Simon Property Group, Inc.

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.

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 this form of the statement. 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 eight-day 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. And please introduce David Simon.

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, 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 operation 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 return 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. We'll discuss our leasing and investment activities, and then Brian will cover our fourth quarter results and our outlook for next year in more detail. Thank you. During 2025, we acquired the Malt, two well-known luxury outlet centers in Italy, our partner's interest in Brickell City Center, 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 Philips Place, a high-productivity open-air retail center in Charlotte, a market we know well with significant upside from re-merchandising 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 square feet during the quarter, and over 4,600 leases for more than 17 million square feet 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 a forum shop at Caesars. and mixed-use additions, including hotel and residential at Northgate Station and Lakeland 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 in 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 Fashion Mall at Keystone and Town Center at Boca Raton, expansions at Toronto, Desert Hills, and Woodbury Common Pre and Outlet 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 totals approximately $1.5 billion, with a blended yield of 9%. Approximately 45% of net costs are for mixed-use projects. Our pipeline of new development and redevelopment opportunities continues to grow and now exceeds $4 billion. I'll now turn it over to Brian, who will walk through our fourth quarter results. 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 26 cents of growth, driven by a higher lease income across the business. As anticipated, lower interest income and higher interest expense combined were a seventh and dragon. Domestic property interline 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 trading 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 square foot per year. The SPG-only portfolio was up 2% year over year. Importantly, total sales volumes were 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-trans U.S. Senior Notes offering that totaled $1.5 billion in a combined average term of 7.8 years and a weighted average coupon rate of 0.77%. It also completed $7 billion of secured loan refinancing and extensions in a year. Subsequent to year end, we completed an $800 million offering of five-year numbers and a spread of 65 basis points for five-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 advantage with more than $9 billion of liquidity at year-end and a net EBITDA measure of 5.0 times. 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 purchased 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 10 cents or 48%. The dividend is payable on March 31st. Turning to our 26th guidance, we expect real estate FFOs of $13 to $13.25 per share with a midpoint of $13 to $13.

The guidance range assumes domestic property and NOI growth of at least 3% and higher net interest expense of $0.25 to $0.30 per share versus 2025, reflecting current market interest rate and indexes.

Thank you. We will now open it up for questions. 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 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 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 start keys. Our first question comes from Caitlin Burrows with Goldman Sachs. You may proceed with your question.

Hi, everyone. Good evening. Maybe on the leasing side, you mentioned that 30% of lease signings last year were on new leases. 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?

Okay, this is Brian. Look, I think what we would say is that, 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 square foot. We would expect that to continue. into 2026. And then just from a 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. Our next question comes from Samir Kunal with Bank of America. You may proceed with your question.

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, you know, as it relates to maybe the impact on traffic or retailer sales. Maybe, Eli, anything would be helpful from that end. Thanks.

Yeah, sure. So it's obviously early days, but we've been very pleased with the adoption from both a customer perspective and also getting brand insight about it. And 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. And so as we go into the 26th of It's more of the same, continue to focus on getting new rewards, new retailers, and also partnering with other loyalty programs that are outside of our space as well, working on launching that at the end of this year. So, again, early days, but we are very pleased with where we are so far.

The next question comes from the line of Michael Griffin with Evercore ISI.

Please proceed with your question.

Great, thanks. Appreciate all the color so far. Just wondering if you can give some insights maybe into your thoughts around tenant credit or 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 better or worse, the same than last year? Anything about that would be helpful. Thank you.

Sure. Yeah, look, I think the terrorists 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, 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. We, retailers dealt with it successfully this year, but it kind of, you know, the full impact will really be 26 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, you know, a small victory for, you know, our clients, but no one really, really knows. I don't know what, you know, Polymarket, where the odds are. Actually, that'd be an interesting, Tom, while we're warbling here, you can find out what Polymarket says about 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 going to take a couple $100,000,000.00 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 the 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's probably put more pressure on retailers than should be. And it's going to 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 have some bankruptcies in there that surfaced at the beginning of, 26 that we felt comfortable enough to keep the range. You know, we do our budgets. We finish basically, you know, mid-December. So that budget was essentially fixed. We didn't back off it because of what Eli mentioned to you, you know, the retail demand. But there'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 answers your question.

Yep. Appreciate it. Thank you.

The next question comes from Michael Goldsmith with UBS. You may present your question.

Good afternoon. Thanks a lot for taking my question. We heard a lot about investment and redevelopment from Eli, so maybe we can frame how much incremental NOI or FFO we should expect this year from projects stabilizing either late in 2025 or in 2026. Thanks. Hi, Michael.

It's Brian. I think you should expect about a $30 million contribution in 2026 from projects that are going to be complete.

Great, thank you very much.

The next question comes from the line of Alexander Goldfarb with Piper Sandler. You may proceed with your question.

Hey, good evening. Good evening out there. David.

Hold on.

25 to 32% in favor of policy survival. Okay.

If it does, it's going to 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 Sachs and Eddie Bauer, but you still feel pretty good. You know, as you look at the business, you guys have, you know, 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 faster, 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 going to be more ripple effects this year as the full year has felt. But at the same token, if, you know, presumably the economy accelerates, you guys have more revenue levers that should come into play and help drive earnings up.

Yeah, listen, I – agree, you know, 1,000% of the 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 that hire rents. And, you know, take, you know, what's going on in SACS as a simple example. We have, you know, a number of office 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 SACS, our fifth, you know, total was paying us around 18 million. You know, we think half the portfolio will pay us 30. And Eli Shagan 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, all fifths in the sets. The productivity and the rest are just so cheap. that, you know, there's a tremendous amount of upside. And, you know, it takes time, right? And most of that will all be back-end weighted because your GOV sales, you know, 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 will show up in 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, the tariffs are, you know, it's never going to 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 U.S. So we're seeing kind of the north border a little weaker than the south border. We also, interestingly, I saw a little bit of sales disruption in certain markets where there are a lot of activity, which was interesting. But again, tariffs are 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 26. And, you know, as an example, Alex, we just opened Chanel in both town center 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. Thank you. Sure.

The next question comes from the line of Craig Mailman, Citi. You may proceed with your question.

Hey, everyone. Just to follow up on the leasing, the pace of leasing has 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 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 vertical would be willing to pay for space in class B? Just kind of curious what the appetite looks like there and the pricing for that.

Yeah, well, we don't, I mean, pricing is just so space market asset driven. There's, you know, hopefully AI will solve it for us so we don't have to that I negotiated will 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 I can't really tell you. I mean, obviously, ASF has, 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? 4,600? No, no, no. 17 million. So, strangely enough, we figured out how to make deals on 17 million square feet. Okay? So, it's more of an art than a science. 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?

I mean, I guess, is it getting easier to lease Class B versus maybe 12 months ago?

Yeah, I think that's a safe statement. And, again, you know, a class – If you looked at Southdale Mall a year or two years ago, you would say this was a, you know, a sea act, okay? And now we've made it an act. 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 an open. For those of you who have been to Odessa and Midland, which, of course, I have been a few times, 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 Shore Hill 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, in Indonesia, right? I mean, very few companies can build in Indonesia and then build a new outlet in Oklahoma, okay?

You know, that's just what we're about. Great. Thank you.

The next question comes from the line of Greg McGinnis with Scotiabank. Please proceed with your question.

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.

Greg, I think the way to think about it is very similar to how, you know, we run our business. We start in 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, I would just, sales, to me could be, you know, significant upside. We, as you probably know, we budget our sales flat-ish. And so if we get 3% growth, you know, I would hope to be our essence. And to me, yeah, a lot of bankruptcies, you know, we'll have, you know, tenants will be delayed. That kind of stuff. But, you know, if we get the kind of sales growth that we hope to get, you know, then we'll do better. And I don't, you know, anticipate doing worse in our range.

Okay. Thank you.

Thanks, Eric. The next question comes from the line of Vince Tabone with Green Street. You may proceed with your question.

Hi, good evening. I got one more on guidance. Can you just discuss the level of domestic property NOI guidance included in 26 FFO? And then also, if you could just help quantify, you know, 25 is a bigger acquisition year than, you know, the recent past. Like, how much did 25 completed acquisitions, you know, benefit or contribute to domestic property or NOI in 26?

We're projecting 3% continent-wide growth.

You know, the deals, you know, Calvin really is a 27 story because of, you know, you'll see an announcement from us tomorrow or the next day on some transformations of three properties that now that we've you know, got our hands on. We also have the integration, which is a 26 story. So it's, you know, we obviously issued the units as well. And we haven't quarterized that, which is our intent. People make fun of that. but that's the legit use of the warrant. 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 sets, but they're all early days. No, that's really helpful. A couple were pretty small, but, you know, all over time will contribute to our growth.

No, that makes sense. It's really helpful. If I can maybe 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 NOIs can be taken offline, like some of the Todman projects you just discussed, or should we model more NOI coming offline than the 30? You follow me.

It wasn't a net number, no. It was basically our deliveries, the expected yield. There's some timing elements to it as well. Most of our work, 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, NIL, NIY, that initial yield for those properties, those redevelopments. Again, you know, giving examples. Ann Arbor opening, best case, fourth quarter. Bragg, best case, fourth quarter. Mission, 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.

Okay, thank you. Okay, thank you.

The next question comes from the line of Floris van Dijkum with Leidenberg. You may proceed with your question.

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 obviously would 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 26 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. What percentage of that S&O pipeline is luxury versus your traditional retailers?

So at year end, we were about 2.1% of S&O, which is consistent with the prior several years in 1231. 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, fourth quarter. Yeah, I think it's good that that number, you know, the way I would look at it is, I think that that number is 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.

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?

Yeah, we don't get into that. But, you know, it's not happening, right? You know, they're very selective. They're very focused. But, you know, we don't really, you know, it's not anywhere near the majority. It's well less than half. But it's not the size. It's the quality. So that's how you have to look, you know, at – you could add – Now, Southvale is a great example. Southvale Center, again, is probably a million four square feet, a million three. Huge number. It's got all sorts of funky basement, third level space. Put all that aside. What transformed Southvale was essentially 70,000 square feet of high-end leasing. So it's the quality, not the quantity. So that's what we should focus on. It's not, you know, oh, they're going to do 500,000 square feet of luxury. It's, you know, if you can add 20, 30, 40,000 in the right markets, it makes a real difference. And that's what you should look out for, not the actual amount of the SNL.

David, that's very helpful, by the way. Thank you. But are there any more south sales expected in the pipeline?

Oh, yeah. Oh, yeah. Eli is going to announce something tomorrow or the next, tomorrow, maybe, tomorrow. I haven't proved it yet.

Yeah, we think, we definitely think there's more to do. Thanks. Thank you.

The next question comes from the line of Omatayo Okusanya with Deutsche Bank. You may proceed with your question.

Hi, yes. Good evening, everyone. Just curious about deal flow. $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 26?

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. 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 big growing shadow pipeline behind that. Yeah, I think, you know, with our new development in South Nashville and all the redevelopment mixed-use pipeline, you know, The bar to buy something for us is, is, you know, is, you know, you don't have to be an Olympic high jumper, but you got to, you got to have more hops than more. Okay. So, you know, and, and, 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 VOCA as an example. You know, we finally, you know, we won the litigation. We were able to buy the building from Sarah Taj. 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 petty building and, you know, creating, you know, mixed-use and more retail space. So, you know, that and then, you know, we've got the new development in Nashville, which could be $500 million. So, Woodberry, extension of Woodberry, extension of Toronto. Desert Hills. These things are very exciting to us. We have to have similar excitement if we buy something. 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, you know, what's the game plan? And I'll take the one that we bought in Brooklyn. You know, now that we've taken over leasing, we got a lot of great stuff in the works there. And an asset that about 10 years from now will be worth $3 to $4 billion.

Gotcha. Thank you.

Thank you. The next question comes from the line of Linda Tsai with Jefferies. Please proceed with your question.

Thanks for taking my question. Just a 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?

We are bringing most of the time. You always relocate some existing retailers in the existing building.

But most of the time we're bringing new entrants into the market. Thank you. And then

Just on occupancy for 26 versus 25, how are you thinking about that, and does it vary at all across different formats, premium outlets, malls, mills?

Linda, we do expect that there is some upward opportunity in our occupancy for the year across the platforms.

Thank you.

The next question comes from the line of Mike Mueller with JP Morgan. Please proceed with your question.

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?

It's really, you know, we don't have a lot, to be honest. So, and what I've noticed, 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 in their real estate investments, et cetera. So, it's hard for me to say It's really one way or another. But 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 a simplistic statement, which I'm very confident in, right, because, you know, simple assignment, right, it's kind of more status quo.

Got it. Okay. Thank you.

Sure. Thank you, Michael. The next question comes from the line of Handel St. Juice with Musilhole Securities. You may proceed with your question.

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 up-run 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. Sure.

I would say, again, it's so dependent upon the company and then within the company. the brand. There's some that are growing. There's some that are still making deals, but a little more cautious. And then there's some that are slightly pulling back. The good news is that what they have all discovered over the last decade or so, as the U.S. is a lot bigger market, you know, than they ever thought it could be. So, in the long run, we'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 SACS 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, they're certainly going to have an opinion on that. And, you know, we're And we're optimistic that, you know, they'll continue to, you know, do business with Sachs slash Neiman and, you know, that will reorg and, you know, live a better life with a better balance sheet. But I think 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. 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. And we really like being aligned with those kind of, you know, high-quality retailers.

Thank you for the color.

Sure. The next question comes from the line of Juan Sanabria with BMO Capital Markets. You may proceed with your question.

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 just the broader question is just on these anchor boxes, How should we think about the potential capital investments for Bax and Neiman's as those come back to you over time and kind of what you think the top five, let's say, most likely uses are for those boxes across the portfolio?

Well, yeah, 15% is like-to-like, essentially. Because remember, we literally just took over Taubman Leasing two days ago. Right? So that's life and life. I mentioned earlier the upside that we see in all fifths. So we'll see a positive impact from both the tenant mix and the cash flow over time. And then the other... I don't think we're going to 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 pending when they piled. 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 redo the real estate, which is kind of what started with Southdale, or how big is Southdale? I'll part two, please. You know, I only have 254. So I only have 254, but somehow I remember Southdale, right? Okay. So Southdale is an example. That whole redevelopment was spurred by, I believe, Herb Kurzberger going out of business. So And then we got the penny box back, and that's where we put Lifetime in. So, you know, there's Lifetime deals to do. There's House of Sports deals to do. There's mixed use to do. There's, you know, outdoor additions to do. So it really runs the spectrum. And... 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 fuel cord when we next do. Thank you. Sure.

The next question comes from the line of Rich Hightower with Barclays. You may proceed with your question.

Good evening, guys. Thanks for taking the question. Just a small clarifying question on stacks and then a separate question from that, if I may. I think it was reported that Simon's got $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 Cleppier shares to the debt holders there, what the math looks like there. Thank you.

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? We'll put 5 million shares. So we've issued 1.5 million shares to satisfy the the bond when we get it put. So, you know, that's what's happened. That's factual. Your first question is, we did a transaction with Sax Global as part of their funding for buying Neiman Marcus. Now, as part of that, we decided we weren't just going to make that investment unless we got compensated for it. So in case it blew up, we would be home. And so we got the right to terminate two leases. We got two buildings. And very importantly, and I'm sure you're familiar with our days, but throughout our whole entire portfolio with Sachs and Neiman and all fifth, we got the right to build what we want so we don't have to go 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've got the right to build, which can keep you from doing what you want with REAs. for years and years. We've got two buildings. We've got the right to terminate two leases if they were 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 win ahead and roll off our investment.

Very helpful. Thank you.

Yeah, good question and thanks for asking. Our last question comes from Ronald Camden with Morgan Stanley. You may proceed with your question.

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 the occupancy, the releasing spread, the bad bet, just putting it all together. I compared versus last year would be helpful. Thank you.

Brian, it's Brian. I think if you look, you know, we've now did at least 3% domestic NOI for about four years and 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 domestic store NOI above where we have guided to. Ultimately, it's going to 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.

Great. That's it for me. Thank you.

Thank you.

All right.

Thank you, everybody. Very good questions. We will talk to you soon. And Brian and Tom always welcome your thoughts and insight. Thank you.

Ladies and gentlemen, thank you for your participation. This concludes today's conference. You may disconnect your lines and have a wonderful day.