Simon Property Group - Q4 2025
February 2, 2026
Transcript
Operator (participant)
Greetings! Welcome to Simon Property Group's fourth quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and the number zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to Tom Ward, Senior Vice President of Investor Relations. Thank you. You may begin.
Tom Ward (SVP of Investor Relations)
Thank you, Vaughn, and thank you all for joining us this evening. Presenting on today's call are David Simon, Chairman, Chief Executive Officer, and President, Eli Simon, Chief Operating Officer, and Brian McDade, Chief Financial Officer. A quick reminder that statements made during this call may be deemed forward-looking statements within the meaning of the Safe Harbor of the Private Securities Litigation Reform Act of 1995, and actual results may differ materially due to a variety of risks, uncertainties, and other factors. We refer you to today's press release and our SEC filings for a detailed discussion of the risk factors relating to those forward-looking statements. Please note that this call includes information that may be accurate only as of today's date. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included within the press release and the supplemental information in today's Form 8-K filing.
Both the press release and the supplemental information are available on our IR website at investors.simon.com. Our conference call this evening will be limited to one hour. For those who'd like to participate in the question and answer session, we ask that you please respect our request to limit yourself to one question. I am pleased to introduce David Simon.
David Simon (Chairman, CEO and President)
Good evening. We delivered strong financial and operational results in the fourth quarter, capping another impressive year for our company. We achieved excellent leasing performance, acquired $2 billion of high-quality retail properties, completed more than 20 major redevelopment projects, and opened a new premium outlet in Indonesia. We reported record real estate funds from operations of $4.8 billion, or $12.73 per share. Our results reflect solid fundamentals, strong occupancy, accelerating shopper traffic growth, healthy and growing retail sales, positive supply and demand dynamics, all driving improvement in our cash flow. We returned approximately $3.5 billion in cash to our shareholders through common stock repurchases and record cash dividends. In our yearly tally, we have now paid approximately $48 billion in cash to shareholders in dividends over our history as a public company.
With that, I'm now going to turn it over to Eli, who will discuss our leasing and investment activities, and then Brian will cover our fourth quarter results and our outlook for next year in more detail.
Eli Simon (COO)
Thank you. During 2025, we acquired The Mall, two well-known luxury outlet centers in Italy. Our partners' interest in Brickell City Centre, a premier mixed-use property in Miami's rapidly growing central business district, the remaining 12% interest in Taubman Realty Group we did not previously own, and Phillips Place, a high-productivity, open-air retail center in Charlotte, a market we know well, with significant upside from remerchandising and densification. These deals enhance the quality of our portfolio, and we look forward to deploying our leasing and property management expertise, along with our strong balance sheet, to pursue new growth and value creation opportunities across these properties. Retailer demand remains strong across our portfolio. We signed more than 1,300 leases, totaling over 4.4 million sq ft during the quarter and over 4,600 leases for more than 17 million sq ft for the year.
Approximately 30% of our annual volume was new deals, reflecting continued strong demand across our portfolio. Now, turning to development. We completed more than 20 significant redevelopment projects in 2025, including retail and experiential additions at Southdale Center, Stanford Shopping Center, King of Prussia, and the Forum Shops at Caesars, and mixed-use additions, including hotel and residential at Northgate Station and Lakeline Mall, respectively. In 2026, notable retail and mixed-use projects scheduled to come online include Brea Mall, Northgate Station first phase of residential, an open-air expansion with restaurants and retail at The Shops at Mission Viejo, Briarwood Mall, with the new Harvest Market, Dick's Sporting Goods, and residential, and at Tacoma Mall, new village shops and restaurants. We also expect to begin construction on exciting new projects, including anchor redevelopments at The Fashion Mall at Keystone and Town Center at Boca Raton.
Toronto Premium Outlets, Desert Hills Premium Outlets, and Woodbury Common Premium Outlets are progressing, and Sagefield, our new open-air retail and mixed-use development in Nashville. We also plan to enhance the merchandise mix and invest in meaningful capital upgrades at former TRG assets, including The Mall at Green Hills, International Plaza, and Cherry Creek Shopping Center. At year-end, our share of the net cost of developments across all platforms totaled approximately $1.5 billion, with a blended yield of 9%. Approximately 45% of net costs are from mixed-use projects. Our pipeline of new development and redevelopment opportunities continues to grow and now exceeds $4 billion. I will now turn it over to Brian, who will walk through our fourth quarter results.
Brian McDade (CFO)
Thank you, Eli. Real estate FFO was $3.49 per share in the fourth quarter, compared to $3.35 in the prior year, 4.2% growth. Domestic and international operations both performed well, contributing $0.26 of growth, driven by higher lease income across the business. As anticipated, lower interest income and higher interest expense combined were a $0.07 drag in the quarter. Domestic property NOI growth was strong and increased 4.8% year-over-year for the quarter and 4.4% for the year. Portfolio NOI, which includes our international properties at constant currency, grew 5.1% for the quarter and 4.7% for the year. Malls and premium outlets ended the year at 96.4% occupancy, and the mills ended at 99.2%.
The addition of the TRG assets reduced occupancy by 20 basis points for malls and premium outlets and 30 basis points for the mills. We expect to drive higher occupancy at these assets as we execute on our leasing strategy. Average base minimum rents increased 4.7% year-over-year for the malls and the premium outlets. The TRG properties contributed approximately 250 basis points to this growth. Retailer sales per square foot for the malls and the premium outlets were $799 per sq ft for the year. The SPG-only portfolio was up 2% year-over-year. Importantly, total sales volumes grew approximately 4% in the important fourth quarter and 3% for the full year. Occupancy cost at the end of the year was 12.7%.
Turning to the balance sheet, during 2025, we completed approximately $9 billion in financing activities, including a dual tranche US senior notes offering that totaled $1.5 billion at a combined average term of 7.8 years and a weighted average coupon rate of 1.77%. We also completed $7 billion of secured loan refinancing and extensions in the year. Subsequent to year-end, we completed an $800 million offering of 5-year notes at a spread of 65 basis points for 5-year treasury. We used the proceeds to repay $800 million of notes that matured on January 15, 2026. Our A-rated balance sheet provides a distinct, distinct advantage with more than $9 billion of liquidity at year-end and a net debt to EBITDA measure of 5.0x.
During 2025, we paid more than $3.2 billion in common stock dividends and repurchased over 1.2 million shares for approximately $227 million. Subsequent to year-end, we repurchased an additional 273,000 shares for $50 million. And today, we announced our dividend of $2.20 per share for the first quarter, a year-over-year increase of $0.10 or 4.8%. The dividend is payable on March 31. Turning to our 2026 guidance, we expect real estate FFO of $13-$13.25 per share, with a midpoint of $13.13.
The guidance range assumes domestic property NOI growth of at least 3% and a higher net interest expense of $0.25-$0.30 per share versus 2025, reflecting current market interest rate conditions. Thank you. We will now open it up for questions.
Operator (participant)
Thank you. We will now be conducting a question-and-answer session. As a reminder, we ask that you please limit yourselves to one question. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Caitlin Burrows with Goldman Sachs. You may proceed with your question.
Caitlin Burrows (Equity Research Analyst)
Hi, everyone. Good evening. Maybe on the leasing side, you mentioned that 30% of lease signings last year were on new leases. So could you give some detail on what rents you're getting on new leases and renewal leases, and how your pipeline today and depth of demand compares to a year ago, I guess, while keeping in mind the TRG deal and now the portfolio is larger?
Brian McDade (CFO)
Hi, Caitlin, this is Brian. Look, I think what we would say is that it's, you know, certainly 30% is a good run rate for new leasing. You know, we disclosed the new rents on our leases, which are approximately $65 per sq ft. We would expect that to continue into 2026.
David Simon (Chairman, CEO and President)
And then just from the pipeline perspective, you know, year to date, our pipeline is up about 15% over last year, and that's really broad-based across all categories. So, you know, no change in tenant demand. If anything, it's increasing. Thanks.
Operator (participant)
Our next question comes from Samir Khanal with Bank of America. You may proceed with your question.
Samir Khanal (Managing Director and Senior Equity Research Analyst)
Good evening, everybody. I guess, David or Eli, you know, going back to November, you launched the Simon Plus loyalty program. Just, is there any early observations you can share about the program? I mean, as you know, as it relates to maybe the impact on traffic or retailer sales, maybe Eli, anything would be helpful from that end. Thanks.
David Simon (Chairman, CEO and President)
Yeah, sure. So it's obviously early days, but we've been very pleased with the adoption from both a customer perspective, but also getting brand excited about it. So we're still in the membership acquisition phase, increasing engagement, you know, we had a great holiday activation. They got a lot of organic buzz, you know, which was exciting and I think helped increase traffic a bit. So as we go into 2026, it's more of the same, continue to focus on getting new rewards, new retailers, and then also partnering with other loyalty programs that are outside of our space as well, working on launching that in the beginning part of this year. So again, early days, but we are very pleased with where we are so far.
Operator (participant)
The next question comes from the line of Michael Griffin with Evercore ISI. Please proceed with your question.
Michael Corkery (Equity Research Analyst)
Great, thanks. Appreciate all the color so far. Just wondering if you can give some insights, maybe into your thoughts around, you know, tenant credit or, you know, bad debt as it looks at the year ahead. I know there's been some news recently around retailer bankruptcies, but just maybe give us a sense where your head is at from expectations from a tenant credit perspective. Is it, you know, better or worse, the same than last year? Anything about that would be helpful. Thank you.
David Simon (Chairman, CEO and President)
Sure. Yeah, look, I think the tariffs are clearly having an effect on retailers, so it is definitely putting more pressure on them. And it's not the big guys. I think I mentioned to you this on our last call. I mean, it's really, it's really—it's you put Costco and Walmart and, of course, Amazon aside, and then you have the rest of us, okay? And the rest of us are feeling the pinch. And so it's something that when we had our call last year, obviously, we weren't dealing with. Retailers dealt with it successfully this year, but it kind of, you know, the full impact will really be 2026, because it was implemented, you know, who knows, in April, I guess.
We're still waiting for the Supreme Court to rule, which could be a small victory for our clients, but no one really knows. I don't know what Polymarket, where the odds are. Actually, that'd be an interesting time. While we're warbling here, you can find out what Polymarket says about the Supreme Court. So, you know, they have to deal with it, and it's, you know, we see it from Catalyst point of view, and I mean, it's gonna take $200 million of EBITDA away from Catalyst to pay the government. I mean, if you cut through it all, because I think Catalyst, rightfully so, is very focused on doing the best they can not to pass it on to consumer. So it is a real issue.
And, you know, the retailers that we speak to are managing it the best they can. But, you know, it is a headwind, and long story short, it probably puts more pressure on retailers than should be, and it's gonna end up hurting the small guys. So we're a little more cautious. You know, we gave you our range, that was, you know, frankly, you know, we didn't, we didn't have some bankruptcies in there that surfaced at the beginning of 2026, that we felt comfortable enough with to keep the range. You know, we do our budgets. We finish basically at, you know, mid-December. So that budget was essentially fixed. We didn't back off it because what Eli mentioned to you, you know, the retail demand.
But they'll probably be a little bit more, and I would say most of it, you know, if I had to cut to the chase, is tariff pressure, which is unfortunate. I hope that-
Michael Corkery (Equity Research Analyst)
Thank you.
David Simon (Chairman, CEO and President)
answers your question.
Michael Corkery (Equity Research Analyst)
Yep, appreciate it.
David Simon (Chairman, CEO and President)
Thank you.
Operator (participant)
The next question comes from the line of Michael Goldsmith with UBS. You may proceed with your question.
Michael Goldsmith (Equity Research Analyst)
Good afternoon. Thanks a lot for taking my question. We heard a lot about investment and redevelopment from Eli, so maybe can you frame how much incremental NOI or FFO we should expect this year from projects stabilizing either late in 2025 or in 2026? Thanks.
Brian McDade (CFO)
Hi, Michael, it's Brian. I think you should expect about a $30 million contribution in 2026 from projects that are gonna be complete.
Michael Goldsmith (Equity Research Analyst)
Great. Thank you very much.
Operator (participant)
The next question comes from the line of Alexander Goldfarb with Piper Sandler. You may proceed with your question.
Alexander Goldfarb (Managing Director and Senior Equity Research Analyst)
Hey, good evening. Good evening out there. David-
David Simon (Chairman, CEO and President)
Polley Martin. Hold on.
Alexander Goldfarb (Managing Director and Senior Equity Research Analyst)
Hold on, Polly Martin.
David Simon (Chairman, CEO and President)
Says, 25%-32% in favor of policy surviving. Okay.
Alexander Goldfarb (Managing Director and Senior Equity Research Analyst)
If it does, it's gonna be an interesting opinion. David, just going to your point on the question on, you know, the guidance set in December, even though that was ahead of Saks and Eddie Bauer, but you still feel pretty good. You know, as you look at the business, you guys have, you know, there's, there's Simon Brand Ventures, there's parking revenue. I mean, there's all these other ancillary revenue sources. So is your view that as, you know, presumably the economy grows, all these other revenue levers that you guys have will, you know, kick in and be more than sufficient to offset whatever potential tariff disruption that you outlined? Or just how are you thinking about that?
Because on one hand, the tariff thing sounds like there's gonna be more ripple effects this year as the full year is felt, but at the same token, if, you know, presumably the economy accelerates, you guys have more revenue leverage that should come into play and help drive earnings up.
David Simon (Chairman, CEO and President)
Yeah, listen, I agree, you know, 1000% with your thesis. We are seeing. The most important thing is traffic's up, sales are up. The retailers that don't make it, even though I could sit here and blame tariff, you know, they're not highly productive retailers. And given that, you know, it's our view that we can replace it with more productive retailers at higher rents. And, you know, take what's going on at Saks as a simple example. We have, you know, a number of off-price stores, and it'll be like the Forever 21. Even though we don't have all of Forever 21 leased, we are already way ahead of the income for that, and we have upside of, you know, another 20, 30 boxes to lease.
So Saks OFF 5TH, you know, total was paying us around $18 million. You know, we think half the portfolio will pay us $30 million, and Eli Simon said that I remember the numbers, right? So, and then we'll. And those are deals that we feel highly confident on. And then we have the other boxes that we'll generate. So, you know, we're not, you know, we're not replacing, you know, we're replacing the, you know, OFF 5TH, and the Saks, the productivity and the rents are just so cheap that, you know, there, there's a tremendous amount of upside. And, you know, it takes time, right? But, and most of that will all be back-end weighted because your GOB sales, and it will be done, who knows, in the spring sometime, you know, we get the space back.
You know, maybe there's a few that we can get in the fourth quarter, but most of it'll show up in 2027. So the media sales, tenant demand, traffic, is all moving in the right direction. And I, like you, I mean, we're bullish on the economy. It's just, you know, that the tariffs are, you know, it's never gonna be all systems go. We still see it a little bit on the sales. We had a good bounce back on the border. The north border, Canadians are really pissed off, so they're not going anywhere in the US. So we're seeing kind of the north border a little weaker than the south border.
We also, interestingly, and I saw a little bit of sales disruption in certain markets where there were, you know, a lot of ICE activity, which was interesting. But again, tariffs are, you know, a headwind, but there's a lot of positive aspects of what's going on. And most importantly, we're making the properties better. You know, the Simon Plus, you know, we'll see some benefits, you know, in 2026. And, you know, the, you know, as an example, Alex, we just opened Chanel in Town Center at Boca Raton, off to a really good start. And, you know, that's, you know, to make that kind of, you know, with that kind of retailer, who's the best of the very best, you know, is just creates so much momentum, elsewhere.
So in that sense, you know, we're very bullish.
Alexander Goldfarb (Managing Director and Senior Equity Research Analyst)
Thank you.
David Simon (Chairman, CEO and President)
Sure.
Operator (participant)
The next question comes from the line of Craig Mailman, Citi. You may proceed with your question.
Craig Mailman (Managing Director and Senior Equity Research Analyst)
Hey, everyone. Just to follow up on the leasing. You know, the pace of leasing's been pretty consistent here and strong. I'm just kind of curious, the tenor of the conversations, maybe as you're talking to retailers and, you know, their demand and appetite to go into Class A, and what they're willing to pay for that, versus maybe what a same tenant or, you know, vertical, would be willing to pay for a space in Class B. Just kind of curious what the appetite looks like there, and the pricing for that.
David Simon (Chairman, CEO and President)
Yeah, well, we don't... I mean, pricing is, it's just so space, market, asset driven. It's a— there's, you know, hopefully AI will solve it for us, so we don't have to, you know, negotiate. It'll just say, "Here is the rent that the tenant and the landlord should agree on," and then we can, you know, I don't know what we do, but, you know, we can use that. So it, I can't really tell you. I mean, obviously, A assets have, you know, higher demand, but we're making a lot of progress in the Bs. And, you know, we don't really talk about pricing power.
We really talk about, you know, you can't force a deal, so it's, you know, the tenant has to agree, we have to agree, and, you know, it's a negotiation and, I would say, how many leases did we do last year, guys? 40. 4,600?
Craig Mailman (Managing Director and Senior Equity Research Analyst)
Forty-six hundred.
David Simon (Chairman, CEO and President)
No, no, no. Sq ft. 17 million. 17 million. So strangely enough, we figured out how to make deals on 17 million sq ft, okay? So it's, it's more of an art than a science. Maybe, maybe, AI can make it more of a science, but, you know, and, and again, it's not pricing power, it's just, you know, what's the right deal for both of us?
Craig Mailman (Managing Director and Senior Equity Research Analyst)
I mean, I guess, is it getting easier to lease Class B versus maybe 12 months ago? Any, any-
David Simon (Chairman, CEO and President)
Yeah, I think that's a safe statement. And again, you know, if you looked at Southdale mall a year or two years ago, you would say this was a C asset, okay? And now we've made it an A. So, you know, part of our job is to enhance the quality, and we're. We don't discriminate on what we're trying to achieve. What we're trying to achieve is. If it's in Midland, Texas, by the way, I hope you watch Landman, because that's in. For those who've been to Odessa and Midland, which of course I have been a few times, you know, you really get the feel for it.
But our job is to make Midland, Texas, which used to have a lot of volatility in the oil price, less so today. But to make that the best it can be, at the same time, trying to make Short Hills the best it can be. And that's one of the hallmarks of our company, in that we can do that, and it just takes a lot of focus, a lot of energy to do that. But it's at the same time, we can build an outlet like we did in, you know, Indonesia, right? I mean, very few companies can build in Indonesia and then build a new outlet in Oklahoma, okay? So, you know, that's just what we're about.
Craig Mailman (Managing Director and Senior Equity Research Analyst)
Great. Thank you.
Operator (participant)
The next question comes from the line of Greg McGinnis with Scotiabank. Please proceed with your question.
Greg McGinniss (Equity Research Analyst)
Hey, everyone. So normally, this question doesn't fall so deep into the question queue, but I think someone needs to ask. So Brian, how should we think about the factors that could drive Simon to the higher or lower end of the FFO per share guidance range, especially considering that you're already absorbing some additional unexpected bankruptcies versus the December budgeting process?
Brian McDade (CFO)
So, Greg, I think the way to think about it is very similar to how, you know, we run our business. We start the beginning of the year very conservatively and build throughout the year. I think we touched upon a variety of the potential inputs that would drive the outperformance. Certainly, our ancillary businesses, our leasing business, sales, you know, certainly we've done-
David Simon (Chairman, CEO and President)
I would just, sales to me could be, you know, significant upside. You know, we, as you probably know, we budget our sales flat-ish. And so if we get 3% growth, you know, I would hope to beat our estimates. And to me, yeah, we'll have bankruptcies, you know, we'll have, you know, tenants will be delayed, that kind of stuff. But, you know, if we get the tenant sales growth that we hope to get, you know, then we'll do better. And I would, I don't, you know, anticipate doing worse than our range.
Greg McGinniss (Equity Research Analyst)
Okay, thank you.
Brian McDade (CFO)
Thanks, Greg.
Operator (participant)
The next question comes from the line of Vince Tibone with Green Street. You may proceed with your question.
Vince Tibone (Senior Analyst)
Hi, good evening. I got one more on guidance. Can you just discuss the level of pro forma domestic property NOI guidance included in 2026 FFO? And then also, if you could just help quantify, you know, 2025 was a bigger acquisition year than, you know, the recent past. Like, how much did 2025 completed acquisitions, you know, benefit or contribute to domestic property NOI in 2026?
David Simon (Chairman, CEO and President)
We're projecting 3% comp NOI growth. You know, the deals, you know, Taubman really is a 2027 story because of, you know. You'll see an announcement from us tomorrow or the next day on some transformations of 3 properties that now that we've, you know, got our hands on. We also have the integration, which is a 2026 story. So it's, you know, we obviously issued the units, as well, and we haven't quarterized that, which is our intent. People made fun of that name, but that's a legit use of the word. So, so we really haven't done much of that yet, and we'll be prudent about that. That's not really in the guidance. So, and the other deals, you know, helped a few cents, but they're, they're all early days.
Vince Tibone (Senior Analyst)
No, that, that's really helpful, Carl.
David Simon (Chairman, CEO and President)
A couple were pretty small, but you know, all over time will contribute to our growth.
Vince Tibone (Senior Analyst)
No, that makes sense, and it's really helpful. If I can maybe quickly squeeze in a quick follow-up. I think, Brian, you mentioned earlier, I think $30 million of NOI coming online from redevelopment this year. Is that a net figure, like adjusting for any NOI that's going to be taken offline for, like, some of the Taubman projects you just discussed? Or, should we model, you know, more NOI coming offline than the thirty? You follow me.
Brian McDade (CFO)
It wasn't a net number, no. It was basically our deliveries at the expected yield. There's some timing elements to it as well.
David Simon (Chairman, CEO and President)
Yeah, most of what we're-
Vince Tibone (Senior Analyst)
Okay.
David Simon (Chairman, CEO and President)
Most of what we're doing, you know, again, is back-end weighted. So that's just a, you know, let's verify that number, but that's just a more back-end weighted and not the full, you know, initial NOI, net initial yield for those properties, those redevelopments. Again, you know, give you examples. Ann Arbor, opening, best case, fourth quarter. Brea, best case, fourth quarter. Mission Viejo, best case, fourth quarter. And I can go down the line, but most of all of that is very, very limited, back-end weighted, Q4 openings.
Vince Tibone (Senior Analyst)
Okay. Thank you.
David Simon (Chairman, CEO and President)
Okay, thank you.
Operator (participant)
The next question comes from the line of Floris van Dijkum with Ladenburg Thalmann. You may proceed with your question.
Floris van Dijkum (Managing Director and Senior Equity Research Analyst)
Hey, thanks, guys. So quarter rise, I guess, is an appropriate term, so I guess that's another, you know, 3 million of shares that you could be buying back. It sounds like, which would obviously be accretive. My question is more on your, as I usually ask, about your S&O pipeline and how that is progressing, and how do you see that trending throughout '2026 and into, you know, as you sign your 17 million of leases? If you can, maybe, Brian, if you can give a little commentary around that, and what percentage of that S&O pipeline is luxury versus your traditional retailers?
Brian McDade (CFO)
Florence and Brian. So at year-end, we were about 2.1% of S&O, which is consistent with the prior several years at 12/31. As you know, we opened the fourth quarter, the vast majority of retailers, and then the momentum builds throughout the balance of the year. So we would expect that number to go up second, third, and fourth quarter.
David Simon (Chairman, CEO and President)
Yeah, I think it's good that that number. You know, the way I would look at it is, it's good that that number's staying almost stable, because that means we're replacing tenants or filling the vacant space, and it's not going down. So, you know, there's positive churn in that, which, you know, which is good.
Floris van Dijkum (Managing Director and Senior Equity Research Analyst)
So let me just make sure I understand. So 210 basis points of S&O is what it was at year-end. What percentage of that is luxury tenants? If you can give a little bit more color on that.
David Simon (Chairman, CEO and President)
Yeah, we, we don't get into that, but, you know, you know, it's not, it's not happening, right? You know, they're, they're very selective, they're very focused, but you know, we're, we don't really, you know, it's not, it's not anywhere near the majority. It's, it's well less than half. But, it's not, it's not the size, it's the quality. So that's how you have to look, you know, at..You could add, you know, Southdale is a great example. Southdale Center, again, is probably 1.4 million sq ft, 1.3 million sq ft. Huge number. It's got all sorts of funky basement and a third-level space. Put all that aside. What transformed Southdale was essentially 70,000 sq ft of high-end leasing. So it's the, it's the quality, not the quantity. So that's what you should focus on.
It's not, you know, oh, they're gonna do 500,000 sq ft of luxury. It's, you know, if you can add 20,000, 30,000, 40,000 in the right markets, it makes a real difference. And that's, that's what you should look out for, not the actual amount of the, of the, of the, you know, S&O.
Floris van Dijkum (Managing Director and Senior Equity Research Analyst)
David, that's very helpful, by the way. Thank you. But are there any more Southdales expected in the pipeline?
David Simon (Chairman, CEO and President)
Yeah. Oh, yeah. Oh, yeah. Eli's gonna announce something tomorrow or the next-
Eli Simon (COO)
Tomorrow.
David Simon (Chairman, CEO and President)
Maybe.
Eli Simon (COO)
Tomorrow.
David Simon (Chairman, CEO and President)
I haven't approved it yet. Yeah, we, we think, we definitely think there's more to do.
Floris van Dijkum (Managing Director and Senior Equity Research Analyst)
Thanks.
David Simon (Chairman, CEO and President)
Thank you.
Operator (participant)
The next question comes from the line of Omotayo Okusanya with Deutsche Bank. You may proceed with your question.
Omotayo Okusanya (Analyst)
Yes. Good evening, everyone. Just curious about deal flow. Again, $2 billion of activity in 2025 was pretty good. Just curious, as you're looking globally, what you're seeing out there and how we should kind of be thinking about that in 2026?
Eli Simon (COO)
Yeah, I mean, listen, we always look, but we have a very high bar, right? The best way to think about it is it has to be something that is brand accretive to our portfolio. It's something that we can add our expertise, whether it's leasing, intensification, you know, property management, just running it better, and it has to be at the right price. And so last year, we were, you know, able to find a few of those transactions that we're very excited about and are off to a good start. And, you know, if there are more of those, great. And if not, you know, we'll continue to reinvest into our existing portfolio, which we're earning great yields, and obviously have a, you know, a big growing shadow pipeline behind that.
David Simon (Chairman, CEO and President)
Yeah, I think, you know, with our new development in South Nashville and all the redevelopment mixed-use pipeline, the bar to buy something for us is, you know, is. you know, you don't have to be an Olympic high jumper, but you gotta have more hops than Ward, okay? So, you know, and why I'm saying this is because we are really excited about our redevelopment pipeline. And it's not a capital question, it's just, you know, it's a, you know, we're long gone. Take, you know, take, you know, and it just pops into my head, but take Boca as an example. You know, we finally, you know, we won the litigation. We were able to buy the building from Seritage.
And that development in itself could be $500 million. And, you know, that's just one example that pops in my head about, you know, we have the same thing in Fashion Valley in San Diego. You know, taking the Penny Building and, you know, creating, you know, mixed use and more retail space. So, you know that, and, and then, you know, we've got the new development in Nashville, which could be $500 million. So, Woodbury, extension of Woodbury, extension of Toronto,
Brian McDade (CFO)
Desert Hills.
David Simon (Chairman, CEO and President)
Desert Hills. So, you know, these, these things, you know, are very exciting to us. And so, you know, we gotta, we gotta be. We have to have similar excitement if we buy something. And that similar excitement has to then be grounded by what Eli said, which is, you know, does it fit with our portfolio? Can we add value? You know, what's, what's, you know, you know, what's the game plan? And I'll take the one that we bought in Brickell. You know, now that we've taken over leasing, we got a lot of great stuff in the works there, in an asset that, you know, 10 years from now will be worth $3 billion-$4 billion.
Brian McDade (CFO)
Gotcha. Thank you.
David Simon (Chairman, CEO and President)
Thank you.
Operator (participant)
The next question comes from the line of Linda Tsai with Jefferies. Please proceed with your question.
Linda Tsai (Senior Equity Research Analyst)
Thanks for taking my question. Just to follow up on the redevelopments. When you engage in them, are you relocating retailers within your existing property, or drawing new retailers into the market, or taking share from other assets in the area?
David Simon (Chairman, CEO and President)
We are bringing most of the time, you always relocate some existing retailers, you know, in the existing building, but most of the time, we're bringing new entrants into the market.
Linda Tsai (Senior Equity Research Analyst)
Thank you. Then just on occupancy, for 2026 versus 2025, how are you thinking about that? Does it vary at all across different formats, premium outlets, malls, mills?
Brian McDade (CFO)
Linda, we, we do expect that there is some upward opportunity in our occupancy for the year across the platforms.
Linda Tsai (Senior Equity Research Analyst)
Thank you.
Operator (participant)
The next question comes from the line of Mike Mueller with J.P. Morgan. Please proceed with your question.
Michael Mueller (Senior Equity Research Analyst)
Yeah, hi. Can you talk a little bit about the institutional appetite for higher productivity malls? For example, are your JV partners looking to invest more with you, or are we more likely to see you buy them out?
David Simon (Chairman, CEO and President)
It's, it's really, you know, we don't have a lot, to be honest. So, and what I've noticed, it's really, it's really partner by partner. So, and a lot of it depends on how long they've held the asset, what's going on, you know, in their, you know, real estate investments, et cetera. It's hard for me to say it's really one way or another. But there's not a, there's not a rush to get out, and I would say there's not a rush to get in. And if I had to make it. If I had to make a simplistic statement, which I'm very confident at, right? Because, you know, simple Simon, right? It's kind of more status quo.
Michael Mueller (Senior Equity Research Analyst)
Got it. Okay. Thank you.
David Simon (Chairman, CEO and President)
Sure. Thank you, Michael.
Operator (participant)
The next question comes from the line of Haendel St. Juste with Mizuho Securities. You may proceed with your question.
Haendel St. Juste (Managing Director and Senior Equity Research Analyst)
Hey, good evening. Thanks for taking my question. I wanted to ask about luxury. I was hoping you could talk a little bit more about what you're seeing and hearing from luxury shoppers, and tenants. The upfront consumer has-
clearly been resilient, but looks like some of the luxury brands, LVMH, in particular, might be signaling a bit more caution for luxury this year. Some of that obviously tied to tariffs, Chinese spending. So I guess I'm curious, what's your view and expectation for leasing demand and sales productivity from that tenant category for this year? Thanks.
David Simon (Chairman, CEO and President)
Sure. I would say, again, it's so dependent upon the company, and then within the company, the brand. There are some that are growing, there are some that are still making deals but a little more cautious, and then there's some that are, you know, slightly pulling back. The good news is that the, you know, what they have all discovered in the, over the last decade or so, is the US is a lot bigger market, you know, than, than they ever thought it could be. So in the long run, they're all very, very much dedicated to being an important player here. Their wholesale business, you know, is obviously affected by what's going on with Saks Global, and that could inure to our benefit, potentially. It might not.
So I think as they look at, you know, their positioning, you know, that, they're certainly going to have an opinion on that. And, you know, we're optimistic that, you know, they'll continue to, you know, do business with Saks/Neiman, and, you know, that will reorg and, you know, live a better life with a better balance sheet. But I'd say generally, it's steady as she goes. You know, some growing, some peeling the onion, and a lot of them, you know, just, you know, stable. And, you know, the great thing about these brands is they make long-term decisions. They really invest in the brand, and they really invest in the stores, and, you know, they don't. They do it over a, you know, almost a little bit like us.
They do it over a little bit longer horizon than quarter to quarter or year to year. We really like being aligned with those kind of, you know, high quality retailers.
Haendel St. Juste (Managing Director and Senior Equity Research Analyst)
Thank you for the color.
David Simon (Chairman, CEO and President)
Sure.
Operator (participant)
The next question comes from the line of Juan Sanabria with BMO Capital Markets. You may proceed with your question.
Juan Sanabria (Equity Research Analyst)
Hi, good afternoon. Just first, a quick follow-up. I think you mentioned that pipeline, the leasing pipeline was up 15% year-over-year. So just curious if that number was benefiting from, and if so, what the kind of apples to apples number is. But then the broader question is just on these anchor boxes, how should we think about the potential capital investments for Saks and Neiman's as those come back to you over time, and kind of what you think, like, the top 5, let's say, most likely uses are for those boxes across the portfolio?
David Simon (Chairman, CEO and President)
Well, yeah, the 15% is like to like, essentially. Because remember, we literally just took over Taubman leasing, you know, two days ago, it feels like, right? So but that's like to like. I mentioned earlier the upside that we see in our TRG. So, you know, we'll see a positive impact from both the tenant mix and the cash flow, you know, over time. And then the other. I don't think we're gonna have that dramatic of an impact, but it's early days here. And then if we get boxes back, you know, we'll do what we've been doing with, you know, dealing with all the Sears vacancies. The boxes we got back from Penny when they filed.
I mean, you know, the one thing we're very capable of is reimagining the real estate in the boxes, and at the end of the day, you know, gives us the opportunity to, you know, to, to redo the real estate. Which is kind of what started with Southdale. Or how big is Southdale, do you know?
Speaker 21
1.3.
David Simon (Chairman, CEO and President)
1.3, right. You know, I only have 200 and how many properties do I have now?
Speaker 21
254.
David Simon (Chairman, CEO and President)
So I only have 254, but somehow I remember Southdale Center, right? Okay. So, Southdale Center is an example. That whole redevelopment was spurred by, believe it or not, Herberger's going out of business. So, and then we got the JCPenney box back, and that's where we put Life Time in. So, you know, there's Life Time deals to do, there's House of Sport deals to do, there's mixed use to do, there's, you know, outdoor additions to do. So it really runs the spectrum. And, you know, and we'll, we'll see where it goes. I mean, we don't know yet, so it's early days. My guess is we'll have a better feel for it when we next speak.
Ronald Kamdem (Analyst)
Thank you.
David Simon (Chairman, CEO and President)
Sure.
Operator (participant)
The next question comes from the line of Rich Hightower with Barclays. You may proceed with your question.
Rich Hightower (Managing Director)
Hi, good evening, guys. Thanks for taking the question. Just a small clarifying question on tax and then a separate question from that, if I may. I think it was reported that Simon's got a $100 million investment in that entity as well, and so just help us understand what happens to that and how that investment might in some way control the outcome to whatever extent. And then my second question is just, you know, updated thoughts, if you have any, on the exchangeable euro debt that comes due later this year and the potentiality of putting Klépierre shares to the debt holders there, what the math looks like there. Thank you.
David Simon (Chairman, CEO and President)
Sure. So let me answer the second first. We have gotten some redemption notices, and we've been issuing shares. Brian, what's the total number?
Brian McDade (CFO)
1.5 million shares.
David Simon (Chairman, CEO and President)
So we've issued 1.5 million shares to satisfy the bond when we hit a put. So, you know, that's what's happened. That's factual. Your first question is, we did a transaction with Saks Global as part of their funding for buying Neiman Marcus. Now, as part of that, we decided we weren't just gonna make that investment unless we got, you know, compensated for it. So in case it blew up, we would be whole. And so we got the right to terminate 2 leases. We got 2 buildings, and very importantly, and I'm sure you're familiar with REAs, but throughout our whole entire portfolio with Saks and Neiman, and Saks OFF 5TH, we got the right to build what we want, so we don't have to go and get their approval.
In addition, we got the right to take that investment and convert it into a company that's being run by Authentic Brands Group, that owns the IP, not e-commerce, not stores, but owns the IP for Saks, Neiman, Bergdorf. So at the end of the day, you know, we felt like we made a good trade. With that said, we've written off our investment at the end of the fourth quarter. So, but again, we got the right to build, which can keep you from doing what you want at REAs for years and years. We've got two buildings. We got the right to terminate two leases if they were in monetary default, which they are, and then the upside is we own the IP. So we're.
In my personal belief, we're ahead of the game, but we went ahead and wrote off our investment.
Rich Hightower (Managing Director)
Very helpful. Thank you.
David Simon (Chairman, CEO and President)
Yeah, good question, and thanks for asking.
Operator (participant)
Our last question comes from Ronald Kamdem with Morgan Stanley. You may proceed with your question.
Ronald Kamdem (Analyst)
Hey, I just had a quick one, putting some of the stuff that came up in the call earlier. Just going back to the domestic property NOI assumptions for this year versus last year. Just talking through for the occupancy, the re-leasing spreads, the bad debt, just putting it all together, how it compared versus last year would be helpful. Thank you.
Brian McDade (CFO)
Ron, it's Brian. I think if you look, you know, we've now said at least 3% domestic NOI for about four years, and it outperformed that. You know, ultimately, it's going to be all of the things that we've talked about on this call that will drive the performance of the domestic, domestic store NOI, above where we, have guided you. Ultimately, it's gonna be the, you know, upside from occupancy, upside from leasing, and a variety of other parts of the business that will contribute, as it has this year and the past several years.
Ronald Kamdem (Analyst)
Great. That's it for me. Thank you.
