Simon Property Group

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Simon Property Group, Inc.
Type Public
Traded as
Industry Real estate investment trusts
Genre
Founded 1993
Founder(s)
Headquarters Indianapolis, Indiana, U.S.
Number of locations
  • United States
  • Canada
  • Japan
  • Brazil
  • Mexico
  • South Korea
  • Puerto Rico
Key people
Revenue Increase USD$ 4.30 billion (2011)
Net income Increase USD$ 1.02 billion (2011)
Total assets Increase USD$ 26.21 billion (2011)
Employees 5,000+ (2010)[1]
Subsidiaries
  • Premium Outlets
  • Kravco Simon (80%)
Website simon.com

Simon Property Group, Inc. is an American commercial real estate company, ranked #1 in the United States as the largest real estate investment trust. 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 more than 325[2] properties comprising approximately 241,000,000 square feet (22,400,000 m2) of gross leasable area in North America and Asia. The company is headquartered in Indianapolis, Indiana and employs more than 5,000 people worldwide. It is publicly traded on the NYSE under the symbol SPG and is part of the S&P 100.[3]

Simon Property Group has been the subject of several lawsuits and investigations regarding civil rights and discrimination.[4][5][6][7]

History[edit]

Simon Property Group was formed in 1993[8] 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 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.[9] 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 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 in Houston, Texas and SouthPark Mall in Charlotte, North Carolina); several high-profile properties such as Dadeland Mall, Fashion Valley Mall, Copley Place, Fashion Centre at Pentagon City, and Stanford Shopping Center; and in 2004, Chelsea Premium Outlets (now simply named "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.[10]

In June 2011, Simon Property Group entered into a partnership with Nintendo to provide complimentary 3DS Wi-Fi hotspots at nearly 200 of its malls.[11]

Simon Property Group logo, in use until May, 2014

In October 2012, Simon announced to construct a 400,000 sq. ft. outlet mall in Charlotte, North Carolina, just days after NC based Tanger Outlet Centers announced it would also build an outlet mall in Charlotte. Simon currently has two Charlotte properties (SouthPark Mall and Concord Mills), SouthPark is one of the highest performing within the company. The center is expected to open in 2013. However, in late November 2012 Simon and Tanger announced it would join ventures to construct one outlet mall in Charlotte to lessen the competition between the planned two malls, less than 22 miles apart from each other. The new mall will be called Charlotte Premium Outlets, and will contain around 90 upscale stores, 350,000 sq ft with possible expansion to 400,000 sq ft. Another, smaller outlet mall will be built in Columbus, Ohio.

In December 2013, Simon announce it would form a REIT of its smaller malls and new publicly traded trust will be called SpinCo.[12]

Recent acquisition offers[edit]

General Growth Properties[edit]

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.[13] Simon hired property investment firm Cohen & Steers, J.P. Morgan, 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.[14] 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.[15] The General Growth board favored an investment offer from Brookfield Asset Management worth $2.6 billion.

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.[16] 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.[17]

On May 7, 2010, Simon Property Group decided to withdraw its acquisition and recapitalization proposals for General Growth Properties.[18]

Prime Outlets[edit]

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 St. Augustine Florida where Simon's Premium Outlet mall is 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.[19]

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.[20] The acquired properties received Premium Outlet branding just after the completion of the deal. The developments at Grand Prairie, Texas and Livermore Valley, California were acquired in 2012 just months after their openings and were rebranded as "Premium Outlets."

Capital Shopping Centres[edit]

At the end of 2010 Simon Property Group attempted to acquire UK based retail investment group Capital Shopping Centres (CSCG), after CSCG agreed a deal with Peel Group to acquire the Trafford Centre.[21] This offer was later declined by Capital Shopping Centres shareholders in an EGM, with their Shareholders, many of whom are South African, voting instead for the deal with the Peel Group.[22]

Premium Outlets expansion into Canada[edit]

On August 1, 2013, Toronto Premium Outlets opened in Halton Hills, Ontario, Canada.[23][24] Premium Outlets Montreal, which will be the second Premium Outlet Center located in Canada is scheduled to open in late 2014.[25]

References[edit]

  1. ^ "Simon Property Group, Inc.". Hoovers.com. 2010-10-21. Retrieved 2011-12-17. 
  2. ^ "SIMON | Investor Relations | Corporate Overview". Investors.simon.com. Retrieved 2013-11-05. 
  3. ^ News, Yahoo!. "Simon Property Group Reports First Quarter Results". Yahoo! Finance. Retrieved 3 May 2012. 
  4. ^ http://www.elpasotimes.com/ci_12940131
  5. ^ http://www.eeoc.gov/eeoc/newsroom/release/11-8-11c.cfm
  6. ^ http://www.mercurynews.com/ci_17467369
  7. ^ http://www.lasvegassun.com/news/2009/mar/12/poetry-nightclub-discrimination-lawsuit-moves-forw/
  8. ^ "Company Milestones". Simon.com. Retrieved 2013-11-05. 
  9. ^ Kumer, Ken (1996-03-27). "SIMON, DEBARTOLO MALL PROPERTY GROUPS JOIN FORCES". djc.com. Seattle Daily Journal and djc.com. Retrieved 2007-10-08. 
  10. ^ 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, completed the acquisition of The Mills Corporation."
  11. ^ Frank Cifaldi,Gamasutra. "New Partnership Pushes 3DS Wi-Fi Hotspots Over 25K." June 2, 2011. Retrieved June 3, 2011.
  12. ^ Karr, Arnold J. (13 December 2013). "Simon Plans Spin-off of Smaller Properties". WWD. Retrieved 13 December 2013. 
  13. ^ Sender, Henny (2009-11-19). "Simon eyes General Growth’s mall portfolio". Ft.com. Retrieved 2011-12-17. 
  14. ^ "Simon Property Group Bids $10B For General Growth Properties". Mortgageorb.com. Retrieved 2011-12-17. 
  15. ^ "General Growth Board Sued for Rejecting Simon Bid (Update1)". Businessweek.com. Retrieved 2011-12-17. 
  16. ^ "Simon Property Group Offers to Invest $2.5 Billion in General Growth Reorganization Plan at Same Per Share Price as Existing Brookfield-Sponsored Proposal". Phx.corporate-ir.net. 2010-04-14. Retrieved 2011-12-17. 
  17. ^ Jonas, Ilaina (2010-04-14). "Simon still interested in buying General Growth: source". Reuters.com. Retrieved 2011-12-17. 
  18. ^ "SIMON | Investor Relations | Press Release". Phx.corporate-ir.net. 2010-05-07. Retrieved 2011-12-17. 
  19. ^ "SIMON | Investor Relations | Press Release". Phx.corporate-ir.net. 2009-06-30. Retrieved 2011-12-17. 
  20. ^ "Simon Malls | More Choices . - Press Room - Press Release". Phx.corporate-ir.net. 2010-08-30. Retrieved 2011-12-17. 
  21. ^ PropertyMall.com http://www.propertymall.com/press/article/24001
  22. ^ PropertyMall http://www.propertymall.com/press/article/24347
  23. ^ Shum, David (2013-08-01). "Toronto Premium Outlets open in Halton Hills - Toronto". Globalnews.ca. Retrieved 2013-08-19. 
  24. ^ Posted: 04/10/2012 11:28 am Updated: 04/25/2012 4:13 pm (2012-04-25). "Toronto Outlet Mall To Be First Upscale Centre Of Its Kind In Canada". Huffingtonpost.ca. Retrieved 2013-08-19. 
  25. ^ "Simon Property Group, SmartCentres and Calloway REIT Break Ground on Premium Outlets' Montreal". Finanznachrichten.de. Retrieved 2013-11-05. 

External links[edit]