Analysis of Simon Property Group (SPG) and the 'Dead Malls' Misconception

This analysis is based on a Reddit discussion (2025-12-03 UTC) [0] debating the “dead malls” misconception surrounding Simon Property Group (SPG). The discussion presents a split view: bearish on traditional malls due to online shopping (low support) and bullish on mixed-use malls as thriving community spaces, with SPG’s adaptable properties receiving moderate support. Analytical data [0] challenges the dead mall narrative: SPG’s portfolio maintains high occupancy (96.4% for Malls/Premium Outlets, 99.4% for Mills) as of Q3 2025, with 1,000+ leases signed in Q3 (30% new deals) including experiential and digital-first tenants like Meta, Netflix, and Apple. SPG’s focus on mixed-use development (45% of net development costs [0]) aligns with the Reddit user’s example of a successful local mixed-use mall, reducing reliance on traditional retail and mitigating e-commerce risks. The stock recovered from a mid-2025 low of $136.34 to ~$182 by December 2025, supported by Q3 2025 FFO growth (5.6% YoY) and a 4.8% dividend increase [0]. A comparison with Brookfield (BAM) shows SPG’s stronger 5-year performance (+108.79% vs. BAM’s +63.16% [0]), though BAM has a broader global portfolio.

1. Consumer preference for experiential spaces drives mixed-use viability
   : SPG’s high occupancy and tenant diversity highlight that malls evolving beyond retail (to include residential, hotels, entertainment) can thrive amid online shopping trends [0].
2. Operational resilience mitigates sector misconceptions
   : SPG’s 70-year history, high lease renewal rates, and strategic mixed-use pipeline position it as a resilient player in the retail real estate sector [0].
3. K-shaped recovery benefits SPG’s high-end centers
   : The focus on premium outlets and Mills (99.4% occupancy) aligns with stronger spending by higher-income consumers, supporting stable cash flow [0].

• Mixed-use development pipeline (45% of net costs)
  reduces retail reliance [0].
• High occupancy (96.4-99.4%)
  and tenant demand from experiential brands support growth [0].
• Dividend growth (4.8% YoY)
  and stock recovery present potential value [0].
• Acquisition of Taubman Realty Group assets
  enhances portfolio quality [0].

• Bearish sentiment toward traditional malls may persist despite data [0].
• E-commerce competition remains a long-term industry challenge [0].
• Stock has not yet reclaimed Feb 2025 highs ($190.14) [0].
• Limited data on specific conversion projects mentioned in the Reddit thread (police units, churches) creates uncertainty about scalability [0].

Simon Property Group (SPG) is an asset management firm with a resilient retail real estate portfolio, challenging the “dead malls” narrative. Key metrics include:

• Portfolio occupancy: 96.4% (Malls/Premium Outlets), 99.4% (Mills) [0]
• Mixed-use development: 45% of net development costs [0]
• Stock performance: Recovered to ~$182 (Dec 2025) from mid-2025 low of $136.34 [0]
• Q3 2025 FFO growth: 5.6% YoY; dividend increase: 4.8% [0]
• 5-year returns: +108.79% (vs. BAM’s +63.16%) [0]

Information gaps include detailed data on specific conversion projects, direct comparison of SPG and BAM Class A portfolios, and validity of long-term price targets ($220-$250).