Simon Property Group Sees Retailers Racing to Renew Leases

Retailers are increasingly seeking to renew mall leases as much as three years before expiration, Simon Property Group CEO, President and Chief Operating Officer Eli Simon said Monday (May 11) during the company’s first-quarter earnings call. Simon said retailers are now discussing lease expirations in 2027, 2028 and 2029—an approach he noted has historically been more common among luxury tenants, but is now emerging among legacy, non-luxury retailers as well.

Earlier lease conversations and tenant demand

Simon said leasing teams are hearing from retailers that want to begin conversations about future expirations earlier than in the past. He attributed the shift to retailers thinking in longer time horizons, adding that the company is seeing interest from legacy retailers in its existing portfolio.

First-quarter operating and leasing metrics

According to a Monday earnings release, as of March 31, Simon Property Group reported year-over-year increases in its U.S. malls and premium outlets operating statistics. Over the year:

• Occupancy rose 10 basis points to 96%.
• Base minimum rent per square foot increased 5.2% to $61.99.
• Reported retailer sales per square foot rose 11.8% to $819.

U.S. malls and premium outlets accounted for 77.1% of Simon Property Group’s net operating income during the first quarter, based on a supplemental presentation released Monday.

Leasing activity and 2026 expirations

Simon said the company signed more than 1,100 leases totaling over 4.7 million square feet in the first quarter, with about 25% of leasing volume coming from new deals. He also said Simon has completed more than 75% of its 2026 expirations, placing the company ahead of last year’s pace, and that the pipeline of deals is “significantly larger” than it was at this time last year.

Cash flow drivers and outlook for tenant demand

Simon said occupancy gains, increased shopper traffic and higher retailer sales drove strong cash flow growth in the quarter. He also characterized tenant demand as broad-based, spanning new and legacy retailers across a wide range of categories in all of the company’s platforms and geographies.