Given current in-line rents of $60-$65, are new leases being signed in the mid-$70s, and what is the opportunity for rent growth?

Year-to-date, new leases have been signed at approximately $78. While renewals are typically in the mid-single digits, the trajectory for new leases is positive. The focus is on finding the right retailer for each space, considering performance and contribution to the center, rather than a simple market rent increase. “So if you look at year-to-date, I think we've signed new leases at $78 more or less. And -- but what you have to focus on those leases coming due is a large number of them will renew.”

With occupancy at 96%, what are the key drivers for NOI and earnings growth over the next 12-18 months?

Occupancy has a little more room to grow, with a goal to exceed last year's finish. Retenanting lower-performing tenants with new, higher-rent tenants is a focus. The development pipeline, with $1 billion currently in the ground at a 9% yield and an additional $600 million expected to start, is a significant growth avenue, enhancing centers beyond direct returns. “occupancy does have a little bit more to go from here. I don't think we'd ever be at 100%. We wouldn't want to be. We want the ability to move around tenants, but there obviously is a little bit more from here. I think, honestly, above where we finished last year is the team's goal, and I think we'll achieve that.”

Who returned the 1 million square feet of space, and what is the economic uplift from re-leasing those boxes compared to their previous rents?

The 1 million square feet primarily came from Saks Off Fifth. The original rent for these boxes was $18 million. New deals signed for about half of this space are already well in excess of that, with the company targeting $44 million for the full space. The economic uplift will primarily be reflected in 2027, as the boxes were returned later than expected. “So the 1 million square feet, basically all of that were the Saks Off Fifth's, right? ... But we'll basically take the $18 million and turn it into $44 million.”

SPG

Simon Property Group (SPG) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Real Estate· Aug 10, 2026

Source: earnings call transcript

Executive summary

Simon Property Group Q2 FY26 — Strong Leasing Demand and FFO Growth

Simon Property Group delivered strong Q2 FY26 results, driven by robust leasing demand, effective property management, and strategic reinvestment. The company saw accelerated FFO and NOI growth, maintained high occupancy levels, and significantly increased base rents on new leases. Management is focused on continued portfolio enhancement and strategic capital allocation, while acknowledging potential macro headwinds.

Highlights

Domestic property NOI increased 8.5% year-over-year in Q2 FY26.
Real estate FFO per share increased 7.9% year-over-year to $3.29 in Q2 FY26.
Signed over 1,200 leases totaling over 4.8 million square feet in Q2 FY26, with new deals up more than 20% compared to last year.
Initial base minimum rent per square foot on new deals is up 17% year-over-year year-to-date, while tenant allowance is down 12%.
Occupancy at Malls and Premium Outlets was maintained at 96% at quarter-end, despite absorbing 1 million square feet of bankruptcy-related space.

Concerns

Higher interest expense and lower interest income combined for a $0.06 per share drag year-over-year in Q2 FY26.
Full-year guidance assumes some sales moderation for the remainder of the year, despite current strong trends, due to uncontrollable macro factors and tougher H2 comps.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Real Estate FFO per share	$13.20 to $13.30 high materiality	FY26 · 2026	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Domestic Property NOI growth for the second quarter.	—	8.5%	—	—
Domestic Property NOI growth for the first half of the year.	—	7.6%	—	—
Portfolio (including international at constant currency) NOI growth for the second quarter.	—	8.3%	—	—
Portfolio (including international at constant currency) NOI growth for the first half of the year.	—	7.5%	—	—
Malls and Premium Outlets Occupancy was flat compared to Q1 and year-over-year, absorbing 1 million square feet of bankruptcy-related space. Occupancy: 96%Average base minimum rent growth: 6.3% YoYSales per square foot: $838Total sales volume growth: 7.6% (Q2)Comparable sales growth: 5.7% (Q2)Occupancy cost: 12.5%	—	—	—	—
The Mills Strong occupancy and ADR growth. Occupancy: 98.8%ADR growth: 12.3%	—	—	—	—

SPG operating KPIs by quarter

SPG operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Jun 2025 Q2 FY25	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Change vs prior quarter
Square feet Leases signed	6.1M sq ft We signed more than 1,500 leases for 6.1 million square feet in the quarter. Source: earnings call transcript	5.1M sq ft+ We signed 1,300 leases for more than 5.1 million square feet in the quarter. Source: earnings call transcript	3.6M sq ft+ We signed approximately 1,000 leases for more than 3.6 million square feet in the quarter, with approximately 30% of our leasing activity for the quarter on new deals. Source: earnings call transcript	~4M sq ft Retailer demand remains strong as we signed over 1,000 leases totaling approximately 4 million square feet during the quarter. Source: earnings call transcript	4.4M sq ft+ We signed more than 1,300 leases totaling over 4.4 million square feet during the quarter and over 4,600 leases for more than 17 million square feet for the year. Source: earnings call transcript	4.7M sq ft+ During the first quarter, we signed more than 1,100 leases totaling over 4.7 million square feet. Source: earnings call transcript	4.8M sq ft+ During the second quarter, we signed more than 1,200 leases totaling over 4.8 million square feet. Source: earnings call transcript	—
Occupancy rate Malls and Premium Outlets	96.5% Malls and outlet occupancy at the end of the fourth quarter was 96.5%, an increase of 70 basis points compared to the prior year. Source: earnings call transcript	95.9% Malls and premium outlet occupancy at the end of the quarter was 95.9%, an increase of 40 basis points compared to the prior year. Source: earnings call transcript	96% The Malls and Premium Outlets ended the second quarter at 96.0% occupancy, up 10 basis points sequentially and 40 basis points year-over-year. Source: earnings call transcript	96.4% The Malls and Premium Outlets ended the third quarter at 96.4% occupancy, an increase of 40 basis points sequentially and 20 basis points year-over-year. Source: earnings call transcript	96.4% Malls and Premium Outlets ended the year at 96.4%. Source: earnings call transcript	96% Malls and Premium Outlet occupancy at the end of the first quarter was 96%, an increase of 10 basis points year-over-year. Source: earnings call transcript	96% Malls and Premium Outlets occupancy at the end of the second quarter was 96%, flat compared to the first quarter and year-over-year, a result that reflects the depth of retail demand as we absorbed approximately 1 million square feet of retailer bankruptcy-related space returned during the quarter and successfully relet. Source: earnings call transcript	0 pt
Occupancy rate The Mills	98.8% The Mills occupancy was 98.8%, an increase of 1% and is at a record level. Source: earnings call transcript	98.4% The mills occupancy was 98.4%, an increase of 70 basis points compared to the prior year. Source: earnings call transcript	99.3% The Mills achieved a record 99.3% occupancy, an increase of 90 basis points sequentially and 110 basis points from the prior year. Source: earnings call transcript	99.4% The Mills achieved a 99.4% occupancy, an increase of 10 basis points sequentially and 80 basis points from the prior year. Source: earnings call transcript	99.2% Occupancy in the Mills ended at 99.2%. Source: earnings call transcript	99.2% The Mills occupancy was 99.2%, an increase of 80 basis points year-over-year. Source: earnings call transcript	98.8% The Mills occupancy was 98.8%. Source: earnings call transcript	-0.4 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Total development pipeline $4B Q2 FY26 end

Projects expected to generate attractive returns and support long-term growth.

Deals & partnerships

TRG Acquisition of remaining 12% interest in TRG

The company acquired the remaining 12% interest in TRG, with plans for long-term reinvestment and merchandising upgrades in properties like Green Hills, International Plaza, and Cherry Creek.

Capital programs

Development projects underway underway $1.07B

Benefit:Blended yield of 9%

Company's share of net cost for development projects across all platforms, approximately 50% for mixed-use projects.

New development starts planned >$600M

Start: H2 FY26

Projects representing additional net cost expected to start construction in the second half of the year.

Center enhancements completed, underway or recently approved >$400M

Benefit:Common area upgrades, landscaping, lighting, amenities

Committed over the last 4 years to create a more elevated shopping experience.

Risks & headwinds

Higher interest expense and lower interest income Q2 FY26

$0.06 per share drag YoY

Mitigation:Proactive management of interest expense and balance sheet, exploring various capital markets for refinancing.

Sales moderation Remainder of FY26

Guidance assumes slowdown

Mitigation:Acknowledged as uncontrollable macro factors (geopolitical, political, etc.) and tougher H2 comps. If current trends continue, results will exceed guidance.

Refinancing of unsecured debt 2H FY27

$4.5B

Mitigation:Actively exploring a variety of markets (Europe, considering Yen funding) and capital market executions to refinance debt, acknowledging a higher interest rate environment.

What to watch in Q3 FY26

Full-year FFO per share guidance

Next quarter (Q3 FY26 call)

Current $13.20-$13.30

Target Above current range

Why it matters

Continued strong sales trends could lead to an upward revision of full-year FFO guidance, impacting investor expectations.

If we -- if it stays like this, then we obviously will be above the range we guided.

Find out whether SPG delivers this. Inve re-checks your case every morning.

Q&A highlights

Discuss the outlook for TIs, if reducing them is a goal, and how FAD growth has recently outpaced NOI/FFO growth.

TIs are a function of tenant demand, space supply, and tenant credit. The company aims to grow cash flow, with FAD up over 9% year-to-date. Reinvesting in centers drives new leases and retailer commitment, contributing to overall cash flow growth.

“But what I do want to highlight or reiterate, which I said on the call -- in the prepared remarks, is we are reinvesting back into our centers in a big way, and that is noticeable from the consumers and really from the retailers.”

asked by Caitlin Burrows (Goldman Sachs) · answered by Eli Simon

2 min read 6 chapters

Detailed narrative

Leasing Momentum and Tenant Demand

Simon Property Group demonstrated strong leasing activity in Q2 FY26, signing over 1,200 leases totaling more than 4.8 million square feet. The number of new deals increased by over 20% year-over-year, representing approximately 28% of total leased square feet. Initial base minimum rent on new deals is up 17% year-over-year year-to-date, while tenant allowance per square foot on new deals is down 12%.

The company has completed over 87% of its 2026 expirations and reports a building pipeline of prospective deals, reflecting broad-based tenant demand.

Retailer Sales and Traffic Performance

Malls and Premium Outlets reported sales of $838 per square foot, a 13.9% increase. Total sales volume grew 7.6% in Q2 FY26 and 6.6% over the trailing 12 months, with comparable sales growth of 5.7% for the quarter. Shopper traffic accelerated, increasing 2% in Q2 and 3.6% in July.

The company highlighted successful activations like the fifth annual National Outlet Shopping Day and World Cup events, underscoring the portfolio's appeal.

Development and Redevelopment Activity

The company has development projects underway with its share of net cost totaling $1.07 billion, expected to generate a blended yield of 9%. Approximately 50% of this investment is allocated to mixed-use projects. An additional $600 million in net cost projects are expected to commence construction in the second half of 2026.

The overall development pipeline remains robust at over $4 billion, aimed at enhancing properties and supporting long-term FFO and dividend growth. Over $400 million has also been committed to center enhancements.

TRG Acquisition Impact and Future Upside

The acquisition of the remaining 12% interest in TRG contributed 120 basis points to NOI growth in Q2 and H1 FY26. Management reported a 300 basis point increase in EBITDA margin on managed TRG assets this year, with potential for further improvement.

The company views TRG as a long-term strategic investment, with plans for significant reinvestment and merchandising upgrades in properties like Green Hills, International Plaza, and Cherry Creek, expecting substantial future growth.

Simon Media Network Launch

Simon Property Group plans to launch the Simon Media Network in the coming weeks to monetize its first-party customer insights. Leveraging billions of annual visits and over $100 billion in domestic portfolio sales, the network will utilize the company's digital footprint (Simon+, ShopSimon, Simon Search) and extensive in-house screen network.

This initiative is expected to drive double-digit, mid-teens percentage growth year-over-year, with a 1-2 year payback period on investments, catering to both endemic and non-endemic brands.

Balance Sheet Strength and Capital Allocation

The company ended Q2 FY26 with approximately $9.3 billion in liquidity, a net debt-to-EBITDA ratio below 5.0x, and fixed charge coverage of 4.7x. This robust balance sheet supports continued reinvestment, potential stock buybacks, and strategic acquisitions. Management is actively exploring various capital markets for refinancing upcoming debt maturities, including unsecured debt of approximately $4.5 billion due in 2H 2027, while acknowledging a higher interest rate environment.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.