Simon sees improving retail conditions, analyst says

The nation's largest mall owner is more confident about the U.S. retail environment, an RBC Capital Markets analyst said
following a series of meetings with top executives at the company.

In a research note published Tuesday, RBC analyst Rich Moore told investors that Simon Property Group Inc. said that retailers
leasing space in its malls have managed to weather the economic downturn and are already eyeing recovery plans for when the
economy improves.

"Management indicated that, in general, retailers appear to have identified the bottom to the current economic environment,"
Moore wrote. "Most have moved to a mode of low-expense growth and are maintaining reasonable levels of inventory to guard
against a further deterioration in the economy. Likewise, most express a higher level of confidence to Simon in pursuing further
store openings or maintaining existing stores."

At the same time, the number of bankruptcies by retailers has "returned to more typical levels," Moore said, adding
that that should help Simon keep bad debt off its books and square footage occupied at its malls.

Still, the trends aren't universal.

Simon said business is faring better at its malls in New England and California. But performance is "generally flat"
in Florida, the Midwest, the South and in Boston.

Simon is based in Indianapolis and owns, or has interest in, nearly 400 properties around the world. The company reported improved quarterly earnings last month due to better
retail conditions.

The company lost out its bid to buy rival General Growth Properties earlier this year, but analysts say Simon is in a strong position to make other deals.

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.