The paragraph discusses a conference call for Simon Property Group's first-quarter 2025 earnings. Tom Ward, Senior VP of Investor Relations, introduces the call and notes that David Simon and Brian McDade will be presenting. It provides caution that forward-looking statements may not reflect actual results due to various risks. David Simon mentions that the company started 2025 well, exceeding their plans, acquiring The Mall Luxury Outlets in Italy, and opening their first outlet in Jakarta, Indonesia. The call is limited to one hour, and participants can ask one question each during the Q&A session.

The paragraph highlights the financial performance and leasing activities of a retail real-estate platform for the first quarter. The company boasts a strong balance sheet with over $10 billion in liquidity. Real estate funds from operations (FFO) saw a slight increase compared to the previous year, and the quarter experienced significant lease growth, including 1,500 leases for 5.1 million square feet. There was an increase in occupancy rates for Malls and Premium outlets, as well as for The Mills, alongside rising average base minimum rents. Despite a decrease in interest income, land sales, and lease settlements, overall domestic and portfolio net operating income (NOI) showed year-over-year growth. However, total funds from operations declined compared to the previous year.

The paragraph discusses the financial performance and activities of a company in the first quarter. It highlights a $0.17 per share loss due to non-cash mark-to-market adjustments on Klepierre exchangeable bonds, offset by a $0.07 gain from securities sales, and a $0.05 per share loss from Catalyst Brands restructuring costs. The company is engaged in various development projects, with a net cost of $944 million and plans to start additional projects worth $500 million. Financially, the company completed $2.6 billion in secured loan transactions with a 5.73% interest rate and has a net-debt to EBITDA ratio of 5.2 times and a fixed charge coverage ratio of 4.6 times. The company announced a second-quarter dividend of $2.10 per share, a 5% increase.

The paragraph discusses the reaffirmation of 2025 real estate FFO guidance to a range of $12.40 to $12.65 per share, excluding OPI, despite economic and tariff uncertainties potentially affecting retailer sales. In a discussion with Steve Sakwa from Evercore ISI, David Simon explains that new leasing deals are minimally affected by tariffs, with only four deals impacted due to import concerns from a European retailer. Overall demand remains stable, as retailers focus on long-term planning despite ongoing tariff issues, particularly a 30% tariff on goods from China. Predicting sales remains challenging due to these factors.

The paragraph discusses the uncertainty faced by retailers due to tariffs on goods from China. Many retailers are cautious about their inventory levels because of potential tariff impacts, which could range from 10% to 30%. Those with smaller tariffs might continue business as usual, trying to manage costs by sharing burden with manufacturers and consumers. Despite the uncertainty, one company's sales remain relatively stable, adhering to prior guidance, although inventory levels could be affected. Overall, while sales might be slightly impacted, demand remains strong, and there's no significant decrease in leasing demand observed.

In the paragraph, David Simon discusses the current challenges faced by U.S. retailers due to tariffs, which require them to pay fees before goods can be shipped from China. This has led to many goods remaining in China and fewer shipments reaching the U.S. Simon notes that although there's hope for improving relations, the situation remains uncertain. Craig Mailman from Citi asks about the potential impact on inventory, traffic data, and retail sales, as well as the effect of changes to the de-minimis rule, which might influence market share for some retailers. Simon acknowledges these points and indicates they'll be addressed, with Tom taking notes.

The paragraph discusses the impact of the de minimis loophole, which previously benefited American companies but harmed U.S. retailers who paid tariffs, allowing some Chinese companies to exploit it. The speaker praises the administration for addressing this issue, suggesting it will benefit U.S. retailers in competing against Chinese companies. Additionally, they mention wishing the change had occurred sooner, particularly for companies like Forever 21. Discussing retail sales, the speaker notes no significant pull-forward in sales, attributing variations to factors such as Easter's timing, adverse weather in February, and overall traffic trends. Despite a slight dip in traffic during the quarter, it is up year-to-date, with malls performing well and outlet traffic being stable, factoring in international locations like Mexico and Canada.

The paragraph discusses the slowdown in traffic and sales at some border assets with Canada and Mexico due to ongoing rhetoric, with hopes for normalization once the rhetoric subsides. It also touches on retailers' decisions regarding Q4 inventory from China, noting that many have reduced their exposure or are delaying decisions, with about a month to decide. The paragraph mentions that European retailers are better controlling their production and focusing on pricing strategies for consumers. The conversation then transitions to a question from Samir Khanal with Bank of America.

In this paragraph, David Simon addresses concerns about the impact of economic uncertainty on leasing with retail tenants. He mentions that despite some retailers making adjustments, like backing out of outlet deals, the overall situation remains stable with strong demand and constrained supply. Simon emphasizes that there's been a significant reduction in reliance on Chinese imports and that most major retailers have adapted well. However, he expresses some concern for smaller, local retailers ("mom and pop" stores) which may face pressure if conditions don't stabilize. Overall, while the current approach to leasing hasn't changed significantly, there is a cautious watch on the effects on smaller businesses.

In this paragraph, Michael Goldsmith from UBS asks David Simon about the leasing of spaces previously occupied by Forever 21. Simon indicates that demand is strong, with over half the spaces already leased, and they're working with retailers like Primark and Zara. They expect to double the rent within two years as they lease out around 100 stores. Brian McDade confirms that about half of the leased spaces will start paying rent this year and the rest next year, ultimately doubling rents. Michael thanks them, and Alexander Goldfarb from Piper Sandler poses a new question, noting Simon's previous remarks on mom-and-pop retailers, which contrasts with prevalent recession and job loss concerns seen in media.

The paragraph discusses the current economic outlook, focusing on sales and the factors influencing them. Although consumer sentiment appears stable and sales are flat, there is uncertainty around inventory levels and future sales predictions. There is also concern about a potential decline in tourism to the U.S., which could impact sales from non-U.S. consumers. The speaker anticipates that sales might be slightly up compared to the previous year but overall expects a cautious consumer behavior due to an uncertain economic environment.

In this conversation, David Simon discusses the performance of their international portfolios, indicating stability in Europe and Asia despite some fluctuations, such as varying trends in Korea and Japan. He notes that their business is not significantly driven by the US consumer, with more tourists like Germans and Chinese visiting Europe instead. Following this, Caitlin Burrows from Goldman Sachs asks about the unpredictability of Operating Property Income (OPI) compared to tenant sales results and requests insight into the OPI performance in the first quarter, as well as expectations for revenue and cost synergies planned for 2025.

The paragraph discusses the impact of tariffs on JCPenney and other brands within the Catalyst Group, which include Brooks Brothers and Lucky, and are partially owned by David Simon's company. The company has seen improvement in its businesses, with some brands benefiting from synergies after a merger and the bankruptcy of F21. There is some concern about sourcing goods from China, as JCPenney and these brands may need to consider alternative suppliers due to tariffs. The US market's size provides the brands with some leverage in negotiations with suppliers. Despite the challenges, Brooks Brothers is reportedly performing well.

In the paragraph, the discussion involves David Simon and others addressing the company's performance, noting that despite economic uncertainties and tariffs, they still expect Catalyst to achieve positive EBITDA this year. David jokingly comments on a colleague's shirt, linking it to Brooks Brothers. The conversation shifts to Greg McGinniss from Scotiabank, who asks about whether macroeconomic uncertainties have led the company to adjust its capital plans or strategies, such as reconsidering development activities, capital expenditures, or acquisitions. David Simon responds, indicating that the company continues to make long-term decisions and emphasizing that they have managed their financial strategy well in the past, even during challenging times like COVID-19 and the financial recession, suggesting they are not currently overextending themselves.

The paragraph discusses the cautious approach being taken by the speakers regarding their development pipeline and potential acquisitions. While they recognize various opportunities and maintain a strong pipeline, they are holding back on starting new projects until costs are finalized, mainly due to expected increases in construction costs and current market volatility. Although they remain open to acquisitions and some deals, they emphasize the importance of careful capital allocation and suggest that the development pipeline may not exceed $1 billion for the time being. The general sentiment is one of caution due to changing market conditions, but they remain open to seizing opportunities as they arise.

In the paragraph, a discussion takes place among Brian McDade, Greg McGinniss, Floris Van Dijkum, and David Simon about ongoing projects and the SNO (Signed Not Open) pipeline. Brian mentions that they plan to start $500 million worth of new projects, which are not part of a previously discussed $1 billion spending plan. Floris asks about the SNO pipeline, which has grown from 250 to 300 basis points, equating to about $150 million worth of rent at average rates. Not all of this will be additive to current space, with 30-40% expected in the latter half of the current year and more coming in 2026 and 2027, including leases from Forever 21 spaces. The conversation then shifts to a new question from Vince Tibone regarding trends in tenant sales.

In the discussion, David Simon addresses the impact of certain tenants on the trailing 12-month portfolio sales results, noting that overall sales are relatively flat, with some minor variations due to factors like weather and location. He mentions that two retailers had flat sales but doesn't specify who they are. Simon also notes that sales in malls slightly increased while outlets faced a slight decline, partly due to weather issues and some softness in border activities. On the topic of department stores, Brian McDade explains that the impact of tariffs on department stores depends on whether they have private label products, as those without private labels don't have substantial tariff exposure. Overall, Simon notes that their top 25 retailers are performing adequately.

The paragraph discusses the complexities in pricing and sales for department stores, particularly focusing on their relationships with wholesalers and the impact of tariffs, which vary based on whether a store has a significant private label business. It highlights department store closures but notes no major changes are expected immediately. The conversation shifts to sales trends, mentioning that sales would be positively impacted when viewed on a net operating income (NOI)-weighted basis. David Simon notes that better-performing properties are improving, and Brian McDade adds that 100 assets have seen a sales increase of about 1.5%, although this doesn't account for differences in Easter timing between years.

The paragraph involves a discussion among Brian McDade, Michael Mueller, and David Simon regarding a $500 million development project. Brian McDade explains that 60% of the development is retail, with the remaining 40% being mixed-use components. David Simon adds that the $500 million represents their share, indicating the total development is larger, especially as they have a residential project at Brea Mall with a partner. Following this, Ronald Kamdem from Morgan Stanley inquires about changes to financial guidance, specifically concerning domestic property NOI, bad debt, and interest cost headwinds. David Simon and Brian McDade indicate that there have been no significant changes to the previous guidance, although they expect some increase in interest expenses due to debt refinancing.

In the paragraph, Ravi Vaidya inquires about the performance and leasing demand from luxury tenants. David Simon responds that the situation is brand-specific, with some brands doing exceptionally well while others are undergoing brand updates. He notes that there hasn't been a significant change in mood or commitment from luxury brands, and overall sales are relatively flat. Linda Tsai then asks whether there might be a scenario where demand shifts to the third quarter due to early holiday shopping or inventory concerns. David Simon acknowledges that this is possible and that historically, margins might improve in such cases, suggesting that it's a situation that could develop. Finally, the operator indicates a switch to the next questioner from Deutsche Bank.

In the paragraph, Omotayo Okusanya inquires about the market conditions for refinancing $2.8 billion of debt, particularly changes in Loan-to-Value ratios and lenders' perspectives on the asset class. David Simon and Brian McDade respond by indicating that lenders are comfortable with the asset class and that their company's positive financial status allows them to refinance existing debt without seeking additional capital. They mention plans to refinance $1.6 billion in the unsecured market and note that there is interest from vendors and insurers. David Simon concludes with optimism regarding the market's stability and financial comfort in retail real estate. The paragraph ends with the conclusion of the Q&A session and David Simon's closing remarks expressing optimism about market certainty improving soon.

The paragraph instructs readers that they may disconnect their lines and wishes them to enjoy the remainder of their day.

This summary was generated with AI and may contain some inaccuracies.