Simon Property Group, the biggest mall owner in the U.S., said Wednesday (July 31) it is considering retail investment as it looks to keep stores in the black, according to CNBC.
“I think it’s very possible — we’re going to be very smart about it,” Simon CEO David Simon said on a post-earnings conference call. “We’re certainly as good as the private-equity guys when it comes to retail investment. And so, I wouldn’t rule it out.”
Simon added that the company would be selective in supporting retailers, only buying into brands with volume.
Simon and mall owner General Growth Properties, now owned by Brookfield Property Partners, partnered to save Aeropostale out of bankruptcy court, salvaging its real estate. A total liquidation would have left them with more than 200 empty shops, the article said.
In February, Simon said he was “nervous” about additional retail bankruptcies happening during the first quarter. Later in that month, teen apparel retailer Charlotte Russe, personalized-gift company Things Remembered and shoe store Payless all filed for bankruptcy. In fact, there have been more store closures announced by U.S. retailers so far this year than in all of 2018.
Simon is on board with the trend toward shopping destinations, and the concept continues to wield investment power as malls undergo remakes for the 21st century. Simon is planning to invest $5 million in the eSports entertainment company Allied Esports.
New types of tenants are being added to Simon’s malls since vacancy rates rose during the first quarter of 2019 to 9.3 percent from 9 percent in the fourth quarter of 2018. The company also plans to open at least five Marriott International hotels at its properties in the coming years. At its Phipps Plaza mall in Atlanta, there will be a Nobu Hotel and a 90,000-square-foot Lifetime Fitness complex.
Simon also announced a partnership in May with Ohio-based marijuana company Green Growth Brands to open 108 locations this year at its properties, including Roosevelt Field Mall in New York and The Galleria in Houston.
Date: August 1, 2019