Simon Property Group, Inc.

a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Tom Ward, Senior Vice President, Investor Relations. Thank you, sir. You may begin.

Thank you, Sherry. Thank you for joining us this evening. Presenting on today's call are David Simon, Chairman, Chief Executive Officer and President, 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 related to the 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 aka 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 would 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.

Good evening, everyone. We delivered robust financial and operational results yet again for the second quarter. Occupancy gains, increased shopper traffic, and higher retail sales volumes contributed to strong cash flow growth. We continue to enhance our retail real estate platforms through development, redevelopment, and acquisitions, including the purchase of our partner's interest in Brickell City Center, a premier mixed-use property in Miami and its rapidly growing Central Business District. Our focus remains on creating long-term value through disciplined investments and operational excellence that drive growth in cash flow, funds from operation, and dividends per share, which yet again we raised. I'm now going to turn it over to Brian, who will cover our second quarter results in more detail. Good evening, and thank you, David. Real estate FFO was $3.05 per share in the second quarter compared to $2.93 in the prior year, 4.1% growth. Domestic and international operations had a very good quarter and contributed 21 cents of growth, driven by a 5% increase in lease income. As anticipated, lower interest income and higher interest expense combined were a seven cent drag year over year. Domestic property NOIs increased 4.2% year over year for the quarter and 3.8% for the first half of the year. Portfolio NOI, which includes our international properties at constant currency, grew 4.7% for the quarter and 4.2% for the first half. We signed approximately 1,000 leases for more than 3.6 million square feet in the quarter, with approximately 30% of our leasing activity for the quarter on new deals. Nearly 90% of our leases expiring through 2025 are complete, ahead of this time last year. The malls and premium outlets ended the second quarter at 96.0% occupancy, up 10 basis points sequentially and 40 basis points year over year. The mills achieved a record 99.3% occupancy, an increase of 90 basis points sequentially and 110 basis points from the prior year. Occupancy remained strong across the portfolio, overcoming retail or bankruptcies of approximately 1.8 million square feet this quarter. Average base minimum rent for the malls and outlets increased 1.3% year over year, and the mills increased 0.6%. Sales for malls and premium outlets per square foot were $736 for the quarter. And occupancy costs at the end of the quarter were 13.1%, flat sequentially from Q1 of 25. Second quarter funds from operation were $1.19 billion, or $3.15 per share, compared to $1.09 billion, or $2.90 per share last year. 8.6% growth. Second quarter results include a $0.21 per share non-cash after-tax gain primarily due to Catalyst Brands' deconsolidation of Forever 21. In addition, better operational performance at Catalyst Brands compared to last year. And lastly, a $0.13 per share non-cash loss from the year unrealized mark-to-market adjustments on our exchangeable bonds due to the outperformance of Clay Pierre's share price, which increased 8% during the second quarter. Now turning to development, at the end of the quarter, development projects were underway across all platforms with our share of net cost of $1 billion and a blended yield of 9%. Approximately 40% of net costs are for mixed-use projects. As David mentioned, we acquired our partner's interest in Brickell City Center. Our $512 million investment includes the retail and parking components and is accretive. We now fully own and manage this highly productive center and look forward to enhancing operations with efficiencies in our leasing and management expertise to drive NOI growth. Turning to the balance sheet and liquidity, during the first half of the year, we completed 21 secured loan transactions totaling approximately $3.8 billion. The weighted average interest rate on these loans was 5.84%, and we ended the quarter with over $9 billion of liquidity. Turning to the dividend, today we announced our dividend of $2.15 per share for the third quarter, a year-over-year increase of $0.10, or 4.9%. The dividend is payable September 30th. Now moving on to guidance. we are increasing our full year 2025 real estate SFO guidance range to $12.45 to $12.65 per share, compared to $12.24 last year. This is an increase of 5 cents at the bottom end of the range and 3 cents at the midpoint. With that, thank you, and David and I are now available for your questions.