• Beware of Expensive Real estate.

    To be successful in real estate, you must always and consistently put your clients' best interests first. When you do, your personal needs will be realized beyond your greatest expectations.
  • From Our Real estate to Yours

    Real estate sales was perfect training for the experience to go into public life because you learn to accept rejection, learn to meet new people, learn to work with people and find common ground. That's the way you sell houses... that's also the way you win over constituency.

Will Shoppers Return to Malls? Early Indications From Simon Property Group Say Yes.

Posted by: | Posted on: May 14, 2020


As the US economy reopens one big question remains: Will consumers go back to their previous consumption patterns? While it’s too early to definitively predict, there are some positive signs on the horizon.

Simon Property Group voiced some optimism in its recent quarterly report where it shared some observations regarding consumer patterns as it reopens its shopping centers.

As of May 11, the company has reopened 77 of its US retail properties with plans to reopen roughly half of its US portfolio within the next week, Simon Property Group CEO David Simon said during its earnings call. 

So far, shoppers’ response during mall reopenings have been positive, Simon noted. Sales in the malls have also been better than initially expected, he added.

As the commercial real estate company reopens shopping centers, it is beginning to develop a profile of U.S. consumer behaviors post-coronavirus shutdowns. Generally, the suburban areas outside of major densely populated areas appear to perform better, Simon announced.

Consumers are also drifting toward moderately priced retail as opposed to high-end shopping, he said. However, Simon noted demand for higher-end brands in its outlets have “some really good traction.”

However much shopper activity has occurred overseas, which could be attributed to various circumstances, Simon explained. The difference could be attributed to clear, unified government directives regarding retail reopenings in Europe. Secondly, European sales could also be spurred by a consumer market that faced fewer furloughs in response to COVID-19, he said.

Demand in its Asia-based mall settings has also performed well and in some cases, exceeded last year’s same-store sales, according to Simon. Open tenants in their shopping centers are taking advantage of “pent-up demand” from consumers, he argued.

Not shared during the call was more details concerning Simon’s acquisition of Taubman. The transaction was announced in February where Simon is set to acquire 80% ownership in the commercial real estate company for reportedly an all-cash deal valued at roughly $3.6 billion. We reported the transaction may be a game-changer effort to repurpose larger vacancies into smaller spaces that increases rent and foot traffic in retail settings.

However, Simon did discuss its steps in closing its malls and readjusting corporate spending in response to COVID-19′s health and financial impact. It suspended or eliminated more than $1 billion of capital for redevelopment and new development projects in the US and internationally, Simon noted. Currently, its investment focus is on projects nearing completion while suspended projects will be reevaluated over time, he added.

The company also implemented a hiring freeze of corporate personnel, lowered the senior executive team’s base salaries, reduced salary for highly compensated employees and temporarily reduced the board’s cash retainer fees.



Source link