SImon Property Group 2Q15 Earnings Call Notes

Our share buyback should be taken as a signal that we are out of the big deal business

“I think it should also signal, we are out of the big deal business. So I think no ones picked that up, but we don’t see any big deals on the horizon for us. So we are obviously very focused on the development, redevelopment as you know I mean I stumble I’m not a very good reader of a text, but you look at our activity in the redevelopment and new development it’s astronomical, it’s industry-leading lots of great stuff going on and I think that’s the way to look at it.”

Four categories of retailers growing in malls: international, e-tailers, brand extenders, and brand new concepts

“think there’s four categories of retailers that we’re really seeing a lot of business with. International retailers, the e-tailers that are looking for a presence in our properties. We recently just announced and have opened Blue Nile and Bauble Bar, and we’re working with a number of others that want to come into the properties. Our existing retailers that are looking to grow through brand extension. Maybe you just saw Dick’s announce the Chelsea Collective this fall. L Brands is rolling out White Barn Candle. And the last are just the new retailers that are coming online and just to – we’ve done deals recently with Mont Blanc, Frye Boots, Jo Malone’s, Suitsupply, [Aritskina]. All of these are really exciting concepts that are relatively unique in the number of stores, and that’s going to separate our properties.”

Lot’s of new entrepreneurs opening concepts

“And I would just say this, Michael, what’s exciting – yes, we have had bankruptcies this year, it does take time to replace them. But the amount of new concepts and new entrepreneurs coming into our environment, whether it’s restaurants, the e-commerce going to physical brand expansion is really at a – is that high and our leasing folks…So I mean in that sense it’s comforting to see that there is whole host of new entrepreneurs they want to be in our own environments.”

Retailers have barbelled

“look would you say generally there is obviously the whole movement towards value on one hand and luxury on the other continues. The general – the good news about that is we’re positioned in both of those barbells extremely well. But that’s not to say people lose sight of that, that’s not to say the middle American mall isn’t doing well.”

Malls still serve their purpose

“it’s ignored from a media point of view, there’s assumptions made about those assets, there is extrapolation because one mall went out of business that all malls are going out of business. But I would say to you that the solid middle malls throughout America continue to do well, serve their purpose.”

These new retailers are much more sophisticated than the entrepreneurs we dealt with 10 years ago

“One comment I would make to you on the new retailers we are dealing with is that they are substantially more sophisticated than the crop of new retailers we dealt with say 10 years ago, better financed, much more focused on their niche and it’s been much easier to deal this new crop of entrepreneurs than might have been the case.”