Retailers are looking to renew their leases on space in malls as much as three years before their current lease expires, Simon Property Group CEO, President and Chief Operating Officer Eli Simon said Monday (May 11).
Simon was speaking during the first quarter earnings call for the company, which owns shopping, dining, entertainment and mixed-use destinations across North America, Europe and Asia.
“What’s interesting when talking to the leasing team is retailers are now wanting to talk about their 2027, 2028, 2029 expirations, which historically might have been more of a luxury tenant phenomenon, who think, much like we do, in terms of decades, not quarter to quarter,” Simon said. “We’re actually hearing from legacy retailers in our existing portfolio, non-luxury, that actually want to start having those conversations because I think they understand this pipeline too and the interest in our space.”
As of the end of the first quarter, March 31, Simon Property Group had recorded year-over-year increases in its U.S. malls and premium outlets operating statistics, according to a Monday earnings release.
Over the year, occupancy rose 10 basis points to 96%, base minimum rent per square foot increased 5.2% to $61.99, and reported retailer sales per square foot rose 11.8% to $819.
U.S. malls and premium outlets accounted for 77.1% of Simon Property Group’s net operating income during the first quarter, according to a supplemental presentation released Monday.
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Simon said during the call that in the first quarter, the company signed more than 1,100 leases totaling over 4.7 million square feet, with about 25% of its leasing volume being new deals. He added that the company has completed more than 75% of its 2026 expirations, which puts it ahead of last year’s pace, and that the pipeline of deals is “significantly larger” than it was at this time last year.
“Occupancy gains, increased shopper traffic and higher retailer sales drove strong cash flow growth in the quarter, reflecting solid fundamentals across all our platforms, the resilience of the consumer, and the strength and breadth of tenant demand we have for our centers,” Simon said. “Retailer demand remains broad-based, spanning new and legacy retailers across a wide range of categories in all of our platforms and geographies.”
