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Simon reports slight improvement in quarterly results

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Simon Property Group Inc. reported slightly higher funds from operation for its fiscal third quarter, but FFO fell on a per-share basis thanks to the company's issuance of more than 50 million new shares so far this year.

The Indianapolis-based real estate investment trust on Friday reported $473.1 million, or $1.38 per diluted share, in funds from operations for the period ended Sept. 30, beating consensus analyst expectations of $1.33 per share. That compares to $463.9 million, or $1.61 per share, during the same period in 2008.

FFO is a common measuring stick of performance in the REIT  industry.

Simon sold about 40 million new shares in March and May to raise capital, and also has issued 10 million shares in lieu of dividend payments. The company plans to continue paying 80 percent of its 60-cents-per-share quarterly dividend in new stock, although shareholders may elect to receive all cash or all stock.

"We are encouraged to see continued improvements in the capital markets and from our retailers," CEO David Simon said in a statement.

The company raised the low end of its guidance for 2009 by 5 cents per share, and now expects FFO between $5.40 and $5.50 per share and net income between $1.17 and $1.27 per share. Third-quarter income clocked in at $105.5 million, or 38 cents per diluted share, compared to $112.8 million, or 50 cents per share, in the same period last year.

Simon's overall quarterly revenue fell to $924.9 million, down from $935.6 million.

Occupancy rates at Simon's regional malls and outlet centers fell by 1 percent each, to 91.4 percent and 97.5 percent, respectively. Meanwhile, rent rates rose for both categories, to $40.05 per square foot for regional malls (from $39.26) and $32.95 for outlet centers (from $27.12).

The company said it had more than $4 billion of cash on hand, including $3 billion available on a credit facility.

Shares closed Thursday at $68.17.

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  1. How much you wanna bet, that 70% of the jobs created there (after construction) are minimum wage? And Harvey is correct, the vast majority of residents in this project will drive to their jobs, and to think otherwise, is like Harvey says, a pipe dream. Someone working at a restaurant or retail store will not be able to afford living there. What ever happened to people who wanted to build buildings, paying for it themselves? Not a fan of these tax deals.

  2. Uh, no GeorgeP. The project is supposed to bring on 1,000 jobs and those people along with the people that will be living in the new residential will be driving to their jobs. The walkable stuff is a pipe dream. Besides, walkable is defined as having all daily necessities within 1/2 mile. That's not the case here. Never will be.

  3. Brad is on to something there. The merger of the Formula E and IndyCar Series would give IndyCar access to International markets and Formula E access the Indianapolis 500, not to mention some other events in the USA. Maybe after 2016 but before the new Dallara is rolled out for 2018. This give IndyCar two more seasons to run the DW12 and Formula E to get charged up, pun intended. Then shock the racing world, pun intended, but making the 101st Indianapolis 500 a stellar, groundbreaking event: The first all-electric Indy 500, and use that platform to promote the future of the sport.

  4. No, HarveyF, the exact opposite. Greater density and closeness to retail and everyday necessities reduces traffic. When one has to drive miles for necessities, all those cars are on the roads for many miles. When reasonable density is built, low rise in this case, in the middle of a thriving retail area, one has to drive far less, actually reducing the number of cars on the road.

  5. The Indy Star announced today the appointment of a new Beverage Reporter! So instead of insightful reports on Indy pro sports and Indiana college teams, you now get to read stories about the 432nd new brewery open or some obscure Hoosier winery winning a county fair blue ribbon. Yep, that's the coverage we Star readers crave. Not.

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