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Simon Property Group Reports Solid Key Operating Metrics


Marking Simon Property Group’s 25th year as a public company, the company reported its full 2018 FFO per diluted share to be $12.13 an increase of 8.2% year-over-year. “We beat the top end of our initial 2018 guidance by an impressive $0.11,” said David Simon, chairman and CEO, on the firm’s Q4 call.

He explained that “Over the last four years, we’ve grown our FFO per share on a compound annual basis of 8%. And to provide perspective on our FFO generation, we produced approximately $165 million in our first full year as a public company, $165 million. And in 2018, we produced $4.3 billion. Through the commitment to our strategy, active portfolio management, disciplined investment, relentless focus on operations and cost structure, we have increased our annual FFO generation by more than 25 times since our IPO.”

For the fourth quarter, he explained that FFO was $1.15 billion or $3.23 per share, an increase of 3.5% year-over-year. “We continue to grow our cash flow and report solid key operating metrics. Total portfolio increased 3.7%, more than $230 million for the year. Our top NOI increased 2.3% for the year and 2.1% for the fourth quarter.”

Leasing activity for the company also remains solid with average base rent at $54.18. “The malls and the Premium Outlets recorded leasing spreads of $7.75 per square foot, an increase of 14.3%. We are pleased that retail sales momentum continued in the fourth quarter. Reported retail sales per square foot for the mall and outlet was a record $661 compared to $628 in the prior year period, an increase of 5.3%.”

As for retail sales, he says that retail sales were strong across the portfolio, with growth in consecutive months throughout the year. “And each platform ended the year at record retail sale levels. Our mall and premium outlet occupancy ended the quarter at 95.9%, an increase of 40 basis points from the third quarter, an increase of 30 basis points compared to the year prior. And leasing activity accelerated throughout the year, with occupancy for the combined malls and Premium Outlets increasing 130 basis points from the end of the first quarter through the year-end.”

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