On the desk today · Simon Property Group
Everyone said malls were dead. Simon just posted records across every metric. The obituary was premature.
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The Mall That
Refuses to Die
In 1960, two brothers from Indianapolis — Melvin Simon and Herbert Simon — started building shopping centers in Indiana. They had no development experience. They had no architectural background. What they had was a conviction that suburban families would drive to a building with stores inside it if the stores were good enough and the parking was free.
They were right. Over the next three decades, the Simon brothers built one of the largest real estate portfolios in America. They took the company public in 1993. In 1995, Mel’s son — David Simon — became CEO. He has held the title for 31 consecutive years.
I drove past a Simon mall last weekend. The parking lot was full at 2 p.m. on a Saturday. Families, couples, teenagers — all walking into a building that the financial press has been writing obituaries for since Amazon started delivering packages. I parked on the second level, walked in through Nordstrom, passed a line out the door at a restaurant, and ended up in an Apple Store so crowded I couldn’t get to the counter. I thought about the articles I’ve read — “the death of the mall,” “the retail apocalypse,” “the end of brick-and-mortar.” I looked around. The mall didn’t seem to know it was supposed to be dead.
That is the gap between the narrative and the numbers. And the numbers just set records.
Simon Property Group is a REIT that owns, develops, and manages premier shopping destinations — malls, premium outlets, and mixed-use properties. As of December 31, 2025, the portfolio included more than 230 properties across the United States, Europe, Asia, and Mexico. The brands include Simon Malls, Simon Premium Outlets, and The Mills — each targeting a different consumer: luxury at the malls, value at the outlets, and a hybrid at The Mills.
Mel Simon died in 2009 at 82. Herbert Simon died in February 2024 at 89. David Simon — now 65 — leads from Indianapolis, the same city where his father and uncle started.
In fiscal 2025, Simon reported record results across nearly every metric. Total revenue was $6.36 billion — up 6.7%, a record. Real Estate FFO — the operating profit metric REITs use — was $4.81 billion, or $12.73 per diluted share, a record. Net income was $4.62 billion, or $14.17 per diluted share, a record. Domestic Property NOI grew 4.4% to $5.75 billion — a record. Portfolio NOI, including international properties on a constant-currency basis, grew 4.7% to $6.12 billion — a record. Occupancy for U.S. Malls and Premium Outlets ended the year at 96.4%. The Mills ran at 99.2%. And retailer sales per square foot reached $799 — up 8.1% from the year before.
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That 96.4% occupancy number is the answer to the obituary. A dead asset class doesn’t run at 96% occupancy. Dead malls exist — the B- and C-grade properties that lost their anchor tenants, their foot traffic, and their relevance. But Simon doesn’t own those. Simon owns the Class A properties — the Roosevelt Fields, the King of Prussias, the Woodbury Commons — where the retailers want to be because the shoppers are there, and the shoppers come because the retailers are there. The ecosystem is self-reinforcing. And the $799 in sales per square foot — up 8.1% in a year when e-commerce continued to grow — tells you that the shoppers aren’t just browsing. They’re buying.
The pricing power is contractual. Simon’s tenants sign leases that typically run 5 to 10 years with annual rent escalators — often 2% to 3% fixed increases, or tied to CPI. The tenant can’t leave mid-lease without penalty. And when the lease comes up for renewal, the tenant renews — because the alternative is losing a location in one of the highest-traffic retail environments in the country. Base rent per square foot for Malls and Premium Outlets has climbed steadily. And overage rent — the additional rent tenants pay when their sales exceed a threshold — rises with the economy. Simon collects on both.
David Simon said it plainly in the fourth-quarter results: “I am very pleased with our fourth-quarter results, which caps another impressive year of performance for our Company.” He guided 2026 Real Estate FFO of $13.00 to $13.25 per share — another step up from the record year.
The flywheel runs on reinvestment. In 2025, Simon deployed approximately $2 billion in strategic acquisitions and capital improvements — renovating properties, adding dining and entertainment, converting underperforming anchors into mixed-use spaces with hotels, apartments, and offices. The annual report highlighted Southdale Center in Edina, Minnesota — the nation’s first enclosed mall — as an example of accretive reinvestment. Properties that maintain their relevance for seven decades do so because capital is continuously poured back in. The dividend grows because the NOI grows. The NOI grows because the properties improve. And the properties improve because Simon reinvests the cash flow that the obituary writers said would disappear.
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WHY THIS WORKS
Class A malls are not commodity real estate. 96.4% occupancy and $799 per square foot in tenant sales. The highest-quality properties attract the highest-quality tenants — and neither can be replicated online.
Long-term leases with annual escalators lock in rent growth. Tenants sign 5- to 10-year leases with built-in rent increases. The revenue base grows contractually, independent of the broader retail narrative.
Record everything in 2025. Revenue, Real Estate FFO, net income, domestic NOI, and portfolio NOI all hit all-time highs. The business is not declining. It is accelerating.
31 years of one CEO, one strategy. David Simon became CEO in 1995. His strategy — own the best properties, reinvest continuously, raise the dividend — has not changed. Real Estate FFO per share has grown from single digits to $12.73.
Melvin and Herbert Simon started building shopping centers in Indiana in 1960. They bet that people would drive to a building with stores inside it if the experience was worth the trip. Sixty-six years later, more than 230 properties across four continents prove they were right. Mel died in 2009. Herb died in 2024. David — Mel’s son — has been CEO for 31 years and just delivered the best year in the company’s history. The narrative says malls are dead. The numbers say record revenue, record FFO, and 96.4% occupancy. The parking lot is full. The stores are open. And the rent — collected monthly from the tenants who signed the lease — keeps arriving.
