U.S. Malls Seeing Uptick
Simon Property Group, which is the largest mall owner in the U.S., has shared that shoppers are getting back to malls. While this is a positive sign for the commercial real estate market, it is still too early to predict what the trends will be in the coming year.
Simon Property CEO David Simon said that shopper visits and sales have been improving on a week-by-week basis. While it is still a conservative outlook, it does show promising signs for the many malls that have been struggling due to the pandemic.
For the recent period that ended on March 31, Simon reported occupancy rates across its malls at 90.8%. David Simon, the CEO, states: “Between being cooped up, between being locked down, between the stimulus, between celebrating that the country is still around … there’s some level of euphoria around that.”
Simon Property’s total revenue fell from $1.35 billion to $1.24 billion, but the base minimum rent went up to $56.07 from $55.76 within one year. In terms of leasing activity, David Simons said, “We’re making deals across the board with a bunch of people. We do still have some difficult relationships in negotiations that we’re dealing with. And again, I won’t name names. … But if they’re not paying what we think is fair, we’d just rather sit on space.”