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Simon Property results improve as store rents climb

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Simon Property Group Inc., the largest U.S. shopping-mall owner, said funds from operations rose 75 percent in the first quarter as retail sales climbed and an expense to pay off debt wasn’t repeated.

Funds from operations, which gauges a property company’s ability to generate cash, increased to $570.6 million, or $1.61 a share, from $325.6 million, or 94 cents, a year earlier, the Indianapolis-based real estate investment trust said Friday.

Analysts projected Simon would have an FFO of $1.54 a share, the average of 17 estimates in a Bloomberg survey. The company raised its FFO per-share forecast for the year to a range of $6.55 to $6.65 from a previous range of $6.45 to $6.60 a share.

Retail sales rose in March for a ninth consecutive month, the Commerce Department said April 13. General Growth Properties Inc., the second-largest U.S. mall owner, said this week that occupancies at its malls increased to 92.4 percent, and tenant sales climbed 7.3 percent, to $457 a square foot.

“Retail sales have been pretty encouraging,” Craig Guttenplan, senior REIT analyst with CreditSights Inc. in London, said before the report. “It’s an overall positive” that means landlords can increase rents, he said.

Simon owns or has stakes in almost 400 properties in North America, Europe and Asia.

Occupancy at Simon’s U.S. malls increased to 92.9 percent from 92.2 percent and its average rent per square foot rose to $39.26 from $38.72, the company said.

The company recorded a $165.6 million loss on debt extinguishment in the first quarter of 2010 related to tender offers on debt.

The results were announced before the open of U.S. exchanges. Simon shares rose $1.49, or 1.3 percent, to $114.95 each Thursday. They have gained about 16 percent this year, compared with a 12-percent increase in the Bloomberg REIT Index.

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  1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

  3. I live on the east side and I have read all your comments. a local paper just did an article on Washington square mall with just as many comments and concerns. I am not sure if they are still around, but there was an east side coalition with good intentions to do good things on the east side. And there is a facebook post that called my eastside indy with many old members of the eastside who voice concerns about the east side of the city. We need to come together and not just complain and moan, but come up with actual concrete solutions, because what Dal said is very very true- the eastside could be a goldmine in the right hands. But if anyone is going damn, and change things, it is us eastside residents

  4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

  5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

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