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Mall REITs Holding Up

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Simon Property Group was the first regional mall REIT to report fourth quarter results. (It's having its conference call at 11:00 and you can listen in via Webcast here).

The firm's results are very strong. Funds from operations for the fourth quarter were $1.76 on a per diluted share basis, up 12.7 percent and $5.90 per diluted share for the full year, up 10.1 percent.

And here are some other interesting stats from its portfolio.

Metric As of Dec. 31, 2007 As of Dec. 31, 2006 Change
Mall Occupancy 93.5% 93.2% +30 basis points
Premium Outlets Occupancy 99.7% 99.4% +30 basis points
Community/Lifestyle Centers Occupancy 94.1% 93.2% +90 basis points
Mall Sales per Sq. Ft. $491 $476 +3.2%
Premium Outlets Sales $504 $471 +7.0%
Mall Rent per Sq. Ft. $37.09 $35.38 +4.8%
Premium Outlet Centers $25.67 $24.23 +5.9%
Community/Lifestyle Centers $12.43 $11.82 +5.2%

For 2008, the company is providing guidance of full year FFO of $6.25 to $6.45 per share. It is projecting occupancies will be down slightly to where they are now, but is projecting it will be able to raise rents. Its projected releasing spreads are 15% to 25% on its mall portfolio, 25% to 35% on its Premium Outlet Centers and 5% to 15% on its Community and Lifestyle Centers.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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