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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. If I were a developer I would be looking at the Fountain Square and Fletcher Place neighborhoods instead of Broad Ripple. I would avoid the dysfunctional BRVA with all of their headaches. It's like deciding between a Blackberry or an iPhone 5s smartphone. BR is greatly in need of updates. It has become stale and outdated. Whereas Fountain Square, Fletcher Place and Mass Ave have become the "new" Broad Ripples. Every time I see people on the strip in BR on the weekend I want to ask them, "How is it you are not familiar with Fountain Square or Mass Ave? You have choices and you choose BR?" Long vacant storefronts like the old Scholar's Inn Bake House and ZA, both on prominent corners, hurt the village's image. Many business on the strip could use updated facades. Cigarette butt covered sidewalks and graffiti covered walls don't help either. The whole strip just looks like it needs to be power washed. I know there is more to the BRV than the 700-1100 blocks of Broad Ripple Ave, but that is what people see when they think of BR. It will always be a nice place live, but is quickly becoming a not-so-nice place to visit.

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