailer sales.

Speaker #3: The number of new deals signed in the quarter increased more than 20% compared to last year, and new deals represented approximately 28% of total leased square feet.

Speaker #3: Year-to-date through the second quarter, initial base minimum rent per square foot on new deals is up 17% year over year, while tenant allowance per square foot on new deals is down 12% year over year.

Speaker #3: We have completed more than 87% of our 2026 expirations and are ahead of where we were at this time last year, as we continue to negotiate 2027 and 2028 expirations with many tenants.

Speaker #3: The pipeline of prospective deals continues to build, remaining well ahead of last year's pace, reflecting continued broad-based tenant demand. Moving on to retailer sales.

Speaker #3: Malls and premium outlets were $838 per square foot, up 13.9%. Importantly, total sales volume increased 6.6% over the trailing 12 months and 7.6% in the quarter, with comparable sales growth of 5.7% for the second quarter.

Eli Simon: Moving on to retailer sales. Malls and Premium Outlets were $838 per square foot, up 13.9%. Importantly, total sales volume increased 6.6% over the trailing 12 months and 7.6% in the quarter, with comparable sales growth of 5.7% for the Q2. We continue to host unique activations that highlight the incredible value our portfolio offers. Our fifth annual National Outlet Shopping Day produced another year of shopper traffic and retailer sales growth. A more than 25% increase in retailer participation compared to last year, with Simon+ members enjoying exclusive rewards tied to the event. We also built on the momentum around the World Cup, running a coordinated activation strategy across our portfolio that featured fan experiences, watch parties, retailer collaborations, and community programming.

Eli Simon: Malls and Premium Outlets were $838 per square foot, up 13.9%. Importantly, total sales volume increased 6.6% over the trailing 12 months and 7.6% in the quarter, with comparable sales growth of 5.7% for the Q2. We continue to host unique activations that highlight the incredible value our portfolio offers. Our fifth annual National Outlet Shopping Day produced another year of shopper traffic and retailer sales growth. A more than 25% increase in retailer participation compared to last year, with Simon+ members enjoying exclusive rewards tied to the event. We also built on the momentum around the World Cup, running a coordinated activation strategy across our portfolio that featured fan experiences, watch parties, retailer collaborations, and community programming.

Speaker #3: We continue to host unique activations that highlight the incredible value our portfolio offers. Our fifth annual national outlet shopping day produced another year of shopper traffic and retailer sales growth.

Speaker #3: More than 25% increase in retailer participation compared to last year, with Simon Plus members enjoying exclusive rewards tied to the event. We also built on the momentum around the World Cup, running a coordinated activation strategy across our portfolio that featured fan experiences, watch parties, retailer collaborations, and community programming.

Speaker #3: The shopper and retailer response to these types of events underscores Simon's offering: the ability to turn major cultural moments into large-scale real-world experiences that bring our consumers, brands, and communities together.

Eli Simon: The shopper and retailer response to these types of events underscores Simon's offering, the ability to turn major cultural moments into large-scale, real-world experiences that bring our consumers, brands, and communities together. Turning now to development and redevelopment activity. At the end of the quarter, we had development projects underway across all platforms, with our share of the net cost totaling $1.07 billion at a blended yield of 9%. Approximately 50% of the net cost is for mixed-use projects. Looking ahead, we expect projects representing more than $600 million of additional net cost to start construction the H2 of this year. Our development pipeline remains robust with over $4 billion of projects, which we believe will generate attractive returns, enhance our properties, and support long-term growth in cash flow, FFO, and dividends per share.

Speaker #3: Turning now to development and redevelopment activity. At the end of the quarter, we had development projects underway across all platforms, with our share of the net cost totaling $1.07 billion at a blended yield of 9%.

Speaker #3: Approximately 50% of the net cost is for mixed-use projects. Looking ahead, we expect projects representing more than 600 million dollars of additional net cost to start construction in the second half of this year.

Speaker #3: Our development pipeline remains robust, with over $4 billion of projects, which we will which we believe will generate attractive returns, enhance our properties, and support long-term growth and cash flow, FFO, and dividends per share.

Eli Simon: Our development pipeline remains robust with over $4 billion of projects, which we believe will generate attractive returns, enhance our properties, and support long-term growth in cash flow, FFO, and dividends per share. This is consistent with the results we have achieved on similar recently completed projects, such as Southdale Center in Edina, Minnesota, Brea Mall in Orange County, and Briarwood Mall in Ann Arbor, Michigan. Over the last four years, we have also committed more than $400 million to center enhancements that are either completed, underway, or recently approved, including common area upgrades, landscaping, lighting, and other amenities, creating a more elevated shopping experience.

Speaker #3: This is consistent with the results we have achieved on similar recently completed projects, such as Southdale Center and Edina, Minnesota, Brea Mall in Orange County, and Briarwood Mall in Ann Arbor, Michigan.

Eli Simon: This is consistent with the results we have achieved on similar recently completed projects, such as Southdale Center in Edina, Minnesota, Brea Mall in Orange County, and Briarwood Mall in Ann Arbor, Michigan. Over the last four years, we have also committed more than $400 million to center enhancements that are either completed, underway, or recently approved, including common area upgrades, landscaping, lighting, and other amenities, creating a more elevated shopping experience. These enhancements are noticed and appreciated by our customers, and particularly by our retailers, who value a landlord committed to the long-term success of their stores in the communities we serve. We remain focused on these enhancements alongside our broader development activity, and our balance sheet allows us to continue reinvesting in our portfolio for years to come.

Speaker #3: Over the last four years, we have also committed more than $400 million to center enhancements that are either completed, underway, or recently approved.

Speaker #3: Including common area upgrades, landscaping, lighting, and other amenities, we're creating a more elevated shopping experience. These enhancements are noticed and appreciated by our customers, and particularly by our retailers, who value their stores and the communities we serve.

Eli Simon: These enhancements are noticed and appreciated by our customers, and particularly by our retailers, who value a landlord committed to the long-term success of their stores in the communities we serve. We remain focused on these enhancements alongside our broader development activity, and our balance sheet allows us to continue reinvesting in our portfolio for years to come. With that, I will turn it over to Brian, who will review our financial results from the Q2 in more detail and provide an update on our outlook for the remainder of the year.

Speaker #3: We remain focused on these enhancements alongside our broader development activity, and our balance sheet allows us to continue reinvesting in our portfolio for years to come.

Speaker #3: With that, I'll turn it over to Brian, who will review our financial results from the second quarter in more detail, and provide an update on our outlook for the remainder of the year.

Eli Simon: With that, I will turn it over to Brian, who will review our financial results from the Q2 in more detail and provide an update on our outlook for the remainder of the year.

Speaker #4: Thank you, Eli. Real estate

Speaker #2: FFO was $1.25 billion, or $3.29 per share, in the second quarter compared to $1.15 billion or $3.05 per share in the prior year period, an increase of 7.9%.

Brian McDade: Thank you, Eli. Real estate FFO was $1.25 billion, or $3.29 per share in the Q2, compared to $1.15 billion, or $3.05 per share in the prior year period, an increase of 7.9%. Domestic and international operations both performed well and contributed to $0.29 of growth, driven by increased lease income, disciplined cost management, and contribution from acquisitions. As anticipated, higher interest expense and lower interest income combined were a $0.06 drag year over year. Reported FFO was $3.12 per share in the Q2, compared to $3.15 per share in the prior year period, which included a $0.21 per share non-cash after-tax gain, primarily due to Authentic Brands Group's deconsolidation of Forever 21. Domestic property NOI increased 8.5% year over year for the quarter and 7.6% for the H1 of the year.

Speaker #2: Domestic and international operations both performed well and contributed $0.29 of growth, driven by increased lease income, disciplined cost management, and contributions from acquisitions.

Speaker #2: As anticipated, higher interest expense and lower interest income combined were a $0.06 drag year over year. Reported FFO was $3.12 per share in the second quarter, compared to $3.15 per share in the prior year period, which included a $0.21 per share non-cash after-tax gain primarily due to Catalyst Brands' reconsolidation of Forever 21.

Speaker #2: Domestic property NOI increased 8.5% year over year for the quarter, and 7.6% for the first half of the year. Approximately 120 basis points of growth for both the second quarter and first half of the year were attributable to our acquisition of the remaining 12% interest in TRG.

Brian McDade: Approximately 120 basis points of growth for both the Q2 and H1 of the year were attributable to our acquisition of the remaining 12% interest in TRG. Portfolio NOI, which includes our international properties at constant currency, grew at 8.3% for the quarter and 7.5% for the H1 of the year. Malls and Premium Outlets occupancy at the end of the Q2 was 96%, flat compared to the Q1 and year over year, a result that reflects the depth of retail demand as we absorbed approximately 1 million square feet of retailer bankruptcy-related space returned during the quarter and successfully relet. The Mills occupancy was 98.8%. Average base minimum rent for the Malls and Premium Outlets increased 6.3% year over year, while ADR for The Mills increased 12.3%. Occupancy cost at the end of the quarter was 12.5%.

Speaker #2: Portfolio NOI, which includes our international properties at constant currency, grew by 8.3% for the quarter and 7.5% for the first half of the year.

Speaker #2: Malls and premium outlets occupancy at the end of the second quarter was 96%. Flat compared to the first quarter was year over year. A result that reflects the depth of retailer demand, as we absorbed approximately 1 million square feet of retailer bankruptcy-related space returned during the quarter, and successfully reled.

Speaker #2: The mills occupancy was 98.8%. Average base minimum rent for the malls and premium outlets increased 6.3% year over year, while ADR for the mills increased 12.3%.

Speaker #2: Occupancy cost at the end of the quarter was 12.5%. Shifting to return of capital, today we announced our dividend of $2.25 per share for the third quarter.

Brian McDade: Shifting to return of capital, today we announced our dividend of $2.25 per share for the Q3, an increase of $0.10 or 4.7% year over year. The dividend is payable on 30 September to shareholders as of the record date. During the Q2, we repurchased approximately 793,000 shares of common stock and approximately 238,000 limited partnership units for a $211 million investment at an average purchase price of $205.10 per share. On to the balance sheet. During the quarter, we completed eight secured loan transactions totaling $1.4 billion at a weighted average interest rate of 5.36%. We issued 500 million euros of senior notes at a 3.65% rate for five years, and we closed on a $460 million five-year term loan priced at SOFR plus 70 basis points. The proceeds of which were used to repay 460 million drawn under our revolving credit facility.

Speaker #2: An increase of $0.10, or 4.7% year over year. The dividend is payable on September 30th to shareholders of record as of the record date.

Speaker #2: During the second quarter, we repurchased approximately 793,000 shares of common stock and approximately 238,000 limited partnership units, for a $211 million investment at an average purchase price of $2.05 $205.10 per share.

Speaker #2: As to the balance sheet, during the quarter, we completed eight secured loan transactions totaling $1.4 billion, at a weighted average interest rate of 5.36%.

Speaker #2: We issued €500 million of senior notes at a 3.65% rate for five years, and we closed on a $460 million five-year term loan, priced at SOFR plus 70 basis points.

Speaker #2: The proceeds of which were used to repay $460 million drawn under our revolving credit facility. We ended the quarter with approximately $9.3 billion in liquidity, and our balance sheet remained incredibly robust, with net debt to EBITDA below 5.0 times and fixed charge coverage of 4.7 times.

Brian McDade: We ended the quarter with approximately $9.3 billion in liquidity, and our balance sheet remains incredibly robust, with net debt to EBITDA below 5.0 times and fixed charge coverage of 4.7 times. This supports our strategy and our continued execution. Finally, on to 2026 guidance. Given our results for the H1 of the year and our current view for the remainder of the year, we are increasing our full year 2026 real estate FFO guidance to a range of $13.20 to $13.30 per share. That compares to $12.73 last year and is an $0.08 increase at the midpoint compared to the range previously provided. Thank you, and we are now available for your questions.

Speaker #2: This supports our strategy and our continued execution. Finally, on to 2026 guidance. Given our results for the first half of the year and our current review for the remainder of the year, we are increasing our full year 2026 real estate FFO guidance to a range of $13.20 to $13.30 per share.

Speaker #2: That compares to $12.73 last year, and is an 8-cent increase at the midpoint compared to the range previously provided. Thank you. And we are now available for your questions.

Speaker #1: Thank you. If you would like to ask a question, please push star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Operator 2: Thank you. If you would like to ask a question, please push star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. As a reminder, we ask that you please limit to one question. Our first question is from Caitlin Burrows with Goldman Sachs. Please proceed.

Operator: Thank you. If you would like to ask a question, please push star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. As a reminder, we ask that you please limit to one question. Our first question is from Caitlin Burrows with Goldman Sachs. Please proceed.

Speaker #1: You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #1: As a reminder, we ask that you please limit to one question. Our first question is from Caitlin Burrows with Goldman Sachs. Please proceed.

Speaker #3: Hi, everyone. Good evening. I guess I'm wondering if you can talk about TIs and cash flow growth. You did reference some of the pieces in the prepared remarks, so if you look over a long time period, like the last 10 years, NOI and FFO growth have outpaced FAD growth.

Caitlin Burrows: Hi, everyone. Good evening. I guess I am wondering if you can talk about TIs and cash flow growth. You did reference some of the pieces in the prepared remarks. If you look over a long time period, like the last 10 years, NOI and FFO growth have outpaced FAD growth. Year to date, it looks like FAD growth has outpaced NOI and FFO growth. Maybe that is a change in the trend or maybe the numbers move around. But wondering, can you discuss the outlook for TIs and what they are a function of? If the demand and leasing environment is so strong, do you expect to pull back on TIs, and is reducing TIs a goal of yours? Thank you.

Speaker #3: Year to date, it looks like, actually, FAD growth has outpaced NOI and FFO growth, so maybe that is a change in the trend, or maybe the numbers move around.

Speaker #3: But wondering, can you discuss the outlook for TIs and what their function of, if the demand and leasing environment is so strong, do you expect to pull back on TIs?

Speaker #3: And is reducing TIs a goal of yours? Thank you.

Speaker #4: Sure. So thanks for the question, Caitlin. So I think what I think about the let's just talk about TIs first. That's a function of demand for the tenants and demand for the tenants and demand for the space and the supply of available space.

Brian McDade: Sure. Thanks for the question, Caitlin. When I think about the, let us just talk about TIs first. That is a function of demand from the tenants and demand for the space, and the supply of available space. The reality is we are having a ton of conversations with retailers. Our pipeline today is up 26%, I think it is, this time last year, which is over 100 more deals. When we have those conversations, rent is a component of it and TI is a component of it. There are certain times where might be a tenant that we want to start a new relationship with, but we are concerned potentially about their credit or about their long-term viability.

Speaker #4: The reality is, we're having a ton of conversations with retailers. Our pipeline today is about 26% above this time last year, which is over 100 more deals.

Speaker #4: And when we have those conversations, rent's a component of it, and TA is a component of it. And there are certain times where it might be a tenant that we want to start a new relationship with, but we're concerned potentially about the credit or about their long-term viability.

Speaker #4: And so maybe we'll say, "Yeah, maybe it doesn't make sense to pay as much of the TA as what we might pay for someone else.

Brian McDade: Maybe we'll say, "Yeah, maybe it doesn't make sense to pay as much of the TI as what we might pay for someone else we're more certain about what the performance could be." I think it's really a function of mix over the long run, but the reality is supply and demand shows itself in two ways. It shows itself in rent growth and it shows itself in TIs. Stepping back, as you look at funds available for distribution more broadly, I think for the year we're up 9% or over 9% year to date. It's a focus of ours, right? Our focus is to grow cash flow growth, and part of the cash flow growth is from the FFO and part of it is from the capital we spent.

Speaker #4: We're more certain about what the performance could be. So I think it's really a function of mix over the long run, but the reality is supply and demand shows itself in two ways.

Speaker #4: It shows itself in rent growth, and it shows itself in TAs. Stepping back, if you look at funds available for distribution more broadly, I think for the year we're up 9% or over 9% year to date.

Speaker #4: It's a focus of ours, right? Our focus is to grow cash flow growth and part of the cash flow growth is from the FFO, and part of it is from the capital.

Speaker #4: We spend, but what I do want to highlight or reiterate—which I said on the call or in the prepared remarks—is that we are reinvesting back into our centers in a big way, and that is noticeable from the consumers and really from the retailers.

Brian McDade: What I do want to highlight or reiterate, which I said in the prepared remarks, is we are reinvesting back into our centers in a big way, and that is noticeable from the consumers and really from the retailers. I've been to, I don't know, I think I've been to 12 states in the last three weeks and seen a bunch of our properties where we have done these transformations. What I've seen is new leases being signed there and new retailers coming to these centers because they see a landlord that has reinvested into that space. When you ask the general manager what the customer perception's been, they say, "Well, we've had people come up and say, 'I didn't realize this center was still here, or this center was still thriving.'" Our job is to continue

Speaker #4: And I've been to—I don't know—I think I've been to 12 states in the last three weeks and seen a bunch of our properties where we have done these transformations. And what I've seen is new leases being signed there and new retailers coming to these centers because they see a landlord that has reinvested into that space.

Speaker #4: And when you ask the general manager, "What's the customer perception been?" they say, "Well, we've had people come up and say, 'I didn't realize this center was still here or that this center was still thriving.'" So our job is to continue to reinvest back into our centers and to make them better from the customer's perspective and from our retailers' perspective.

Eli Simon: to reinvest back into our centers and to make them better from the customer's perspective and from our retailer's perspective. Our job overall is to grow cash flow growth, grow dividends per share, and make our centers better, and we throw it all into the calculus and I think the results have been obviously very impressive so far, and we're looking forward to the future.

Speaker #4: But our job overall is to grow cash flow growth, grow dividends per share, and make our centers better and sort of we throw it all into the calculus and I think the results have been obviously very impressive so far, and we're looking forward to the future.

Speaker #1: Thank you. Our next question is from Michael Griffin with Evercore ISI. Please proceed.

Operator 2: Thank you. Our next question is from Michael Griffin with Evercore ISI. Please proceed.

Operator: Thank you. Our next question is from Michael Griffin with Evercore ISI. Please proceed.

Speaker #5: Great, thanks. Eli, I appreciate your commentary around the leasing outlook. Just wondering, as you kind of look ahead to really 2027 and beyond—you've got rents on inline shops, they call it $60 to $65.

Michael Griffin: Great, thanks. Eli, I appreciate your commentary around the leasing outlook. Just wondering as you kind of look ahead to really 2027 and beyond, you have rents on inline shops, let's call it $60 to $65. I realize you do not quote mark-to-market on the portfolio, but can you give us a sense, as those leases are coming due, are you signing leases in the 70s, mid-70s? Just curious about the trajectory and opportunity there in rent growth, given all the demand that you have really highlighted. Thank you.

Speaker #5: I realize you don't quote a mark-to-market on the portfolio, but can you give us a sense as those leases are coming due, are you signing leases in the 70s, mid-70s?

Speaker #5: Just curious about the trajectory and opportunity there in rent growth, given all the demand that you’ve really highlighted. Thank you.

Speaker #4: Sure. So if you look at year to date, I think we've signed new leases at $78, more or less. But what you have to focus on is that those leases coming due—a large number of them will renew.

Eli Simon: Sure. If you look at year to date, I think we have signed new leases at $78, more or less. But what you have to focus on those leases coming due is a large number of them will renew. They are great tenants, we have great relations with them. They are important for the center. Our renewals, historically speaking, and that is holding true now, is sort of in the mid-single digits. We will renew some, and we will replace some if we think that there are better retailers that can perform better and add more to the center. So it is not as simple as saying, the 60, 65 goes to 78. But clearly, if you look at the trajectory of where new leases have been signed, obviously it is a positive story.

Speaker #4: They're great tenants. We have great relations with them. They're important for the center. And our renewals historically speaking, and that's holding true now, is sort of in the mid-single digits.

Speaker #4: And so we'll renew some, and we'll replace some if we think that there are better retailers that can perform better and add more to the center.

Speaker #4: So it's not as simple as saying the 60, 65 goes to 78, but clearly, if you look at the trajectory of where new leases have been signed, obviously it's a positive story.

Speaker #4: The supply and demand story is positive, but it's not as simple as just saying, "Take the 60, 65 to 78." But I think, really, the focus is: what's the right retailer for each space?

Eli Simon: The supply and demand story is positive, but it is not as simple as just saying, take the 60, 65 to 78. But I think really the focus is what is the right retailer for each space. There is no market rent really in our industry or how we think about it is, what is the market rent for that tenant based on how they are going to perform and what they are going to do with the rest of the center. So we think it is a positive story. I do not think it is quite the 65 to 78 in a year, but we look forward to continuing to upgrade the merchandise mix. In the pipeline, I think it is 483 deals, and a similar number of them are new deals or new tenants as we have done year to date, which is 28%.

Speaker #4: And there's no market rent really in our industry or how we think about it. It's what's the market rent for that tenant based on how they're going to perform and what they're going to do to the rest of the center.

Speaker #4: So, we think it's a positive story. I don't think it's quite the 65 to 78 in a year, but we look forward to continuing to upgrade the merchandise mix, and the pipeline. I think it's 483 deals and a similar number of them are new deals, or new tenants, as we've done year to date, which is 28%.

Speaker #4: So we feel very good about the pipeline, and it's our job to continue to execute and to continue to grow it over time.

Eli Simon: We feel very good about the pipeline, and it is our job to continue to execute and continue to grow it over time.

Speaker #1: Our next question is from Sameer Kanal with Bank of America. Please proceed.

Operator 2: Our next question is from Samir Khanal with Bank of America. Please proceed.

Operator: Our next question is from Samir Khanal with Bank of America. Please proceed.

Speaker #5: Thank you. Good afternoon, everybody. Eli, given that occupancy is at 96% today, I guess, where do you see the greatest opportunity to drive NOI and earnings growth, right?

Samir Khanal: Thank you. Good afternoon, everybody. Eli, given that occupancy is at 96% today, I guess where do you see the greatest opportunity to drive NOI and earnings growth, right? Clearly, there is a lot of momentum here, so help us think through about the key drivers of growth, let us call it over the next 12 to 18 months. Thanks.

Speaker #5: Clearly, there's a lot of momentum here. So help us think through the about the key drivers of growth, let's call it, over the next 12 to 18 months.

Speaker #5: Thanks.

Speaker #4: Sure. So first off, our occupancy I think it is important to realize that we are at 96% occupied on the malls and mills I'm sorry, on malls and outlet portfolio.

Eli Simon: Sure. First off, on occupancy, I think, it is important to realize that we are at 96% occupied on The Mills and malls and outlet portfolio. We got 1 million square feet space back in mid-May, and are at the same occupancy level as we were at the end of Q1. I think that is pretty impressive. I think it speaks to the strength of the team and the strength of our portfolio. When I think about the levers of growth, so to speak, occupancy does have a little bit more to go from here. I do not think we would ever be at 100%. We would not want to be. We want the ability to move around tenants, but there obviously is a little bit more from here.

Speaker #4: We got a million square feet of space back in mid-May, and we are at the same occupancy level as we were at the end of the first quarter.

Speaker #4: I think that's pretty impressive. I think it speaks to the strength of the team and the strength of our portfolio. But when I think about the levers of growth, so to speak, occupancy does have a little bit more to go from here.

Speaker #4: I don't think we'd ever be at 100%. We wouldn't want to be. We want the ability to move around tenants, but there obviously is a little bit more from here.

Speaker #4: I think, honestly, above where we finished last year is the team's goal, and I think we'll achieve that. The other piece, obviously, is re-tenanting.

Eli Simon: I think honestly, above where we finished last year is the team's goal, and I think we will achieve that. The other piece obviously is re-tenanting, taking out lower performers, who obviously pay lower rent, and replacing them with new, better tenants that pay more rent. Given their increased productivity is obviously a focus. The last piece is our development pipeline. We have $1 billion in the ground today. We have hopefully $600 million plus that will be approved and start by the end of the year. We are generating 9% return on those investments, which is obviously a very healthy number. Again, when we quote those numbers, that is only on the capital we are spending on those developments.

Speaker #4: Taking out lower performers who obviously paid lower rent and replacing them with new, better tenants that pay more rent. Given their increased productivity, there's obviously a focus.

Speaker #4: And the last piece is our development pipeline. We have $1 billion in the ground today. We have, hopefully, $600 million-plus that will be approved and start by the end of the year.

Speaker #4: We're generating 9% return on those investments, which is obviously a very healthy number. And again, when we quote those numbers, that is only on the capital we're spending on those developments.

Speaker #4: But if you look at what we've done at Southdale, look at what we've done at Brea, look at Briarwood, they're significant benefits to the rest of the center.

Eli Simon: But if you look at what we have done at Southdale, look at what we have done at Brea, look at Briarwood, there is significant benefit to the rest of the center, when we do those developments that are not reflected in those returns. That is another avenue of growth for us. But it is really continuing to do what we have been doing, which I think we have obviously done a good job so far, but we have more to go. We are going to continue to reinvest into our centers and continue to upgrade the merchandise mix. There are a lot of factors that go into our growth, but we feel pretty good about where we sit today.

Speaker #4: When we do those developments that are not reflecting those returns. And so that's another avenue of growth for us. But it's really continuing to do what we've been doing.

Speaker #4: Which I think we've obviously done a good job on so far, but we have more to go. We're going to continue to reinvest in our centers.

Speaker #4: And continue to upgrade the merchandise mix. But there's a lot of factors that go into our growth, but we feel pretty good about where we sit today.

Speaker #1: Our next question is from Michael Goldsmith with UBS. Please proceed.

Operator 2: Our next question is from Michael Goldsmith with UBS. Please proceed.

Operator: Our next question is from Michael Goldsmith with UBS. Please proceed.

Speaker #6: Good afternoon. Thanks a lot for taking my question. I think Brian, in his prepared remarks, talked about 1 million square feet of bankruptcy-related space coming back during the quarter.

Michael Goldsmith: Good afternoon. Thanks a lot for taking my question. I think Brian, in his prepared remarks, talked about 1 million square feet of bankruptcy-related space coming back during the quarter. Can you outline who has been giving you back space? Also, can you just talk about, we have talked a little bit about the occupancy, and you have been able to keep that flat despite giving all that space back. Also talked about how leasing economics are being strong, but can you talk a little bit about the space that you got back, at what rents were they in? Are you seeing kind of similar to the overall new leasing on those boxes? Just trying to understand the economic uplift from replacing the space. Thanks.

Speaker #6: Can you outline who has been giving you back space? And then also, can you just talk about—we've talked a little bit about the occupancy—and you've been able to keep that flat despite getting all that space back.

Speaker #6: You also talked about how leasing economics are strong. But can you talk a little bit about the space that you got back? What rents were they at, and are you seeing rents on those similar to the overall new leasing on those boxes? Just trying to understand the economic uplift from replacing this space.

Speaker #6: Thanks.

Speaker #4: Sure. So the million square feet, basically all of that were the Saks Off 5th, right? Obviously, a pretty public bankruptcy process. That, again, we've leased, right?

Eli Simon: Sure. The 1 million square feet, basically all of that were the Saks OFF 5THs, right? Obviously a pretty public bankruptcy process. That again, we have leased, right? So we had effectively no skipping, no excuses for lower occupancy, right? We got back where we are. Again, as of the end of July, we are at 96.3%. So, we are above where we were. But if you look at Saks, not dissimilar to what we talked about earlier this year, if you look at the boxes in the outlets, they were paying $18 million in rent. The deals we have signed today are already, which about half the space, are already well in excess of that, and the rest are under discussions in near final deals. But we will basically take the $18 million and turn it into $44 million.

Speaker #4: So we had effectively no skipping or no excuses for lower occupancy, right? We got back where we are, and again, as a day in July, we're at 96.3%.

Speaker #4: So we are above where we were. But if you look at stats, not dissimilar to what we talked about earlier this year. If you look at the boxes in the outlets, they were paying 18 million bucks in rent.

Speaker #4: The deals we have signed today are already—well, about half the space is already well in excess of that, and the rest are under discussions and near final deals.

Speaker #4: But we'll basically take the 18 million dollars and turn it into 44 million dollars. The only thing that I'd say is not reflected in '26 or I guess will be reflected in '26 is that we got those boxes back, frankly, later than we thought we would.

Eli Simon: The only thing that I'd say is not reflected in 2026 or I guess will be reflected in 2026, is that we got those boxes back frankly later than we thought we would. We didn't get them back until, I want to say, it was 15 May or 16 May. By the time, again, we hustled, we got leases signed, getting leases signed now, but that's really going to be a 2027 story when those rents start hitting. Again, it's a good news story for us, but that's really the vast majority of that 1 million square feet are the Saks OFF 5THs, which, again, not surprising that we got them back. I think it's overall a good outcome. The replacements have been I don't want to use names because I don't know what's been publicly said or not, but great retailers, blue-chip retailers.

Speaker #4: We didn't get them back until, I want to say, it was May 15th or May 16th. And so, by the time—again, we hustled, we got leases signed. Getting leases signed now.

Speaker #4: But that's really going to be a '27 story when those rents start hitting. But again, let's say it's a good news story for us.

Speaker #4: But that's really the bad. The vast majority of that million square feet are the Saks Off 5th, which again, not surprising that we got them back.

Speaker #4: And I think it's overall a good outcome. And the replacements have been—I don't want to use names because I don't know what's been publicly said or not.

Eli Simon: I think it's overall a good outcome. The replacements have been I don't want to use names because I don't know what's been publicly said or not, but great retailers, blue-chip retailers. A number of expansions, frankly, that might have been elsewhere in the center, wanted more space, some carve-ups, but overall very, very good demand that a lot of them actually had options over who to replace them with, but turned out to be a good news story for us.

Speaker #4: But great, great retailers—blue-chip retailers—a number of expansions, frankly, that might have been elsewhere in the center, wanted more space. Some carve-ups. But overall, very, very good demand. A lot of them actually had options over who to replace them with.

Eli Simon: A number of expansions, frankly, that might have been elsewhere in the center, wanted more space, some carve-ups, but overall very, very good demand that a lot of them actually had options over who to replace them with, but turned out to be a good news story for us.

Speaker #4: But turned out to be a good news story for us.

Speaker #1: Our next question is from Greg McGuinness with Scotiabank. Please proceed.

Operator 2: Our next question is from Greg McGinniss with Scotiabank. Please proceed.

Operator: Our next question is from Greg McGinniss with Scotiabank. Please proceed.

Speaker #6: Hey, good afternoon. Similarly, along those lines of tenants that you’re putting into the centers, you mentioned this substantial re-tenanting. Could you please provide some details on which tenants or categories you’re adding to centers that seem to be resonating with consumers today, versus those where you’re looking to potentially limit exposure? And where do you see the tenant watch list, where does that sit today?

Greg McGinniss: Hey, good afternoon. Similarly along those lines of tenants that you're putting into the centers, you mentioned this substantial re-tenanting. Could you please provide some details on which tenants or categories you're adding to centers that seem to be resonating with consumers today versus those where you're looking to potentially limit exposure, and where you see the tenant watch list, where that sits today?

Speaker #4: Sure. So we are adding, frankly, across a variety of categories—across all geographies, across all platforms. I would say what is most exciting to me is our new and emerging brands, which are across a variety of sectors. These include technology companies, athleisure, home, jewelry—very big in the Gen Z, the teen consumer.

Eli Simon: Sure. We are adding frankly, across a variety of categories, across all geographies, across all platforms. I would say what is most exciting to me is our new and emerging brands, which are across a variety of sectors, includes technology companies, athleisure, home, jewelry, very big in the Gen Z, the teen consumer. We are adding a ton of new brands there that are, in many cases, unique to the market, unique to our center, and really differentiates one of our properties where we add these types of tenancies to other properties. These brands are coming from online, they are coming from Europe, they are coming from Asia, in the beauty space. A number of deals in the beauty space from Asian retailers are coming in. The collectible space, athleisure space obviously continues to grow with new entrants. That is very exciting.

Speaker #4: We are adding a ton of new brands there that are, in many cases, unique to the market and unique to our center. And it really differentiates one of our properties where we add these types of tenants from other properties.

Speaker #4: And so these brands are coming from online. They're coming from Europe. They're coming from Asia and the beauty space. A number of deals in the beauty space from Asian retailers are coming in the collectibles space.

Speaker #4: The athleisure space, obviously, continues to grow with new entrants, and so that's very exciting. When you walk through one of our centers, you see something new.

Speaker #4: You see something that's differentiated, and I think it's resonated with customers. When we add these types of retailers, we see increased traffic—not just for the retailers we add, but also for the other retailers throughout the center.

Eli Simon: When you walk one of our centers, you see something new, you see something that is differentiated. I think it is resonating with customers. When we add these types of retailers, we see increased traffic, and not just for the retailers we add, but for the retailers for the rest of the center. What that has led to, frankly, is if you go and look at some of the legacy players in these spaces where we are adding the new emerging brands, they are reinvesting into their stores. Their stores look so much better. Their merchandise looks better. It is really a great symbiotic relationship, which we are very proud of. The other area of focus, I would say, would be in the restaurant space. We continue to upgrade the restaurants and continue to add restaurants.

Speaker #4: And what that led to, frankly, is if you go and look at some of the legacy players in these spaces, where we're adding the new emerging brands, they're reinvesting into their stores.

Speaker #4: Their stores look so much better. Their merchandise looks better. And it's really a great symbiotic relationship, which we're very proud of. The other area of focus, I would say, would be in the restaurant space.

Speaker #4: We continue to upgrade the restaurants. We continue to add restaurants. If you look, we have a number of high-profile developments and redevelopments that have started and will start over the next call it year or so.

Eli Simon: If you look, we have a number of high-profile developments and redevelopments that have started and will start over the next call it year or so. We are going to add probably $400 million to $500 million of incremental restaurant sales from some of the biggest names out there on a regional, on a national basis. Again, that is something that we can continue to do to create a fresh environment, an exciting environment, and an environment that customers want to go to. So, that is really the focus, but the demand is from a variety of categories, variety of retailers. On the watch list, it is in very good shape. Nothing close to material. Normal course and the extensive happens, we handle an ordinary course of business. It is actually an opportunity for us, Greg.

Speaker #4: We're going to add probably $400 to $500 million of incremental restaurant sales from some of the biggest names out there, on a regional and national basis.

Speaker #4: And so again, that's something that we can continue to do to create a fresh environment, an exciting environment, and an environment that customers want to go to.

Speaker #4: So that's really the focus. But the demand is from a variety of categories, a variety of retailers. On the watch list, it's in very good shape.

Eli Simon: So, that is really the focus, but the demand is from a variety of categories, variety of retailers. On the watch list, it is in very good shape. Nothing close to material. Normal course and the extensive happens, we handle an ordinary course of business. It is actually an opportunity for us, Greg. It is from the watch list is at its low point, but as we have said now, the recapture of space does provide us opportunity to bring in better merchants.

Speaker #4: Nothing close to material. Sort of normal course. And the expense uptick happens. We handle it in the ordinary course of business. It's actually an opportunity for us, Greg.

Speaker #4: It's brought in the watch list, in that it's a low point. But as we've said, now to recapture space does provide us opportunity to bring in better merchants.

Eli Simon: It is from the watch list is at its low point, but as we have said now, the recapture of space does provide us opportunity to bring in better merchants.

Speaker #1: Our next question is from Alexander Goldfarb with Piper Sandler. Please proceed.

Operator 2: Our next question is from Alexander Goldfarb with Piper Sandler. Please proceed.

Operator: Our next question is from Alexander Goldfarb with Piper Sandler. Please proceed.

Speaker #5: Hey, good evening out there. Eli, I just wanted to go back to your Simon Brand Ventures. I think before you had said that it delivers, like, $200 million, and maybe there's a goal of, like, $800 million.

Alexander Goldfarb: Hey, good evening out there. Eli, just wanted to go back on your Simon Brand Ventures. I think before you had said that, I think it delivers like $200 million and maybe there's a goal of like $800 million, but also you have 2 billion people who go through your global portfolio. Just want to get a better sense of, as you look to monetize the visitor count, is this something that you think is near term, like in the next, call it 2 years, that we'll see a material shift in this revenue increase. Or this is something more of a longer-term initiative. I'm just trying to get a handle on it. I mean, 2 billion is certainly a lot of people.

Speaker #5: But also, you have two billion people who go through your global portfolio. Just want to get a better sense—as you look to monetize this visitor count, is this something that you think is near-term, like in the next, call it, two years that we'll see a material shift in this revenue increase?

Speaker #5: Or is this something more of a longer-term initiative? I'm just trying to get a handle on it. I mean, 2 billion is certainly a lot of people.

Speaker #4: Thanks, Alex. So I don't know if you have access to my emails, I guess. I have a draft press release that I guess I can say now.

Eli Simon: Thanks, Alex. I don't know if you have access to my emails, I guess. I have a draft press release that I guess I can say now, that will be launched in the next couple of weeks to launch Simon Media Network, to really, in a more broad way, take advantage of the first-party customer insights that we are getting. As you said, we have billions of visits a year. We probably carry over $100 billion in our domestic portfolio. There'll be an announcement in the coming weeks. But yeah, we think there's a real opportunity here to take sort of our whole ecosystem of, we have obviously our digital footprint with Simon+, with Shop Simon, with Simon Search, our in-house screen network. We have over 4,000 screens, the largest footprint of screens, I think, in the world, that we continue to invest in.

Speaker #4: That will be launched in the next couple of weeks, to launch Simon Media Network, to really, in a more broad way, take advantage of the first-party customer insights that we are getting.

Speaker #4: As you said, we have billions of visits a year and probably generate over $100 billion in our domestic portfolio. So, there will be an announcement in the coming weeks.

Speaker #4: But yeah, we think there's a real opportunity here to take sort of our whole ecosystem—we have obviously our digital footprint with Simon Plus, with Shop Simon, with Simon Search, our in-house screen network.

Speaker #4: We have over 4,000 screens—the largest footprint of screens, I think, in the world—that we continue to invest in. And then now, to take the data we're going to get into Simon Media Network increases something that's really, really interesting both for our endemic brands, the retailers in our centers, but also for non-endemic brands who want access to our consumer, who has a high intent to shop, and to shop—and shop a lot.

Eli Simon: Now to take the data we're going to get into Simon Media Network and create something that's really interesting, both for our endemic brands, the retailers in our centers, but also for non-endemic brands who want access to our consumer, who has a high intent to shop and to shop a lot. It's something we are focused on. I don't know about the 200 to 800. I hope it's that. I hope it's more than that, frankly. But it's a business that's growing at double digits, mid-teens percent year over year. We're investing into it. We're adding screens. We're adding touch points at our centers. One is because we can make a really good return and have a 1 to 2 year payback period. But two is I think it looks good, frankly. I think when done right, I think it adds to our centers.

Speaker #4: And so, it's something we are focused on. I don't know about the 200 to 800—I hope it's that. I hope it's more than that, frankly.

Speaker #4: But it's a business that's growing at double digits, mid-teens percent year over year. We're investing into it. We're adding screens. We're adding touchpoints at our centers.

Speaker #4: One is because we can make a really good return and have a one- to two-year payback period. But two is, I think it looks good, frankly.

Speaker #4: I think, when done right, it adds to our centers. We have our digital directories, which allow you to search for real-time inventory through Simon Search at our centers, which gets great usage.

Eli Simon: We have our digital directories allow us to search for real-time inventory through Simon Search at our centers, which gets great usage. It's something that we are focused on, I am focused on. We think there is a really big opportunity here. Clearly, malls, retail centers at large are having a cultural moment. People realize that they are not going away. Young people want to hang out here. There is an opportunity to, I think, really take advantage of that because we can provide to people who are looking to advertise something that really nobody else can. We are focused on it. Again, I do not know when. We think about this over the long term, but we think there is tremendous opportunity to really grow this business, and obviously it is a great business today, but we really do think that there is an opportunity to make this business much bigger over time.

Speaker #4: And so it's something that we are focused on, I'm focused on. We think there's a really big opportunity here. Clearly, malls and retail centers at large are having a cultural moment. People realize that they're not going away.

Speaker #4: Young people want to hang out here, and there's an opportunity to, I think, really take advantage of that. And because we can provide to people who are looking to advertise something that really nobody else can.

Speaker #4: And so we are focused on it. Again, I don't know when the we think about this over the long term. But we think there's tremendous opportunity to really grow this business.

Speaker #4: And obviously, it's a great business today, but we really do think that there's an opportunity to make this business much bigger over time.

Speaker #5: Thank you.

Speaker #1: Our next question is from Juan Sinabia with BMO Capital Markets. Please proceed.

Alexander Goldfarb: Thank you.

Operator 2: Our next question is from Juan Sanabria with BMO Capital Markets. Please proceed.

Operator: Our next question is from Juan Sanabria with BMO Capital Markets. Please proceed.

Speaker #6: Hi, good afternoon. Hoping you could talk a little bit about your retention strategy. Are you looking to maybe pull that back, given the strength of demand and the ability to drive leasing spreads on new deals, particularly for inline tenants?

Juan Sanabria: Hi. Good afternoon. Hoping you could talk a little bit about your retention strategy. Are you looking to maybe pull that back given the strength demand and the ability to drive leasing spreads on new deals, particularly for inline tenants? If you could talk about kind of the spread between leased versus occupancy and how that has shifted with the 1 million in bankruptcies noted and the lease-up of some of the space subsequently.

Speaker #6: And if you could talk about kind of the spread between leased versus occupancy and how that shifted with the 1 million in bankruptcies noted and the lease-up of some of the space subsequently.

Speaker #4: Sure. So, on the retention side, it's a space-by-space decision that has so many different factors that go into it. It's a relationship with the tenant.

Eli Simon: Sure. So on the retention side, it is a space-by-space decision that has so many different factors that go into it. It is a relationship with the tenant. It is what the replacement, not just rent, but are they adding to the center? It is a complicated story, but it is something we focus on. The team is obviously very focused on downtime. We still are running. For long-term growth, we also obviously have to focus on cash flow in the intermediate term as well. I would not say it is materially changing. To the extent that we think there is an opportunity to replace a tenant with someone who is going to perform better and add more to the center, add more traffic, then obviously, the rent would be higher as well.

Speaker #4: It's, do we, what's the replacement? And not just rent, but are they adding to the center? It's a complicated story. But it's something we focus on. The team is obviously very focused on downtime, right?

Speaker #4: We still are running. Yes, for long-term growth, we also obviously have to focus on cash flow in the intermediate term as well. So, I wouldn't say it's materially changing.

Speaker #4: But to the extent that we think there's an opportunity to replace a tenant with someone who is going to perform better and add more to the center—add more traffic—and then, obviously, the rent would be higher as well.

Speaker #4: We'll look to do it. But it's not like we're going and making a blanket assumption or a blanket call on that. It's really space-by-space, tenant-by-tenant, center-by-center is how we think about that.

Eli Simon: We will look to do it, but it is not like we are going and making a blanket assumption or a blanket call on that. It is really space by space, tenant by tenant, center by center, is how we think about that.

Speaker #4: On the yeah.

Speaker #6: No, Juan, we're still trending around 200 to 310 basis points of signed but not open, and really that got backfilled by the 1 million square feet of leases.

Juan Sanabria: On the-

Eli Simon: Snow

Juan Sanabria: snow, yeah.

Eli Simon: Juan, we are still trending around 310 basis points of signed but not opened. Really, that got backfilled by the 1 million square feet of leases. That is the only leases we backfilled with some of the work we have been doing since we recaptured the Saks OFF 5TH outlet business.

Speaker #6: So as we open leases, we backfilled with some of the work we've been doing since we've captured the sacks out of the the business.

Speaker #6: Thank you.

Speaker #1: Our next question is from Flores Van Dijkum with Latterberg Thelman. Please proceed.

Juan Sanabria: Thank you.

Operator 2: Our next question is from Floris van Dijkum with Ladenburg Thalmann. Please proceed.

Operator: Our next question is from Floris van Dijkum with Ladenburg Thalmann. Please proceed.

Speaker #5: Hey, guys. Thanks. Obviously, very strong NOI growth—even excluding the TRG, over 7%. And sales growth is through the roof with over 13%. Maybe talk a little bit about the breadth of that sales growth.

Floris van Dijkum: Hey, guys. Thanks. Obviously, very strong NOI growth, even excluding the TRG, 7% plus, and sales growth through the roof with 13% plus. Maybe talk a little bit about the breadth of that sales growth. Is this just your top 50 assets carrying the portfolio, or how is the rest of the portfolio doing? What is the bifurcation between your top 50 or 100 assets versus the rest of the portfolio?

Speaker #5: And when you talk about it, I mean, is it just your top 50 assets carrying the portfolio? Or how is the rest of the portfolio doing? What's the bifurcation between your top 50 or 100 assets versus the rest of the portfolio?

Speaker #4: Sure, Flores. So, it's definitely broader than the top 50, right? It's a pretty broad story. Frankly, the sales trends are pretty similar to what we talked about last quarter.

Eli Simon: Sure, Floris. It is definitely broader than the top 50, right? It is a pretty broad story. Frankly, the sales trends are pretty similar to what we talked about last quarter, that luxury remains very strong on the full price side, for sure, on the outlet side, too. But some of the strength of the luxury or tenants that just do not have outlets, obviously the jewelry side, the watch side, that remains very strong, continues to grow. No real sign of slowdown there. But if you look at the juniors brands, which is targeting sort of the Gen Z customer, we have had 16 straight months of positive comps there, which is pretty staggering, obviously, given all the macro noise out there. If you think about a customer group that could be hit, it would be that group.

Speaker #4: That luxury remains very strong on the full-price side, for sure. On the outlet side too. But most of—or, I wouldn't say most, but some of the strength of the luxury are tenants that just don't have outlets, obviously on the jewelry side.

Speaker #4: The watch side—that remains very, very strong and continues to grow. No real sign of slowdown there. But if you look at the juniors brands, which are targeting sort of the Gen Z customer, then we've had 16 straight months of positive comps there.

Speaker #4: Which is pretty staggering. Obviously given all the macro noise out there. And if you would think about a customer group that could be hit it would be that group.

Speaker #4: And that's continued to grow, both with new retailers or new entrants in that space, but obviously with the legacy retailers as well. And so other trends are still holding.

Eli Simon: That has continued to grow, both new retailers or new entrants in that space, but obviously the legacy retailers as well. Other trends are still holding. Restaurants, again, are a little bit softer than the rest of the portfolio. I think maybe that is economic based, but I think there is also other factors, right? Alcohol sales are down. That is obviously something we cannot control. But the story remains positive. Florida remains very strong from Jacksonville and St. Johns County, obviously the greater Miami area and Boca, over to Naples. Orlando has remained very strong. Even the Panhandle continues to grow. That has been a good sign. The border is growing now, but a little bit less than the rest of the portfolio, which impacts the outlets more, just given that we have more outlets on the borders than full price.

Speaker #4: Restaurants, again, are a little bit softer than the rest of the portfolio. I think maybe that's economic-based, but I think there are also other factors, right?

Speaker #4: Alcohol sales are down, so that's obviously something we can't control. But the story remains positive. Florida remains very, very strong, from Jacksonville and St.

Speaker #4: John's. Obviously, the greater Miami area and Boca. Go over to Naples or Orlando—they've remained very strong. Even the Panhandle continues to grow, so that's been a good sign.

Speaker #4: The borders are growing now, but a little bit less than the rest of the portfolio, which impacts the outlets more, just given that we have more outlets on the border.

Speaker #4: The borders than full price. A couple of the better outlets again are growing but a little bit lower than the overall primarily due to the international travel, which yes, it came here for the World Cup.

Eli Simon: A couple of the better outlets, again, are growing but a little bit lower than the overall, primarily due to the international travel, which, yes, it came here for the World Cup, but if you look at our outlet portfolio, Vegas is a key component of that. Orlando is a key component of that, which obviously both did not have World Cup matches. But Orlando also coming off of 12 months of 10% to 15% comp growth, so that naturally slowed down a little. But the reality is it is a broad-based story, that yes, the luxury is very strong, no doubt, but this is not 10, 15 centers carrying. This is malls, this is outlets, this is The Mills. They are all positive comping. Traffic is up across all of them, too.

Speaker #4: But if you look at our outlet portfolio, Vegas is a key component of that. Orlando is a key component of that, which obviously, both didn't have World Cup matches.

Speaker #4: But Orlando also came off of 12 months of 10% to 15% comp growth, so that naturally slowed down a little. But the reality is, it's a broad-based story.

Speaker #4: Yes, the luxury is very strong, no doubt. But this is not 10 or 15 centers carrying it. This is malls. This is outlets. This is mills.

Speaker #4: They're all positive comping, and traffic's up across all of them too. So that's a good news story. Obviously, back to school has hit, I don't know, probably two-thirds of the country right now.

Eli Simon: That is a good news story, is obviously back to school has hit, I do not know, probably two-thirds of the country right now, and in the remaining part as we speak. That is the good news. We look to the holiday season from there.

Speaker #4: And then the remaining part as we speak, and so that's good news. Then we look to the holiday season from there.

Speaker #5: Thanks, Dylan.

Speaker #1: Our next question is from Rich Hightower with Barclays. Please proceed.

Floris van Dijkum: Thanks, Jon.

Operator 2: Our next question is from Rich Hightower with Barclays. Please proceed.

Operator: Our next question is from Rich Hightower with Barclays. Please proceed.

Speaker #7: Hey, good evening, guys. I was curious if you could give us an update on TRG. And I think last quarter you sort of talked about the level of excitement there and some of the upside.

Rich Hightower: Good evening, guys. I was curious if you could give us an update on TRG. I think last quarter, you sort of talked about the level of excitement there and some of the upside. Maybe just give us an update on where we stand there and when do you think that comp really starts to kind of normalize within the contribution to the whole, I guess?

Speaker #7: And maybe just give us an update on where we stand there, and when do you think that comp really starts to kind of normalize within the contribution to the whole, I guess.

Speaker #4: Sure. So, as excited, more excited, continue to be excited—all of the above—on TRG. So, the EBITDA margin—we've increased the EBITDA margin on those assets that we manage.

Eli Simon: Sure. As excited, more excited, continue to be excited, all of the above on TRG. The EBITDA margin, we have increased the EBITDA margin on those assets that we manage. Remember, there is a few of the assets that we do not manage as part of the portfolio. But the assets that we manage, we have increased the margin by 300 basis points this year. I would say there is probably another couple of hundred basis points. Sorry, 300 basis points. There is another couple of hundred basis points to go. That is everything from our purchasing contracts, janitorial, cleaning. It is our parking, it is marketing. You name it, we are focused on it. Every dollar, we are incredibly focused on it. From a comp perspective, the 120 basis points Brian talked about, that is just surely we added 12% additional ownership, right?

Speaker #4: I remember there are a few assets that we don't manage as part of the portfolio. But for the assets that we do manage, we've increased the margin by 300% this year.

Speaker #4: And I would say there’s probably another couple hundred basis points—sorry, 300 basis points. There’s another couple hundred basis points to go. And that’s everything from our purchasing contracts, janitorial, cleaning, parking, marketing, and sort of you name it.

Speaker #4: We're focused on it, every dollar. We're incredibly focused on it. From a comp perspective, the 120 basis points Brian talked about—that just, surely, we added 12% additional ownership, right?

Speaker #4: So, that goes away in the next two quarters. And then that obviously goes away, right? Because then we vote, and then we'll have owned the remaining interest for a year.

Eli Simon: That, it goes away in the next two quarters, and then that obviously goes away, right? Because then we will have owned the remaining interest for a year. Obviously, you get the deal at the end of October, so that narrows as the year goes on. But we think there is a lot of upside over time. Again, we did not make that deal for the next year, for the next quarter. We made that deal for the long term to own really, really, really good assets, and then to do what we do, which is upgrade the merchandise mix, reinvest into them. We have some really exciting stuff going on at Green Hills that hopefully we can announce sooner than later.

Speaker #4: Obviously, you get the deal at the end of October, so that narrows as the year goes on. But we think there's a lot of upside over time.

Speaker #4: And again, we did not make that deal for the next year, for the next quarter. We made that deal for the long term—to own really, really, really good assets.

Speaker #4: And then to do what we do, which is upgrade the merchandise mix and reinvest into them. We have some really exciting stuff going on at Green Hills that hopefully we can announce sooner rather than later.

Speaker #4: Putting a significant amount of money into that center, both on a renovation and adding great, great tenants. Really changing that center—sort of like what we did with Southdale in Edina.

Eli Simon: Putting a significant amount of money into that center, both on a renovation, adding great tenants, really changing that center, sort of like what we did with Southdale and Edina, but in one of the best, if not the best market in the country. International Plaza putting a significant renovation to start soon. Cherry Creek, we just finalized our renovation plans there, to continue to make the best asset in the market better. So it is a long-term story for us. The additional contribution from the 12% obviously goes away soon, but we look for those properties to have significant runway for growth into the future. We are very happy, and we are very excited about the opportunity with those assets.

Speaker #4: But one of the best, if not the best, market in the country. International Plaza—putting significant renovation under way, to start soon. Cherry Creek—we just finalized our renovation plans there.

Speaker #4: So, we continue to make the best asset in the market better. It's a long-term story for us. The additional contribution from the 12% obviously goes away soon.

Speaker #4: But we look for those properties to have significant runway for growth into the future. We're very happy, and we're very excited about the opportunity with those assets.

Speaker #7: Thank you.

Speaker #1: Our next question is from Mike Muller with JP Morgan. Please proceed.

Rich Hightower: Thank you.

Operator 2: Our next question is from Mike Mueller with JPMorgan. Please proceed.

Operator: Our next question is from Mike Mueller with JPMorgan. Please proceed.

Speaker #8: Yeah, thanks. Hi. You have about four and a half billion of unsecured debt coming due in two H and 27. I think about a billion and a half of cash.

Michael Mueller: Yeah, thanks. Hi. You have about 4.5 billion of unsecured debt coming due in 2027, I think about 1.5 billion in cash. Can you talk about how you're thinking about those maturities in the cash today?

Mike Mueller: Yeah, thanks. Hi. You have about 4.5 billion of unsecured debt coming due in 2027, I think about 1.5 billion in cash. Can you talk about how you're thinking about those maturities in the cash today?

Speaker #8: Can you talk about how you're thinking about those maturities and the cash today?

Speaker #4: Hey, Michael. It's Brian. We're as focused as always on our balance sheet and preserving our liquidity. We're active across a variety of markets. We've done two deals in Europe in the past quarter.

Eli Simon: Hey, Mike. Listen, Brian. Our focus is always on our balance sheet and preserving our liquidity. We are active across a variety of markets. We have done two deals in Europe in the past quarter. Certainly looking around the globe for interest opportunities. We have not yet accessed yen funding, but that certainly we are considering. There is a variety of other capital markets executions that are out there. So, we have flexibility. Certainly, tight spreads are incredibly tight, obviously pricing off a higher base rate. But ultimately, there is plenty of capital in the world today to refinance our debt. But certainly, we are still going to be up against a raising interest rate environment or a higher interest rate environment. At the beginning of the year, we had been guiding towards $0.25 to $0.30 of negativity of interest expense on this year.

Speaker #4: Certainly looking around the globe for interest opportunities. We've not yet accessed yen funding, but that's certainly something we're considering. There's a variety of other capital markets executions that are out there.

Speaker #4: So, we have flexibility. Certainly, credit spreads are incredibly tight—obviously pricing off a higher base rate—but ultimately, there is plenty of capital in the world today to refinance our debt.

Speaker #4: But certainly, we're still going to be up against a rising interest rate environment or a higher interest rate environment. At the beginning of the year, we guided towards $0.25 to $0.30 of negative impact from interest expense this year.

Speaker #4: We're about $0.10 into it, so we've got about $0.20 to go for the balance of the year. And that's under the current interest rate kind of market environment.

Eli Simon: We are about $0.10 into it, so we have got about $0.20 to go for the balance of the year. That is under current interest rate kind of market environment. As we head into next year, to your point. So, we certainly are being proactive about our interest expense and managing it appropriately.

Speaker #4: And then, if we head into next year, to your point, we certainly are being proactive about our interest expense and managing it appropriately.

Speaker #8: Thanks.

Speaker #1: Our next question is from Craig Melman with Citi. Please proceed.

Michael Mueller: Thanks.

Mike Mueller: Thanks.

Operator 2: Our next question is from Craig Mailman with Citi. Please proceed.

Operator: Our next question is from Craig Mailman with Citi. Please proceed.

Speaker #9: Hey, guys. Eli, it's always helpful going through the development pipeline and kind of what you guys—the opportunity you have there with the $4 billion.

Craig Mailman: Hey, guys. Eli, it's always helpful going through the development pipeline and what you guys, the opportunity you have there with the $4 billion, I guess. But as you look at the size of your company, $4 billion is 2% to 4% of your total market cap. It's all very helpful, and it's all value accretive. But is there a way to, I guess, create a step function in earnings growth from here? I know Brian was just talking about the liquidity you have, and you guys are searching the globe. I mean, is there any type of opportunity above and beyond to fix the portfolio, drive earnings from there, to grow the platform further, and drive maybe that incremental growth above and beyond what malls and retail generally can deliver on a year in and year out basis?

Speaker #9: I guess, but as you look at the size of your company, right, $4 billion is 2% to 4% of your total market cap.

Speaker #9: I'm just—it's all very helpful, and it's all value-creative. But is there a way to, I guess, create a step function in earnings growth from here?

Speaker #9: I know Brian was just talking about the liquidity you have and you guys are searching the globe. I mean, is there any type of opportunity above and beyond the—?

Speaker #9: To fix the portfolio, drive earnings from there to kind of grow the platform further, and drive maybe that incremental growth above and beyond what malls and retail generally can deliver on a year-in and year-out basis?

Speaker #4: Sure. So there's definitely opportunity. It's something we're always focused on. The great thing about the balance sheet that Brian mentioned is that we can do, and will do, all of the above.

Eli Simon: Sure. So there's definitely opportunity. It's something we're always focused on, right? The great thing about the balance sheet that Brian mentioned is that we can do and will do all of the above. We'll continue to do development and continue to properties. We'll continue to evaluate buying back stock. We still love to own more of what we own, I guess, is the best way to say it, and we know the embedded growth profile given that pipeline that you talked about. But we're also not going to do something just to do it. I think I said this last quarter, and it remains true, is we'll buy stuff and look at acquisitions that's brand accretive that we think we can operate better on our platform. But it has to be at the right price. We're not going to do something just to add scale.

Speaker #4: So, we'll continue to do development and continue to evaluate properties. We'll continue to evaluate buying back stock. We still love to own more of what we own, I guess is the best way to say it.

Speaker #4: And we know the embedded growth profile given that pipeline that you talked about. But we're also not going to do something just to do it.

Speaker #4: I think I said this last quarter, and it remains true, is we'll buy stuff and look at acquisitions that are brand accretive, that we think we can operate better on our platform.

Speaker #4: But it has to be at the right price. And so we're not going to do something just to add scale. I don't think it's the right thing to do.

Speaker #4: But the reality is, we have $9.3 billion of liquidity. We're in a business, or in a balance sheet, that's naturally deleveraging based upon our free cash flow generation. And so, we'll continue to evaluate, and if there are opportunities, the great thing is we know we can execute.

Eli Simon: I don't think it's the right thing to do. But the reality is we have $9.3 billion of liquidity. We're in a business or in a balance sheet that's naturally de-leveraging based upon our free cash flow generation. We'll continue to evaluate, and if there are opportunities. The great thing is we know we can execute. We have the team to execute it. You look at what we did with Brickell last year. Our year one yield there is over 100 basis points higher than our underwriting. That's because we bought really, really, really good real estate at a good price, and also because we're operating it, we're leasing it very well, and we're laser focused on it. We'll continue to do transactions like that, to the extent that they are out there. But we're not going to chase stuff.

Speaker #4: We have the team to execute it. You look at what we did with Brickell last year—our year one yield there is over 100 basis points higher than our underwriting.

Speaker #4: And that's because we bought really, really, really good real estate at a good price, and also because we're operating it—we're leasing it—very well.

Speaker #4: And we're laser-focused on it. So we'll continue to do transactions like that to the extent that they are out there, but we're not going to chase stuff.

Speaker #4: If others want to chase stuff, that's fine. But we love our portfolio. We love the assets we own, and we'll continue to reinvest in them.

Eli Simon: If others want to chase stuff, that's fine. But we love our portfolio. We love the assets we own. We'll continue to reinvest in them and continue to make those assets better. If there are opportunities or when there are opportunities, we're ready to go, and we can move quick, and then add value that way. But we look at it, we've grown NOI 4-plus percent for the last four or five years now, I guess. We have $1 billion in the ground in development. We have $4 billion behind it and much, much more behind that we're actively working on, sort of the shadow part two, I guess. We're focused. We look to continue to grow cash flow, but we're going to do it smartly, and we're going to do it by adding great assets over time.

Speaker #4: We'll continue to make those assets better. And if there are opportunities, or when there are opportunities, we're ready to go and we can move quickly.

Speaker #4: And then add value that way. But we look at it, and we've grown NOI four-plus percent for the last four or five years now, I guess.

Speaker #4: We have the $1 billion in the ground in development. We have $4 billion behind it, and much, much more behind that that we're actively working on—sort of the shadow part two, I guess.

Eli Simon: We have $1 billion in the ground in development. We have $4 billion behind it and much, much more behind that we're actively working on, sort of the shadow part two, I guess. We're focused. We look to continue to grow cash flow, but we're going to do it smartly, and we're going to do it by adding great assets over time. If nothing is out there that we can transact on, that's fine. We'll do what we do and grow the cash flow of the existing assets.

Speaker #4: So we’re focused, and we look to continue to grow cash flow. But we’re going to do it smartly. We’re going to do it by adding great assets over time.

Speaker #4: And if nothing is out there that we can transact on, that's fine. We'll do what we do and grow the cash flow of the existing assets.

Eli Simon: If nothing is out there that we can transact on, that's fine. We'll do what we do and grow the cash flow of the existing assets.

Speaker #9: Great. Thank you.

Speaker #1: Our next question is from Vince Timon with Green Street. Please proceed.

Craig Mailman: Great. Thank you.

Operator 2: Our next question is from Vince Tibone with Green Street. Please proceed.

Operator: Our next question is from Vince Tibone with Green Street. Please proceed.

Speaker #10: Hi, good afternoon. Comparable tenant sales are up about 6% year-to-date, which is much stronger than the last few years. I just wanted to ask, how should we think about potential upside to 2026 NOI and FFO growth from overage rents if these strong sales trends continue for the rest of the year?

Vince Tibone: Hi, good afternoon. Comparable tenant sales are up about 6% year to date, which is much stronger than the last few years. How should we think about potential upside to 2026 NOI and FFO growth from over rents if these strong sales trends continue for the rest of the year? If you could also touch on just kind of what's baked into guidance right now in terms of sales growth for the portfolio, that'd be helpful.

Speaker #10: If you could also touch on just kind of what's baked into guidance right now in terms of sales growth for the portfolio, that'd be helpful.

Speaker #4: Sure. So, I would say we've seen no signs of a slowdown at all, frankly. In fact, traffic—which we have—traffic accelerated in July.

Eli Simon: Sure. I would say we've seen no signs of a slowdown at all, frankly. In fact, traffic, which we have, traffic accelerated in July. I do not think anybody asked about traffic, but traffic was up 2%, I think, in the quarter and 3.6% in July. Good numbers, so I felt like we should say it. We have not seen any change in sales. I would say that sales are the one thing that we cannot control. Obviously, there is a lot of macro factors, geopolitical, political, right, with an election in a couple of months, that are out of our control. I would say when we think about the guidance, I think it is fair to say that if the sales trends continue, we will be above the range we guided. The reality is, it is very hard to know how sales are going to perform.

Speaker #4: And I don't think anybody asked about traffic, but traffic was up 2% in the quarter and 3.6% in July. Good numbers, so I felt like we should say it.

Speaker #4: But so we have not seen any change in sales. I would say that sales are the one thing that we cannot control. Obviously, there are a lot of macro factors—geopolitical, political, right? With an election in a couple of months.

Speaker #4: Those are out of our control. And so, I would say, when we think about the guidance, I think it's fair to say that if the sales trends continue, we'll be above the range we guided.

Speaker #4: But the reality is, it's very hard to know how sales are going to perform. Clearly, overage and sales-based rent is back and weighted, obviously, as you go towards the holiday, or to the holiday season.

Eli Simon: Clearly, overage and sales based rent is back end weighted, obviously, as you go to the holiday season. The guidance effectively assumes a slowdown. If it stays like this, then we obviously will be above that range. We do not really feel comfortable guiding at the same growth just because it is something we cannot control. We can control leasing. We can control how we manage expenses, but we cannot control sales. Although there is nothing that we have seen that would suggest the slowdown is imminent, we thought it was prudent to guide with some sort of sales moderation. Again, very strong numbers. If you look for the six months, it is 6.3% comp growth. That is obviously very good. There are tougher comps in the back half of the year. The malls really started their more positive upward trajectory this time last year.

Speaker #4: And so, the guidance effectively assumes a slowdown. If it stays like this, then we obviously will be above that range. But we don't really feel comfortable guiding at the same growth, just because it's something we can't control.

Speaker #4: We can control leasing. We can control how we manage expenses. But we can't control—we can't control sales. And so, although there's nothing that we've seen that would suggest a slowdown is imminent, we thought it was prudent to guide with some sort of sales moderation.

Speaker #4: But again, very strong numbers. If you look at it for the six months, it's 6.3% comp growth—that's obviously very good. And there are tougher comps in the back half of the year.

Speaker #4: The malls really started their more positive upward trajectory this time last year, so there are a bit tougher comps we'll see. But we are hopeful that the consumer has shown to be resilient.

Eli Simon: There is a bit tougher comps too that we will see, but we are hopeful that the consumer is shown to be resilient. Obviously, stock market being at or near record highs is not insignificant. That is sort of, I guess, the best way to summarize sales. I do not know, Brian, anything?

Speaker #4: Obviously, the stock market being at or near record highs is not insignificant. But that's sort of, I guess, the best way to summarize sales. I don't know.

Speaker #4: Brian, anything?

Speaker #3: No, I think you covered it well, Eli. Ultimately, we would expect, if the current conditions continue, that there will be a further contribution beyond what's baked into our guidance for the year.

Brian McDade: No, I think you covered it well, Eli. Ultimately, we would expect if the current conditions continue, that will be a further contribution beyond our guidance for the year.

Speaker #1: Our next question is from Teo Okay, Sanyu with Deutsche Bank. Please proceed.

Operator 2: Our next question is from Omotayo Okusanya with Deutsche Bank. Please proceed.

Operator: Our next question is from Omotayo Okusanya with Deutsche Bank. Please proceed.

Speaker #10: Hi, yes. Good afternoon. Quick question. Eli, you kind of mentioned comments before about jewelry being very strong, and I guess everything you seem to read in the news is that diamond prices are going down and the younger generation is not buying diamonds and things like that.

Omotayo Okusanya: Hi, yes, good afternoon. Quick question. Eli, you mentioned comments before about jewelry being very strong. I guess everything you seem to read in the news is that diamond prices are going down and the younger generation is not buying diamonds and things like that. Just trying to understand a little bit better why that particular category is doing well, and if there are any categories in particular that you worry about saturation as well.

Speaker #10: So, just trying to understand a little bit better why that particular category is doing well, and if there are any categories in particular that you're kind of worried about saturation as well.

Speaker #4: Sure. So I would say the jewelry space, frankly, for jewelry and watches, it's coming from a variety of price points. It's clearly the luxury, the uber luxury.

Eli Simon: Sure. I would say that the jewelry space, frankly, for jewelry and watches, it is coming from a variety of price points. It is clearly the luxury, the uber-luxury that is just very honestly more demand than supply of those types of items. That allows prices to go up, and the consumer is there. There has also been a lot of new entrants into the space on more of the, I guess, more affordable price point. There is a lot of new entrants in this space that we are doing business with that have great looking stores, attract maybe that younger consumer. It is a category that is important for us. I think, again, these things go in cycles. They change over time.

Speaker #4: That's just, very honestly, more demand than supply of those types of items. So that allows prices to go up. And the consumer is there.

Speaker #4: But also there's been a lot of new entrants into the space on sort of more of the, I guess, more affordable price points. So there's a lot of new entrants in this space that we're doing business with that have great looking stores.

Speaker #4: Track maybe that younger consumer, and so it's a category that's important for us, I think. Again, these things go in cycles; they change over time.

Speaker #4: But right now, that's a trend that we see. We're focused on it, and so it's, can we continue and expand the relationship and expand the stores with some of the more established players in the luxury space that we have great relationships with and want to continue to do more and more business with.

Eli Simon: For right now, it is a trend that we see, we are focused on. Can we continue and expand the relationship and expand the stores with some of the more established players in the luxury space that we have great relationships with, and want to continue to do more and more business with. There is also this new entrant, again, at a different price point, but that are creating really great stores, great environments, that they are focused on getting that younger consumer, in an environment that is Instagrammable, right? For lack of a better word. It is sort of how we view all of our leases is that, we want to go where the consumer goes. We have a great team. We have boots on the ground across the country. We have a great team that is focused on new and emerging brands.

Speaker #4: But also, there's this new entrance—again, at a different price point—but they're creating really great stores, great environments, and they're focused on getting that younger consumer in an environment that is Instagrammable, right, for lack of a better word.

Speaker #4: And so, it's sort of how we view all of our leases—it's that we want to go where the consumer goes. And we have a great team.

Speaker #4: We have boots on the ground across the country. We have a great team that's focused on new and emerging brands, so we go where the customers are and want to give them more of what they want.

Speaker #4: And so that's really what we're doing in that space.

Eli Simon: We go where the customers are and want to give them more of what they want. That is really what we are doing in that space. I think you also see, just given the outperformance of the US relative to the rest of the globe, that you continue to see luxury retailers bringing their product here, their newest and greatest product, because this is where the action is. As long as that continues, we think that the trend line will hold.

Speaker #3: Kyle, I think you also see, just given the outperformance of the U.S. relative to the rest of the globe, that you continue to see luxury retailers bringing their product here—their newest and greatest products—because this is where the action is.

Speaker #3: So as long as that continues, we think that the trend line will hold.

Speaker #10: Fair enough. Thank you.

Speaker #3: Thank you.

Speaker #1: Our last question is from Ronald Camden with Morgan Stanley. Please proceed.

Omotayo Okusanya: Fair enough. Thank you.

Eli Simon: Thank you.

Operator 2: Our last question is from Ronald Kamdem with Morgan Stanley. Please proceed.

Operator: Our last question is from Ronald Kamdem with Morgan Stanley. Please proceed.

Speaker #5: Hey, great. I just had a quick one, just AI related. We’re a couple of months into this journey now, and when you’re thinking about sort of your business, as well as the retailer business, where do you think we are in terms of the adoption of these tools, the better understanding of where the customer is coming from, and starting to see some tangible benefits?

Ronald Kamdem: Hey, great. I just had a quick one, just AI related. We are a couple of months into this journey now, and when you are thinking about your business and as well as the retailer business, where do you think we are in terms of the adoption of these tools to better understanding where the customer is coming from and starting to see some tangible benefits? Is it still too early to see tangible results? Just curious, how that has been going both for your business and the retailers that you partner with. Thanks.

Speaker #5: Is it still too early to see tangible results? Just curious how that's been going, both for your business and for the retailers that you partner with.

Speaker #5: Thanks.

Speaker #4: Sure. So it's obviously early days. I'm not—I don't know if it's the first inning, third inning, but it's definitely early days. I would say from the SPG perspective, I think we've made leaps and bounds to rise over the past several months.

Eli Simon: Sure. It is obviously early days. I do not know if it is the first inning, third inning, but it is definitely early days. I would say from the SPG perspective, I think we have made leaps and bounds strides over the past several months, and there is so much more we can do with our data. We are seeing real efficiencies and insights from our, if you think about it, we have, I do not know, 29,000, 30,000 different leases, so many different REAs, so many different documents and joint venture documents, loan documents, et cetera. We are seeing a lot we can do in that space to be quicker, to be more efficient. So much we can do on the marketing front. Again, we have hundreds of centers, so many different retailers, and the ability to create imagery that is quicker, that looks better is meaningful for us.

Speaker #4: And there's so much more we can do—so much more we can do—with our data. We're seeing real efficiencies and insights from our... think about it.

Speaker #4: We have, I don't know, 29,000, 30,000 different leases; so many different REAs, so many different documents in joint venture documents, loan documents, etc. So we're seeing a lot we can do in that space to be quicker, to be more efficient.

Speaker #4: There's so much we can do on the marketing front. Again, we have hundreds of centers and so many different retailers. The ability to create imagery that's quicker and looks better is meaningful for us.

Speaker #4: It's early days. And I would say, for retailers, again, it's the same thing, right? The predominant hearing is that everyone's starting the journey, and they're focused on it.

Eli Simon: It is early days, and I would say the retailers, again, same thing, right? From over hearing is that everyone is starting the journey. They are focused on it. But I do not think there has been a sea change in how anybody is operating. I think it is just stepping back bigger picture. I think it makes us more bullish on physical real estate, physical retail. I think, and we have seen it, the younger cohorts, the most excited to come to the mall, the most excited to shop in the mall as individual websites tend to become harder to navigate too. From individual retailers, the physical real estate, the ability to have their brand representation becomes more and more important. That leads to more money being reinvested into the stores, creating a better, more unique experience. We think it is great for us, long term.

Speaker #4: But it's not a—I don't think there's been a sea change in how anybody's operating. I think, just stepping back, bigger picture, it makes us more bullish on physical real estate, physical retail.

Speaker #4: I think we've seen it. The younger cohorts are the most excited to come to the mall, the most excited to shop in the mall, as individual websites potentially become hard to navigate to.

Speaker #4: For individual retailers, the ability to have their brand represented in physical real estate is becoming more and more important. That leads to more money being reinvested into the stores, creating a better, more unique experience.

Speaker #4: So, we think it's great for us long-term. But as far as adoption and anything like that, it's obviously early days. And we do, as I mentioned earlier with the Simon Media Network, see that AI will be a big component of that, and our ability to sort through our data better—which is a lot, as you can imagine.

Eli Simon: But as far as adoption and anything like that, it is obviously early days. We do, as I mentioned earlier, with the Simon Media Network, AI will be a big component of that and our ability to sort through our data better, right? Which is a lot as you can imagine. With billions of visits a year and hundreds of billions, 100 plus billion USD of sales. It is a lot of data, a lot of leases, a lot of tenants. There is a lot we can do there to be with our Simon Media Network, and related entities that is really getting up and running. But overall, we look at this as great for us long term. Our job is to continue to make our properties where retailers want to be and where customers want to be. That is really what we are focused on.

Speaker #4: With billions of visits a year and well over $100 billion in sales, it's a lot of data, a lot of leases, a lot of tenants.

Speaker #4: And so there's a lot we can do there with our Simon Media Network and related entities. That's really getting up and running.

Speaker #4: But overall, we look at this as great for us long-term. And our job is to continue to make our properties places where retailers want to be.

Speaker #4: And where customers want to be. And that's really what we're focused on.

Speaker #5: Great. Thanks so much.

Speaker #4: Thank you.

Speaker #1: We have reached the end of our question-and-answer session. I would like to turn the call back over to Eli for closing remarks.

Ronald Kamdem: Great. Thanks so much.

Eli Simon: Thank you.

Operator 2: We have reached the end of our question-and-answer session. I would like to turn the call back over to Eli for closing remarks.

Operator: We have reached the end of our question-and-answer session. I would like to turn the call back over to Eli for closing remarks.

Speaker #4: Thank you, everybody, for your questions, and have a great week.

Eli Simon: Thank you everybody for your questions, and have a great week.

Operator 2: Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.

Operator: Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.

Q2 2026 Simon Property Group Inc Earnings Call

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