The list of the 44 malls and 54 strip centers that locally based Simon Property Group Inc. will spin off into a new publicly traded company includes 13 retail properties in Indiana—five of which are in the Indianapolis area.
In addition, a Simon spokesperson confirmed Friday morning that the yet-to-be-named spinoff will be headquartered within Simon's current corporate home base at 225 W. Washington St.
The international retail real estate giant announced Friday that it would create a new real estate investment trust to hold its strip centers and smaller enclosed malls.
Overall, Simon executives are forecasting that the new company and its 98 properties will generate annual net operating income of $400 million. Funds from operations, a key indicator in the real estate investment trust industry, are expected to be 80 cents a share.
The healthy numbers prompted a few analysts during a Friday morning conference call to question why Simon didn’t attempt to sell the properties instead.
“There’s no question in my mind there’s the institutional investor that would covet a portfolio of stability, quality and scale like this,” Simon CEO David Simon said. “But we concluded, 'Let’s give this opportunity to our shareholders rather than to the guys that like to skim off the top.'”
Rich Moore, an analyst for RBC Capital Markets, agreed.
“It would take them forever [to sell the properties],” he said. “This is an effort to do it all at once and focus on the high-productivity mall and outlet centers.”
The 13 malls and strip centers in Indiana include five in the Indianapolis area—the most high-profile being Clay Terrace in Carmel. Simon developed the lifestyle center in 2004 with Lauth Property Group. At 579,200 square feet, it ranks as the area’s 12th-largest shopping center, according to IBJ statistics. It is 98.4-percent occupied.
Also becoming part of the new company: Keystone Shoppes and Washington Plaza in Indianapolis; Village Park Plaza in Carmel; and Greenwood Plus in Greenwood.
Outside the Indianapolis area:
— Northwood Plaza, Fort Wayne
— Markland Plaza, Kokomo
— Markland Mall, Kokomo
— Tippecanoe Plaza, Lafayette
— University Center, Mishawaka
— Muncie Mall, Muncie
— Muncie Town Plaza, Muncie
— New Castle Plaza, New Castle