The Outsized Role Simon Property Group May Play In The ‘Retail Reset’

The real estate advisory firm RCLCO just released its mid-year 2020 real estate projections, which includes opinions of hundreds of high-level real estate executives. And to no one’s surprise, they stated that “the retail sector was mostly seen in full decline in June.” Further, they stated that there was a wide variation between the secondary regional malls, which are hurting, and the healthier “fortress malls” and grocery-anchored community/neighborhood centers. They also suggested that the “fortress malls” will be at or close to the bottom, a year from now. For center owners and retail REITs that represents the sucking sound of cash flowing in the wrong direction. That, combined with the near-daily retail chapter 11 filings exemplifies an industry under extreme stress. Obsessive observers (like myself) also probably noticed an inordinate amount of news in recent weeks involving Simon Property Group. Last week, on July 8th, the markets talked about an “implied volatility surge” for Simon Property Group stock options (for which I know almost nothing about). This “surge” I’ve learned, usually suggests a coming event that might trigger a “big move” in the stock price, either up or down. That was on the heals of Monday’s July 6th news-wire blip announcing that SPG was selling $2 billion of senior notes, to “bulk-up” for any number of impending moves. Read more at Forbes.