Simon Property Group, Inc. (SPG) is showing tremendous earnings power with over $1 billion of free cash flow that the company is using to expand and improve their most productive shopping centers, says Alexander D. Goldfarb, Managing Director and Senior REIT Analyst at Sandler O’Neill + Partners, L.P.
“Simon (SPG), [is] the big mall company; just a tremendous earnings machine, over $1 billion of free cash flow from their operations after dividend and after capex. They’re using that free cash flow to spend $1 billion a year on redevelopment, taking some of their most productive centers like Sawgrass Mills, like Copley, like Woodbury Commons just north of New York City, which they’re expanding and making them even better,” Goldfarb said.
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As the retail sector continues to improve due to the shortage in space, Simon is benefiting from its 30 assets that are earning an exceptional amount per square foot, Goldfarb adds.
“Again, there’s a shortage of retail space, because no one’s really building new. Simon has 30 assets that do over $1,100 a square foot, which is unheard of in retail. It’s just a very powerful platform,” Goldfarb said.
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