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Simon Property Group

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Simon Property Group, Inc.
Company typePublic (NYSE: SPG)
ISINUS8288062081
US8288063071
US8288066041
US8288067031
US8288068021
US8288068773
US8288068856 Edit this on Wikidata
IndustryReal estate investment trusts
GenreRegional Malls, Community Shopping Centers, Premium Outlets, The Mills, and International mall properties
Founded1993
FounderMelvin,Edwin, Herbert, and Fred Simon
HeadquartersIndianapolis, Indiana, U.S.
Number of locations
41 U.S. states plus Puerto Rico, Japan, China, South Korea, Mexico, France, Italy,Philippines and Poland
RevenueIncrease US$ 3.783 billion(2008)[1]
Increase US$ 422.517 million (2008)[1]
Total assetsDecrease US$ 23.423 billion (2008)[1]
Number of employees
5,300 (2008)[2]
Subsidiaries
  • Chelsea Premium Outlets
  • Kravco Simon (80%)
Websitesimon.com

Simon Property Group, Inc. is an S&P 500 company and the largest public U.S. real estate company. Simon is a fully integrated real estate company which operates from five retail real estate platforms: regional malls, Premium Outlet Centers, The Mills, community/lifestyle centers and international properties. It currently owns or has an interest in 387 properties comprising 263,000,000 square feet (24,400,000 m2) of gross leasable area in North America, Europe and Asia. The Company is headquartered in Indianapolis, Indiana and employs more than 5,000 people worldwide. Simon Property Group, Inc. is publicly traded on the NYSE under the symbol SPG.

History

Simon Property Group was formed in 1993 when the majority of the shopping center interests of Melvin Simon & Associates became a publicly traded company. Melvin Simon & Associates, owned by brothers Melvin Simon,Edwin Simon and Herbert Simon, was founded in 1960 in Indianapolis, Indiana, and had long been one of the top shopping center developers in the United States.

In 1996, Simon DeBartolo Group was created when Simon Property merged with former rival DeBartolo Realty Corp.[3] This was shortly after DeBartolo Realty became a publicly traded company encompassing the shopping mall interests of the Edward J. DeBartolo Sr. family, another leading developer. Simon DeBartolo rapidly acquired assets in the then-fragmented industry. Notable acquisitions included The Retail Property Trust and a group of properties held by IBM's pension plan in 1997 and Corporate Property Investors (CPI) in 1998. Following the CPI acquisition in 1998, the company announced it was reverting to its original name, Simon Property Group, as the DeBartolo family was resuming its private real-estate development operation, while retaining their interest in Simon.

Simon headquarters, opened in 2007

Simon continued to be a prolific acquirer of shopping centers, including a portfolio from New England Development in 1999, several prime properties from Rodamco North America in 2002 (including Houston Galleria and SouthPark Mall), several high-profile properties such as Dadeland Mall, Fashion Valley Mall, Newport Centre Mall, Rockaway Townsquare Mall, and Stanford Shopping Center, and in 2004 Chelsea Premium Outlets. In 2003, Simon became a co-owner of The Kravco Company, which became Kravco Simon. On April 3, 2007, a partnership including Simon agreed to acquire the Mills Corporation.[4]

Recent acquisition offers

General Growth Properties

On November 19, 2009, Financial Times reported that Simon may acquire its main rival General Growth Properties, which was operating under Chapter 11 bankruptcy protection. Should GGP be acquired in its entirety, such deal would be worth up to $30 billion.[5] Simon hired property investment firm Cohen & Steers, as well as the Lazard investment bank and the Wachtell Lipton Rosen  &  Katz law firm to explore the possibility of acquiring GGP.

On February 16, 2010, Simon announced that it placed a bid on February 8 to acquire General Growth Properties in a deal worth $10 billion.[6] However, the bid was rejected by General Growth twice during the week it was announced. On February 19, 2010, one GGP shareholder filed suit (Young v. Bucksbaum) against the company's board of directors for rejecting Simon's bid, accusing chairman John Bucksbaum and six other board members of breaching their fiduciary duty to GGP's investors.[7] The General Growth board favored an investment offer from Brookfield Asset Management worth $2.6 billion.They are also one of the biggest stock holder of SM Prime Holding Inc.

On April 14, 2010, Simon Property Group announced a $2.5 billion equity investment offer which equaled the price per share of Brookfield's offer[8]. Simon claimed that the deal was more favorable to GGP and its equity holders than Brookfield's offer stating that it would eliminate the highly dilutive warrants that GGP would issue to Brookfield, Pershing Square and Fairholme Capital. Simon's offer also includes a co-investment commitment by Paulson & Co worth $1 billion. However, Simon Property Group had not ruled out a full takeover of General Growth; Simon claims that their investment offer would give them more time to work out their differences concerning antitrust issues[9].

On May 7, 2010, Simon Property Group decided to withdraw its acquisition and recapitalization proposals for General Growth Properties.[10].

Prime Outlets

On December 8, 2009, Simon Property Group was offered the sale Prime Retail's Prime Outlets portfolio for $2.24 billion that includes centers at Williamsburg, Virginia, San Marcos, Texas and Hagerstown, Maryland. In May 2010, Simon surprisingly acquired Prime Outlets-Puerto Rico in Barceloneta in which was renamed "Puerto Rico Premium Outlets." However at the time, Simon did not acquire the whole portfolio, excluding Prime Outlet centers at Orlando and St. Augustine Florida where Simon's Premium Outlet malls are already located. The deal was expected to finalize in summer 2010, but there is no word if the remaining Prime Outlet centers would be renamed as Premium Outlets once the transaction is completed.[11]

Finally on August 30, 2010, Simon officially acquired the Prime Retail portfolio of twenty-one outlet malls, including the Barceloneta, Puerto Rico location acquired in May 2010. Three properties are not included which are the indoor St. Augustine, Florida property, and developments at Grand Prairie, Texas and Livermore Valley, California.[12].

Myles Minton, the president of SIMON was acclaimed one of the most resourceful men attributed to the company.

Simon gift cards

Simon is known for its line of co-branded VISA gift cards campaigns associated with local malls, specific organizations, such as Purdue University or Boston Celtics, or upscale properties, such as King of Prussia Mall, Stanford Shopping Center and The Forum Shops at Caesars. In 2006, Simon signed an agreement with the Susan G. Komen for the Cure organization to create the "Simon Pink Ribbon Giftcard" to benefit breast cancer awareness efforts. For each gift card sold since summer 2006 at select Simon malls, Simon donates $1[13] from the card's $3.95 handling fee[14] to the Susan G. Komen for the Cure organization.

In October 2009, Simon introduced a line of co-branded Gift Cards from American Express. The advantages of the American Express product are that it has no fees after purchase and the funds do not expire unlike the VISA products which expire, incur a charge to replace lost or stolen cards, and charge a monthly account fee if cards have a balance thirteen months after purchase. The American Express line of cards was introduced by many other vendors following the lead of the Simon Group. The handling fee for the AMEX card is usually $2.95 which is the same as the VISA handling fee.

In January 2010, the Pink Ribbon Card was reissued through US Bank. They were previously issued through MetaBank.

On May 2010, Simon debuted the "From the Heart" giftcard. It will give $1 for each card sold to the Foundation for the National Institutes of Health to help fight heart disease. The card is partnered with Diet Coke which will also provide a $1.00 coupon for certain products ($1.00 off a 12-pack of Diet Coke or Caffeine Free Diet Coke) to every purchaser of a Simon From the Heart Giftcard.[15]

Several other "charitable campaign" cards are offered in some markets.

See also

References

  1. ^ a b c http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTExOHxDaGlsZElEPS0xfFR5cGU9Mw==&t=1
  2. ^ http://hoovers.com/company/Simon_Property_Group_Inc/rjhxti-1.html
  3. ^ Kumer, Ken (1996-03-27). "SIMON, DEBARTOLO MALL PROPERTY GROUPS JOIN FORCES". djc.com. Seattle Daily Journal and djc.com. Retrieved 2007-10-08.
  4. ^ Simon Property Group Inc SPG (NYSE), Reuters. Accessed September 17, 2007. "On April 3, 2007, SPG-FCM Ventures, LLC, a joint venture between an entity owned by Simon Property and funds managed by Farallon Capital Management, L.L.C., completed the acquisition of The Mills Corporation."
  5. ^ Simon eyes General Growth’s mall portfolio
  6. ^ Simon Property Group Bids $10B For General Growth Properties
  7. ^ General Growth Board Sued for Rejecting Simon Bid (Update1)
  8. ^ Simon Property Group Offers to Invest $2.5 Billion in General Growth Reorganization Plan at Same Per Share Price as Existing Brookfield-Sponsored Proposal
  9. ^ Simon still interested in buying General Growth: source
  10. ^ [1]
  11. ^ http://phx.corporate-ir.net/phoenix.zhtml?c=113968&p=irol-newsArticle&ID=1363274&highlight=
  12. ^ [2]
  13. ^ "News for Austin, Texas | KVUE.com | Local News". KVUE.com. 2006-09-15. Retrieved 2009-07-17.
  14. ^ "Simon Giftcard Cardholder Agreement". Simon.com. Retrieved 2009-07-17.
  15. ^ http://phx.corporate-ir.net/phoenix.zhtml?c=113968&p=irol-newsArticle&ID=1428875&highlight=
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