Simon Property Group wowed Wall Street with its 2002 earnings announcement yesterday. The Indianapolis-based REIT reported an 8 percent increase in funds from operations (FFO) per share, driven by its $1.6 billion acquisition of Rodamco North America properties, a lower interest rate environment and higher rent renewals on expiring leases.

Simon reported a fourth-quarter 2002 occupancy increase of 80 basis point to 92.7 percent over fourth quarter 2001. The REIT’s comparable store sales per square foot increased 2 percent to $391 per square foot, compared to $383 at Dec. 31, 2001. The average initial base rent for new mall store leases climbed 24.3 percent to $40.05 per square foot over the tenants that closed or had leases expire. "This performance demonstrates the company’s room to drive occupancy costs up," says Legg Mason analyst David Fick in his report on the earnings announcement. "Demand for Simon’s mall space continues to remain at a very high level."