What Simon Property Group actually does

Simon is the largest owner of shopping malls and premium outlet centers in the United States, and it also has properties in Europe and Asia. It rents space to retailers, restaurants and entertainment venues. It was started in 1960 in Indianapolis.

How the business makes money

Its tenants pay base rent plus a share of their sales at many properties. It invests in keeping its best malls busy, which gives it pricing power while weaker malls elsewhere struggle.

The dividend story

As a REIT, Simon distributes most of its taxable income and pays quarterly. During the pandemic in 2020, when stores were closed, it cut the dividend and then restored it as business returned. High yields in retail REITs reflect real risk.

What to keep an eye on

  • E-commerce. Online shopping reduces store visits.
  • Tenant bankruptcies. Store closures hurt rents.
  • Debt and interest rates. Borrowing costs affect profit.
  • Property quality. The best malls do much better than the rest.

Quick take

Simon owns some of the best retail properties in the country, but its dividend has been tested in downturns.