Q3 2026 SIMON PROPERTY GROUP, INC. EARNINGS CONFERENCE CALL - SIMON PROPERTY GROUP INC

Explicit Guidance:

• Raised full-year 2026 Real Estate FFO guidance to $13.30–$14.40 per share (up $0.10 from prior range); midpoint implies ~5% growth vs. $12.73 in 2025.
• Announced Q4 2026 dividend of $2.30 per share, representing a 4.5% increase ($0.10) year-over-year; payable December 31, 2026 to record-date shareholders.
• Management expects interest expense headwinds in 2027 to remain in the $0.30 per share range, though precise figures are volatile pending rate movements.
• No specific guidance provided for 2027 sales or specific buyback amounts beyond completion of the remaining Taubman offset (approx. 450,000 shares).

Business-Segment Outlook:

• Leasing: Pipeline of prospective deals is "well ahead" of the prior year; initial base minimum rent on new deals up 17% YoY, while tenant allowances down 10%.
• Sales: Operable sales grew 4.9% in Q3 and 5% over the trailing twelve months; two-year sales stack growth is 7.2%, accelerating 80 bps vs. Q2.
• Restaurants: Recorded best quarter in three years with notable growth; traffic and sales broad-based across platforms (Malls, Premium Outlets, Mills).
• Development: $1.2B development pipeline underway (blended yield 9%); total pipeline value (including approved projects) estimated at $1.4B, with an additional $4B "shadow pipeline" behind it.
• Re-merchandising: Ongoing strategy to add higher-rent tenants (e.g., new deals at $78/sf vs. $65/sf last year) rather than stopping at 100% occupancy; target is continuous NOI growth via tenant mix optimization.
• Ancillary Revenue: Expanding "Simon Media Network" and digital capabilities to drive footfall and monetize data for non-retail sectors (travel, financial services, hospitality).

Market and Competitive Outlook:

• Demand: Leasing demand described as "widespread" across national/international brands, emerging concepts, geographies, and product types; pipeline up 30% YoY.
• Tenant Strategy: National retailers increasing physical footprint to control brand presence and direct distribution; e-commerce brands requiring physical stores for success.
• Luxury: Robust luxury business; actively expanding footprints for luxury brands (including conversations with luxury retailers potentially moving to non-traditional locations) across the portfolio.
• Tourism: Florida markets (Miami, Tampa, Orlando) remain "incredibly strong"; Vegas showing real growth post-lull; Canadian and Mexican border assets growing (though slightly below portfolio average); Woodbury (US-Canada) growing but slower than other tourist assets.
• Platforms: Performance consistent across Malls, Premium Outlets, and Mills; Malls slightly outperformed Outlets driven by specific high-growth categories (luxury watches) present only in malls.

Macro / Industry Outlook:

• Interest Rates: Acknowledges rate fluctuations impact cost of capital but maintains development pipeline is viable due to strong tenant demand and high pre-leasing levels; building for 9% returns with 300 bps spread over current rates.
• Inflation/Inputs: No specific inflation data provided; management emphasizes disciplined capital allocation regardless of rate environment (high or low).
• Regulation/Economy: No specific regulatory or macro-economic warnings cited other than general interest rate volatility affecting refinancing.

Strategic Initiatives:

• Acquisitions: Agreed to acquire University Village in Seattle (premier open-air destination); expected to close Q4 2026, modestly accretive next year, NAV accretive day one.
• Development: Groundbreaking on Sagefield (Nashville area) next week; opening expected by end of 2028; 100 acres, 80+ retail shops, mixed-use.
• Expansion: Expanding outlet in Florence, Italy; developing multifamily/retail at Phillips Place; adding 80+ new tenants at Southdale transformation.
• Branding: Launched "It's a Simon Thing" global campaign to unify centers under one brand; expected to build engagement through the 2026 holiday season.
• Capital Allocation: Commitment to "steady cadence" of share repurchases post-Taumaban offset to maintain leverage under 5.0x; utilizing free cash flow to buy back stock at attractive prices while funding $4B+ pipeline.
• Debt Management: Expecting to use a "barbell approach" for 2027 maturities (front-end commercial paper + 5/10/30-year unsecured notes); potential to repay secured debt with unsecured borrowings to optimize cost; exploring international funding (Europe, Japan) for hedging/cost advantages.

Risks and Headwinds to Outlook:

• Interest Expense: Higher net interest expense remains a near-term headwind (~$0.30/share in 2027), subject to market volatility.
• Sales Visibility: 2027 sales guidance difficult to forecast until 2026 holiday season (peak months) results are realized.
• Acquisition Conditions: University Village closing subject to "customary closing conditions."
• General Risks: Standard "safe harbor" risks regarding uncertainty of actual results vs. forward-looking statements (detailed in SEC filings).

Management Tone on the Future:

• Confidence: Highly confident and optimistic; describes business as a "powerful machine" and "exciting opportunities."
• Discipline: Emphasizes extreme discipline on capital deployment (no "buying for buying's sake"), focusing on tenant demand and 9%+ yields before considering interest rate fluctuations.
• Growth Strategy: Shift from pure M&A to internal growth (development, re-merchandising, buybacks) while remaining opportunistic on high-quality assets; views development pipeline as a primary driver of future EBITDA.
• Long-term View: Focus on owning assets "forever" and building value through cash flow growth rather than short-term cap rate compression or flipping.

Miscellaneous:

• Portfolio Occupancy: Malls and Premium Outlets at 96.5% (highest combined since 2016); Mills at 98.9%.
• Financial Strength: Ended quarter with ~$9B liquidity; Net debt to EBITDA at 5.0x; Free cash flow generation up >7.5% YoY.
• Yields: Blended yield on development projects underway is 9%; Sagefield expected to achieve similar yields; Brea and Southdale transformational projects comping at 10-12%.
• International: No aggressive expansion plan internationally, but open to opportunistic expansions in Japan, Malaysia, and Korea if value is present.