Simon Property Posts 96.5% Occupancy as Leasing Pipeline Jumps 30%

By Nathan Brooks

Simon Property, the world's largest retail property owner and operator, reported portfolio occupancy of 96.5 percent for the third quarter of 2026, with its leasing pipeline up 30 percent year-over-year. CEO Eli Simon delivered the results on the evening of November 5, days after a political earthquake and giddy stock market gyrations. You wouldn't have known it from the call.

Simon and CFO Brian McDade stayed, as mall owners historically do, stone walls of calm and self-confidence. The main message: tenant demand for mall space, at least Simon's mall space, is very strong.

Do retailers still want physical stores?

Simon's answer is an unqualified yes. Occupancy edged up to 96.5 percent in the quarter, leaving little potential upside — which the CEO framed as a feature, not a ceiling.

"Our job is to continue to re-merchandise these centres, and that's not a [case of] we get to 100 per cent, and then we stop," Simon said. "Our foot is on the gas always. We don't say 'we only have x number of leases to sign and then we're done.' That's not how we operate."

The pipeline figure comes with a caveat: negotiations are still in progress, so deals aren't completed. It's still a big number for a tenant universe of Simon's size. The pipeline for national retailers that have been in Simon's portfolio for decades is up 40 percent.

Simon argued retailers need stores to succeed in the modern era. "E-commerce is great, but without stores to control your brand presence, to control your distribution, your direct-to-consumer distribution in the physical world, it's hard to be a successful modern brand today," he said.

On negotiating leverage, the CEO was studiously modest, perhaps to a fault: "Tenants are free to come to our centres, go to other centres, go to the street, go to shopping centres, strip centres, stay online, so I would never say we had any negotiating leverage." Maybe he wouldn't say it. With occupancy at 96.5 percent, that doesn't mean it isn't there.

What did rents and sales do?

Base rent per square foot rose 6.1 percent year-over-year to $62.75 in the third quarter. Part of that increase reflects the high-quality Taubman portfolio being blended into the current year but not the prior one.

The same caveat applies to productivity. Sales per square foot for small tenants reached $852 for the trailing 12 months, versus $742 for the 12 months ending September 2025, when Taubman wasn't blended in. Strip out the Taubman effect, and productivity has still risen across Simon's malls.

How is the Saks Off Fifth space faring?

Industry sources report Simon is making excellent progress re-leasing the roughly one million square feet of anchor space vacated by Saks Off Fifth. The retailer's demise has reportedly been a leasing bonanza rather than a problem. Simon previously said he expects the $18 million in annual rent Saks paid to become $44 million once re-leasing is complete. New tenant names haven't been announced.

For mall operators worldwide facing department store obsolescence and mass closures — Australian landlords being the latest to attest — that ease of backfilling anchor space should be encouraging. Department store consolidation isn't finished. Not by far.

What does this change for the revenue picture?

Total third-quarter revenue came to $1.81 billion, up more than 13 percent from the third quarter of 2025. That brought nine-month revenue to $5.36 billion, a year-on-year increase of just under 17.3 percent — roughly a fifth more money through the door than last year.

Leasing income accounted for 93 percent of total revenues, with variable lease income — the portion tied to tenant sales — comprising almost one-fifth of leasing income.

The bottom line tells a less cheerful story. Net after-tax income for stockholders fell 17.7 percent to $498.96 million in the quarter, and 7.3 percent to $1.46 billion year-to-date, as higher finance costs from rising interest rates nibble away at profits. Funds from operations, the non-GAAP REIT metric, declined 4.6 percent to $1.17 billion for the quarter but rose 1.3 percent to $3.73 billion year-to-date.

Simon has opened no new malls in 2026. Capital investment is going instead into upgrades and expansions of existing projects, including densification with residential and other non-retail components. The portfolio at quarter-end comprised 174 US malls and premium outlets, 16 Mills megamalls, and 42 international malls and outlets.

The so-what: with occupancy near its ceiling, a 30 percent larger pipeline, and Saks space converting from $18 million to a projected $44 million in rent, Simon's growth story now rests on rent growth and re-merchandising rather than new doors — interest rates permitting.